Kraig Biocraft Laboratories, Inc. (KBLB) 2025 Annual Report: Key Highlights for Investors

Overview

Kraig Biocraft Laboratories, Inc. (“Kraig”, “KBLB”, or “the Company”) is a biotechnology company focused on the development and commercialization of genetically engineered spider silk and related recombinant fiber technologies. The company leverages its proprietary protein expression platform to create advanced fibers with unique mechanical properties, positioning itself as a leader in bioengineered textiles. The company’s fibers are “green”, derived from nature, and are developed without the use of petrochemicals.

Kraig’s principal executive offices are located at 2723 South State St., Suite 150, Ann Arbor, Michigan, and its shares (Class A Common Stock, no par value) are registered under Section 12(g) of the Exchange Act.

Going Concern Notice

Critical for investors: The independent registered public accounting firm’s report on the December 31, 2025 financial statements includes an explanatory paragraph raising substantial doubt about the Company’s ability to continue as a going concern. This is due to net losses from operations and a net capital deficiency as of December 31, 2025. The financial statements do not include any adjustments that might result from this uncertainty. This is a material risk and could potentially impact share price and future capital raising ability.

Standby Equity Purchase Agreement (SEPA) – Major Funding Development

Potentially Price Sensitive News:

• On January 21, 2025, KBLB entered into a Standby Equity Purchase Agreement (SEPA) with PN, LTD., a Cayman Islands exempt limited company (“the Investor”).
• The SEPA provides the Company the right to sell up to \$10 million of its common stock, subject to certain conditions and limitations, at the Company’s discretion during the term of the SEPA. There is no obligation for the Company to sell shares unless specific notices are submitted by the Investor in certain circumstances.
• The Company must satisfy certain conditions, including having a registration statement registering the resale of the shares under SEPA declared effective by the SEC. Upon satisfaction, the Company may, at its discretion, direct the Investor to purchase a specified number of shares via “Advances”.
• There is no mandatory minimum for any Advance, but it cannot exceed 100% of the average daily traded amount during the five trading days immediately prior to an Advance Notice.
• The Investor is not obligated to purchase if, after an Advance, its beneficial ownership of the Company’s shares would exceed 4.99% of total voting power or outstanding shares. Also, no Advance can exceed registered shares under the current registration statement.
• KBLB paid the Investor a \$25,000 structuring fee and a commitment fee equal to 1.00% of the Commitment Amount, payable in shares. These Commitment Shares are included in the initial Registration Statement.
• The SEPA will automatically terminate upon the earlier of (i) the 36-month anniversary of the Effective Date or (ii) the Investor having made payment of Advances for shares up to \$10 million. The Company can terminate with five trading days’ notice, provided there are no outstanding Advance Notices.
• Net proceeds from SEPA will be used for working capital and general corporate purposes.

This funding facility is a major development for KBLB, as it provides a flexible source of capital which could be used to drive growth, product development, or stabilize operations. However, the use of equity financing may also be dilutive to existing shareholders and should be closely monitored.

Other Key Corporate Information

• Kraig Biocraft Laboratories is a non-accelerated filer and a smaller reporting company, and is not an emerging growth company or a shell company.
• The company is current with all SEC filing requirements and has submitted all required Interactive Data Files.
• As of June 30, 2025, the aggregate market value of voting and non-voting common equity held by non-affiliates was approximately \$88.94 million (based on a \$0.0845 price per share).
• No securities are registered under Section 12(b) of the Exchange Act.

Risks for Investors

• Going concern risk: Substantial doubt about KBLB’s ability to continue as a going concern.
• Dilution risk: Potential dilution from sales of shares under the SEPA.
• Penny stock status: The company may be considered a penny stock issuer at various times, which may affect the applicability of safe harbor provisions for forward-looking statements.

Conclusion & What Shareholders Should Watch

The Standby Equity Purchase Agreement is a significant funding development that provides KBLB with the ability to raise up to \$10 million over three years via the sale of common stock. This could be a catalyst for the share price if the funds are deployed effectively to drive growth or achieve profitability. However, the going concern warning from the auditors is a red flag and signals material risks regarding the company’s financial health.

Shareholders should closely monitor:

• The frequency and pricing of share sales under the SEPA
• Progress toward removing the going concern warning
• Any updates on commercial contracts, partnerships, or sales growth

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review all filings and consult their financial advisors before making any investment decisions. The information herein is based on public filings and may be subject to change.

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