Spider Silk Production

Technologies
When Kraig Labs first launched its research and development efforts to produce spider
silk, very few people believed that those efforts could be successful. Many even doubted
that there would be a market for the product once it was developed. As Kraig Labs has
proven the feasibility of producing spider silk, the industry is beginning to see the
tremendous market potential for the product and competitors have started to enter our
field. That is a natural development in a field like technical textiles where billions of dollars
are at stake.
We accept the entry of these competitors as verification of our own analysis of the market.
As the world leader in this technology, we do feel that others have stood by while we
cleared the land, plowed the field and did the heavy lifting. Nevertheless, when we look at
these competitors we are reminded that imitation is the height of flattery.
As we look at the large investments made by venture capitalists over the last 24 months into
the development of rival spider silk technologies we cannot help but smile. They have
finally discovered what we have known for some time; recombinant spider silk has the
potential to make significant inroads into the multibillion-dollar textile and technical textile
industries, opening up new avenues of human innovation.
We at Kraig Labs have always believed we have had a superior technology and product.
After a little extra research on where we stand in this new, but growing, industry, we have
come away feeling even more confident than before.

Material Performance

Kraig Labs is the only recombinant spider silk producer to publicly provide performance
specifications on our recombinant spider silks strength and elasticity.
Our competitors have yet to publish strength and elasticity data for their products in
development.
Kraig Labs is committed to sharing measureable results with our shareholders and the
public.
Production Techniques and Cost

Kraig Labs Genetically modified silkworms are incredibly efficient, and proficient,
recombinant spider silk producers.
Why silkworms? Silkworms have a proven industrial scale production record, producing
approximately $5 billion worth of normal raw silk per year. Our technology simply
harnesses that production capacity by introducing a genetically engineered silkworm that
produces recombinant spider silk instead of mundane silk. The result is a scalable and
incredibly cost effective process.
Our potential competitors, who have attracted some press and the interest of venture
capital over the last year, are using a very different technology. They are genetically
engineering yeast and bacteria to excrete protein into the soup that they live in. While it

may sound simple, fermentation of recombinant proteins is neither simple, nor in our
opinion, cost effective.
Environmental Impact

While being environmentally conscious is the objective of all producers in this industry, the
fermentation process produces high levels of carbon dioxide. As we all know, CO 2 is a
greenhouse gas and is argued to be the leading cause of global warming. In stark contrast,
Kraig Labs mulberry trees and the silk from silkworms have proven to be effective at
sequestering carbon dioxide and are renewable resources. Mulberry trees are also very low
maintenance, while still providing essential global green-cover and significantly help in
reducing soil erosion in areas.