# Kraig Biocraft Laboratories, Inc.: Form 10-K for the period ended Dec 31, 2025

- Company: [Kraig Biocraft Laboratories, Inc.](/companies/kblb.md) (CIK 1413119)
- Form: 10-K
- Filed: 2026-03-30
- Accepted by EDGAR: Mar 30, 2026, 17:38 ET
- Period: 2025-12-31
- Accession: 0001493152-26-013630
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1413119/000149315226013630/form10-k.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1413119/000149315226013630/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 12 months, 2025-01-01 to 2025-12-31 | $165.8k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 12 months, 2025-01-01 to 2025-12-31 | −$3.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2025-01-01 to 2025-12-31 | $570.7k | us-gaap:InterestExpenseNonoperating |
| Net income | 12 months, 2025-01-01 to 2025-12-31 | −$3.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 12 months, 2025-01-01 to 2025-12-31 | $0.00 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 12 months, 2025-01-01 to 2025-12-31 | $0.00 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 12 months, 2025-01-01 to 2025-12-31 | 1,059,485,670 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 12 months, 2025-01-01 to 2025-12-31 | −$1.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 12 months, 2025-01-01 to 2025-12-31 | $5.4k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-12-31 | $1.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-12-31 | $1.9m | us-gaap:AssetsCurrent |
| Total assets | at 2025-12-31 | $2.6m | us-gaap:Assets |
| Current liabilities | at 2025-12-31 | $10.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-12-31 | $10.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-12-31 | −$8.0m | us-gaap:StockholdersEquity |

## Business

As filed, 28,835 characters.

### Overview

Kraig Biocraft Laboratories, Inc., a Wyoming corporation, is a corporation organized to develop high strength fibers using recombinant DNA technology for commercial applications including technical textiles. We use genetically engineered silkworms that produce spider silk proteins to create our recombinant spider silk. Applications include performance apparel, workwear, filtration, luxury fashion, flexible composites, medical implants, cosmetics and more. We believe that we are the world’s leading company in the research, development, and production of commercially scalable and cost-effective recombinant spider silk fiber. Our primary proprietary fiber technology utilizes natural and engineered variants of spider silk produced in domesticated mulberry silkworms. Our business brings twenty-first century biotechnology to the historical silk industry. We are introducing materials with innovative properties into an established commercial ecosystem of silkworm rearing, silk spinning, weaving, and manufacture of garments and other products.

We are using genetic engineering technologies to develop fibers with greater strength, resiliency, and flexibility for use in our target markets, including the specialty fiber and technical textile industries. We believe that the genetically engineered protein-based fibers we seek to produce have properties that are in some ways superior to the materials currently available in the marketplace. Our technology holds, what we believe to be, the potential for life-saving ballistic resistant materials. Other potential applications for spider silk based recombinant fibers include use as structural material and for any application in which light weight and high strength are required. We believe that fibers made with recombinant protein-based polymers will make significant inroads into the specialty fiber and technical textile markets.

Through our technologies, the introduction of the gene sequence based on those found in native spider silk, results in a germline transformation and is therefore self-perpetuating. Our recombinant spider silk fibers incorporate the silk proteins found in spider silk with native silkworm silk proteins. This combination of native silkworm proteins combined with spider silk protein structures results in new and unique recombinant silk fibers. This technology is in essence a protein expression platform which has other potential applications including diagnostics and pharmaceutical production. Moreover, our technologies are “green” inasmuch as our fibers and textiles are derived from nature and do not use any petrochemicals as an input into the fibers.

The Report of Independent Registered Public Accounting Firm to our financial statements as of December 31, 2025 includes an explanatory paragraph stating that our net loss from operations and net capital deficiency at December 31, 2025 raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

### Corporate Information

Kraig was incorporated in Wyoming in 2006. Our principal executive offices are located at 2723 South State St. Suite 150, Ann Arbor, Michigan 48104. Our website is located at www.kraiglabs.com and we make available, free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8-K, as soon as reasonably practicable after we file such reports with the SEC. Our website and the information contained on our website is not incorporated by reference and is not a part of this Annual Report.

### Recent Developments

In 2024 we made substantial progress in improving robustness of our silk rearing operatoins. We are accelerating our hybridization and breeding program to further increase production robustness and cocoon size.

On January 24, 2024, we signed a memorandum of understand with the Vietnam Sericulture Association (VSA) and the Lam Dong Agro-Forestry Research & Experiment Center (LAREC) to enhance sericulture in Vietnam through the expanded application of the Company’s spider silk silkworm technology.

On January 14, 2025, the Company was granted a new Investment Registration Certificate and an Enterprise Registration Certificate for its production operations in Vietnam. This registration formed a new entity, Prodigy Silk Co. Ltd, which is a wholly owned subsidiary of Kraig Biocraft Laboratories. Prodigy Silk effectively replaces Prodigy Textiles, which operated in a different province.

On April 2, 2024, the Company signed final agreements with the VSA and LAREC.

#### Standby Equity Purchase Agreement

On January 21, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited company (the “Investor”). Capitalized terms used herein, but not otherwise defined, have the meaning ascribed to such terms in the SEPA, a copy of which is filed herewith as Exhibit 10.14.

Pursuant to the SEPA, the Company has the right to sell to the Investor up to $10 million of its shares of common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of the shares of common stock to the Investor under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any shares of common stock to the Investor under the SEPA except in connection with notices that may be submitted by the Investor, in certain circumstances as described below.

Upon the satisfaction of the conditions to the Investor’s purchase obligation set forth in the SEPA, including having a registration statement registering the resale of the shares of common stock issuable under the SEPA declared effective by the SEC, the Company will have the right, but not the obligation, from time to time at its discretion until the SEPA is terminated to direct the Investor to purchase a specified number of shares of common stock (“Advance”) by delivering written notice to the Investor (“Advance Notice”). While there is no mandatory minimum amount for any Advance, it may not exceed an amount equal to 100% of the average of the daily traded amount during the five consecutive trading days immediately preceding an Advance Notice.

In addition to the satisfaction of the conditions, the Investor shall not be obligated to purchase or acquire, and shall not purchase or acquire, any common stock under the SEPA which, when aggregated with all other common stock beneficially owned by the Investor and its affiliates, would result in the beneficial ownership by the Investor and its affiliates (on an aggregated basis) of a number of shares of common stock exceeding 4.99% of the then outstanding voting power or number of common shares. In addition, in no event shall an Advance exceed the number of common shares registered in respect of the transactions contemplated hereby under the registration statement then in effect.

The Company paid the Investor a structuring fee in an amount of $25,000. Additionally, the Company paid a commitment fee in an amount equal to 1.00% of the Commitment Amount (the “Commitment Fee”) consisting of such number of Common Shares that is equal to the Commitment Fee divided by the average of the daily VWAPs of the Common Shares during the 3 Trading Days immediately prior to the Effective Date (the “Commitment Shares”). The Commitment Shares are are included on the initial Registration Statement.

The SEPA will automatically terminate on the earliest to occur of (i) 36-month anniversary of the Effective Date or (ii) the date on which the Investor shall have made payment of Advances pursuant to the SEPA for shares of common stock equal to the Commitment Amount. The Company has the right to terminate the SEPA at no cost or penalty upon five (5) trading days’ prior written notice to the Investor, provided that there are no outstanding Advance Notices for which shares of common stock need to be issued. Neither the Company nor the Investor may assign or transfer their respective rights and obligations under the SEPA, and no provision of the SEPA may be modified or waived other than by an instrument in writing signed by both parties.

The SEPA contains customary representations, warranties, conditions, and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

The net proceeds received by the Company under the SEPA will depend on the frequency and prices at which the Company sells its shares of common stock to the Investor. The Company expects that any proceeds received from such sales to the Investor will be used for working capital and general corporate purposes.

### The Product

Our products exploit the unique characteristics of spider silk and variants thereof. Such fibers possess unique mechanical properties in terms of strength, resilience, and flexibility.

Products our competitors are developing utilize unique characteristics from other living systems including other species of spiders and non-spider species and artificial constructs of the Company’s creation. Such fibers possess unique mechanical properties in terms of strength, resilience, flexibility among others. Through the use of genetic engineering, we believe that we have produced a variety of unique transgenic silkworm strains that produce recombinant spider silk. Our recombinant spider silk fiber incorporates the silk proteins found in spider silk with the native silkworm silk proteins. This combination of native silkworm proteins combined with spider silk protein structures results in a new and unique recombinant silk fiber.

#### Other Products

We are continuing to develop new recombinant silks and other protein-based fibers and materials using our genetic engineering capabilities. The Company leverages the latest in genetic engineering technology to develop new silk and protein technologies that it believes will have significant advantages over our legacy technology which created Dragon Silk and Monster Silk. Chief among these is the potential to produce spider silks with greatly increased purity and performance. Due to the biocompatible and biodegradable properties of silk, we believe that the materials developed using this process will create opportunities for products in the medical industry, including sutures, grafts, and implants.

### Our Technology

Our technology builds upon the unique advantages of the domesticated silkworm. The silkworm is an efficient commercial and industrial producer of protein-based polymers, and forty percent (40%) of the caterpillars’ weight is devoted to the silk glands. The silk glands produce large amounts of an insoluble protein called fibroin, which the silkworm spins into a composite protein thread (silk).

We use our genetic engineering technology to create proprietary recombinant silk polymers. This work began in collaboration with the University of Notre Dame. In October of 2017, with the support of funding from the U.S. Army, we transitioned our research operations out of Notre Dame and into our own research and development headquarters.

Our transgenic silkworms are created by inserting the genes expressing spider silk with either natural or engineered amino acid sequences into the embryos of the silkworm. The spider silk sequence is introduced to the embryo of the silkworm and incorporated into the silkworm genome using state of the art molecular biology approaches. The spider sequence is created on a circular loop of DNA called a plasmid.

Production of this material in commercial quantities holds the potential of a life-saving ballistic resistant material, which is lighter, more flexible, and tougher than steel. However, the Company does not currently have any life-saving ballistic products and could be some time before we are able to produce such a product. Other potential applications for spider silk based recombinant fibers include use as structural material and for any application in which light weight and high strength are required. We believe that fibers made with recombinant protein-based polymers will make significant inroads into the specialty fiber and technical textile markets. Our interactions with manufacturers of high-performance textiles, convince us that there is an eager commercial market for our innovative, sustainable, and differentiated technology and products.

### Manufacturing

Our spider silk technology is designed for plug and play incorporation into the existing silk production model. We manufacture and plan to continue to manufacture our proprietary spider silk fibers using traditional silkworm production practices (sericulture).

The Company, originally through our subsidiary Prodigy Textiles and currently through our subsidiary Prodigy Silk, is engaged in the production of our specialized silkworms to produce recombinant spider silk cocoons. These cocoons are then reeled to our specifications to form the final spider silk threads.

By utilizing existing production methodology in traditional silk regions to produce our high-performance materials, we leverage historical knowledge, available labor, and existing capital infrastructure for production, spinning, and weaving of our spider silk materials. This approach reduces the risk to our manufacturing operations and decreases our need for upfront capital expenditure.

We believe that we will be able to target metric tons of capacity of spider silk fiber per annum from our operations when fully developed. This capacity will allow us to address our anticipated initial demand for applications in the protective, performance, and luxury textile markets.

### The Market

We are focusing our work on the creation of new fibers with unique properties including fibers with potential high performance and technical fiber applications for the performance fiber market. The performance fiber market is currently dominated by two classes of product: aramid fibers, and ultra-high molecular weight polyethylene fibers. These existing products serve the need for materials with high strength, resilience, but are unable to delivery flexibility. Because these synthetic performance fibers are stronger and tougher than steel, they are used in a wide variety of military, industrial, and consumer applications.

The military and police are among the users of performance fibers for its ballistic protection. The materials are also used for industrial applications requiring superior strength and toughness, e.g., critical cables and abrasion/impact resistant components. Performance fibers are also employed in safety equipment, high strength composite materials for the aero-space industry and for ballistic protection by the defense industry.

The global market for technical textiles was estimated at greater than $200 billion in 2024 and projected to reach $272 billion by 20301.

These are industrial materials which have become essential products for both industrial and consumer applications. The market for technical textiles can be defined as consisting of:

- Medical textiles;
- Geotextiles;
- Textiles used in Defense and Military;
- Safe and Protective Clothing;
- Filtration Textiles;
- Textiles used in Transportation;
- Textiles used in Buildings;
- Composites with Textile Structure; and,
- Functional and Sportive Textiles.

We believe that the superior mechanical characteristics of the next generation of protein-based polymers (in other words, genetically engineered silk fibers), will open up new applications for the technology. The materials which we are working to produce are tougher and stronger than steel.

We are actively pursuing relationships within target end markets to secure product collaborations with key market channel leaders. Due to the unique nature of our product, we received numerous unsolicited requests from leading businesses across a range of attractive end markets requesting materials for applications development. This substantial interest in spider silk materials across the broad spectrum of applications for high performance fibers and textiles, combined with the limited initial production capacity, has, we believe, provided the opportunity to be selective in choosing market channel partners best able to bring our product to market at scale. We are working under non-disclosure agreements to secure these collaborative development agreements and to establish limited channel exclusivity for firms we believe mirror our culture of innovation.

1https://www.grandviewresearch.com/industry-analysis/technical-textiles-market#:~:text=Report%20Overview,4.5%25%20from%202020%20to%202027

### Research and Development

During the fiscal years ended December 31, 2025 and 2024, we have spent approximately 13,769 and 22,206 hours, respectively, on research and development activities, which consisted primarily of laboratory research on genetic engineering by our in-house research operations. R&D was streamlined and refocused in 2025 resulting in a significant increase in throughput and efficacy.

We have initiated production of our recombinant materials. Additionally, we are accelerating both our microbiology and selective breeding programs.

Our R&D is focused on creating new materials through molecular biology and genetic engineering. One of the main focuses of our work is utilizing the domestic silkworm to create brand-new fibers and materials. We are advancing this work very quickly, creating many new transgenics in the fourth quarter of 2025 and accelerating that work into 2026. We believe these new transgenics could have potentially significant impacts on the apparel and technical textiles markets.

A key aspect of our research program is designed to increase the robustness of our silkworms within the production environment. Working with our contractors we have identified robustness and acclimation of our silkworm lines to the local climate as one of our most significant challenges. In 2025 we made substantial progress in improving robustness. We are accelerating our hybridization and breeding program to further increase production robustness and cocoon size.

### Our Intellectual Property Approach

Our intellectual property strategy utilizes a blended approach of licensed technologies and in-house developments. As part of our intellectual property portfolio, we have licensed the exclusive right to use certain patented gene-splicing technologies for use in silkworm.

Under our collaboration agreement with the University of Notre Dame, we exercised our right to exclusive commercial use for spider silk technologies developed under that agreement. We are applying this proprietary genetic engineering technology to domesticated silkworms, which we believe is the best path to economical, commercial scale production of spider silk.

To expand on this work, in 2017, we opened a research and development facility. Since opening this new facility, we have expanded our intellectual property portfolio with multiple additional provisional and utility patent filings based on new discoveries and inventions. We will continue to utilize our in-house research capabilities to expand and strengthen its patent portfolio while also maintaining and growing our trade secrets relating to genetic advancement and spider silk. We are actively working to develop new approaches to the development of genetically engineering silkworms, underlying construction techniques, and fundamental genetic sequences for improved material performance.

### License Agreements/Intellectual Property

We have obtained certain rights to use a number of university created, and patented gene splicing and spider silk protein technologies.

As part of the joint development program with the University of Notre Dame and the Notre Dame Agreements, Kraig Labs negotiated an option for exclusive global commercial rights to technologies jointly developed with Notre Dame. Kraig Labs has exercised that option. As of the date of this filing, nine patents relating to the jointly developed technologies have been issued, including, Vietnam, South Korea, Australia, Canada, France, and Germany. These jurisdictions are a mix of silk producing and consuming countries. We believe protecting our technologies in these countries will be beneficial to our future operations.

In addition to the patents related to licensed technologies from Notre Dame listed above, Kraig Labs has filed a number of patent applications and provisional applications based on technologies developed solely within the Company’s own laboratories. Kraig has filed two such patent applications and four provisional patent applications based on technologies developed and discoveries from our own independent research operations.

Table of Patent Applications and Status

| Title Chimeric Spider Silk Polypeptides and Fibers Uses Thereof Transgenic Silkworms Capable of Producing Chimeric Spider Silk Polypeptides and Fibers | Country United States of America United States of America | Application No. 14/754916 14/754946 | Filing Date 30-Jun-2015 30-Jun-2015 | Patent No. | Patent Date | Status Under Exam Under Exam |
| --- | --- | ---: | --- | ---: | --- | --- |
| A Nucleic Acid Encoding a Chimeric Spider Silk Polypeptide, Chimeric Spider Silk Polypeptide, Composite Fiber Comprising the Chimeric Spider Silk Polypeptide and Method of Preparing a Transgenic Silkworm | Vietnam | 1-2013-01306 | 25-Apr-2013 | 26612 | 03-Nov-2020 | Granted |
| Method of Preparing a Transgenic Silkworm, Transgenic Silkworm, Manufacturing Method for the Production of Chimeric Spider Silk Composite Fiber and Genetic Construct | Vietnam | 1-2020-05354 | 17-Sep-2020 | 55836 | 20-Jan-2026 | Granted |
| Chimeric Spider Silk and Uses thereof | Australia | 2011314072 | 26-Apr-2013 | 2011314072 | 13-Jul-2017 | Granted |
| Chimeric Spider Silk and Uses thereof | Canada | 2812791 | 28-Sep-2011 | 2812791 | 14-Jul-2020 | Granted |
| Chimeric Spider Silk and Uses thereof | China (People’s Republic) | 201180057127.1 | 28-May-2013 |  |  | Pending |
| Chimeric Spider Silk and Uses thereof | European Patent Convention | 11833071.1 | 26-Apr-2013 | 2621957 | 02-Jun-2021 | EP Granted |
| Chimeric Spider Silk and Uses thereof | Germany | 11833071.1 | 26-Apr-2013 | 602011071095.8 | 02-Jun-2021 | Granted |
| Chimeric Spider Silk and Uses thereof | France | 11833071.1 | 26-Apr-2013 | 2621957 | 02-Jun-2021 | Granted |
| Chimeric Spider Silk and Uses thereof | Korea, Republic of | 10-2017-7005086 | 22-Feb-2017 | 10-1926286 | 30-Nov-2018 | Granted |
| Chimeric Spider Silk and Uses thereof | Korea, Republic of | 10-2018-7034773 | 30-Nov-2018 | 10-2063002 | 30-Dec-2019 | Granted |

\* The terms in this column have the following meanings:

Published: Pending patent applications that have been published by a corresponding state Patent Office (e.g., the U.S. Patent and Trademark Office) or international patent authority (e.g., the World Intellectual Property Association).

Pending: Patent applications that have been submitted to a corresponding state Patent Office for examination but that have not been issued or abandoned.

Under Exam: Pending patent applications currently being examined by a corresponding state Patent Office.

Granted: Patent applications that have been allowed by a corresponding state Patent Office and that have passed through the registration process; a granted patent application is synonymous with a “patent” and is conferred the associated patent rights for the given jurisdiction.

In addition to patent protection for intellectual property developed by the Company and through its collaborative research agreements, the Company has developed specialized skills and knowledge in the field of selective breeding, performance selection, and husbandry. This information is considered to be trade secrets and will play a critical role in the development of unique strains of new transgenics with diverse mechanical properties. These operations and knowledge held as trade secrets provide an additional layer of security and protection for the products and technologies we seek to develop.

In 2014, the following six trademarks were issued to the Company; the Company shall use these trademarks for product branding in the future:

### Marks

Monster Silk®

Spiderpillar®

Spilk®

Monster Worm®

Spider Worm®

Spider Moth®

Dragon SilkTM

In 2021, through its Singapore based joint venture the following four trademarks were issued.

### Governmental Regulations

We are subject to U.S. federal, state, and local laws and regulations, as well as Vietnam central, provincial, and district laws and regulations. These laws and regulations govern, among other things, labor relations, the labeling and safety of our products, the environment, distribution of products, the production of products, and our molecular biology-based technologies. We believe that we are in material compliance with all such applicable laws and regulations, although no assurance can be provided that this will remain true in the future or that interpretation of laws and regulations will remain a constant. Laws and particularly their interpretations and enforcement can and do change. Social and political trends shift in ways that we cannot predict, and which could become less favorable to our technolog With regards to areas where law is vague, lacking, or could be subject to interpretation we endeavor to conform to industry norms.

### Environment

Kraig Labs is fully committed to its vision of bringing spider silk technologies to commercial markets while maintaining the highest levels of environmental responsibility. We believe our technology, built on a renewable resource, has a positive environmental impact, and offers significant benefits over competing synthetic textiles. Our production system is derived from nature and does not use any petrochemicals as an input into our fibers.

We seek to comply with and exceed all applicable statutory and administrative requirements concerning environmental quality. Expenditures for compliance with federal state and local environmental laws have not had, and are not expected to have, a material effect on our capital expenditures, results of operations or competitive position.

While being environmentally conscious is the objective of all producers in this industry, the fermentation process used by our competitors produces high levels of carbon dioxide. CO2 is a greenhouse gas and is argued to be a 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 also provide essential global green-cover and significantly help in reducing soil erosion in areas.

### Competition

We compete directly with numerous other companies with similar product lines and/or distribution that have extensive capital, resources, market share, and brand recognition.

There are presently three primary competitors that we face in the fledgling spider silk industry, but there are few barriers to entry in our industry. This creates the strong possibility of new competitors emerging, and of others succeeding in developing the same or similar fibers for application that we are trying to develop. The effects of this increased competition may be materially adverse to us and our stockholders. As this is an emergent industry there is no one producer that has captured a significant portion of the market. Bolt Threads, Inc. based in California and Spiber Inc. based in Japan are competitors which have raised the largest amounts of investment capital to date. We also compete with AMSilk, which is based in Germany. We believe that our technology offers more cost-effective methods with lower environmental impact than technologies used by our identified competitors, however, new technologies could be developed that remove this advantage.

These competitors have raised and spent 100’s of millions of dollars in pursuit of spider silk production.

### Employees

The Company currently employs between 10-14 people at its U.S. facilities, 7 full-time and up to 7 part-time, including Kim Thompson, our officer and sole director and Jonathan R. Rice, our Chief Operating Officer. The Company employs between 8-30 full time personnel at its Vietnamese subsidiary depending on the production cycle. We plan to hire more persons on as-needed basis.

## Risk factors

As filed, 174 characters.

As the Company is a smaller reporting company, this item is not applicable; however, we encourage you to review the risk factors included in our other publicly filed reports.

## Cybersecurity

As filed, 2,107 characters.

### Risk Management and Strategy

Although we implement systems and controls designed to prevent cybersecurity threats from occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become increasingly sophisticated. Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely. As we outsource more of our information systems to vendors, engage in more electronic transactions with service providers, and rely more on cloud-based information systems, the related security risks will increase, and we will need to expend additional resources to protect our technology and information systems. In addition, there can be no assurance that our internal information technology systems or those of our third-party contractors, or our consultants’ efforts to implement adequate security and control measures, will be sufficient to protect us against breakdowns, service disruption, data deterioration or loss in the event of a system malfunction, or prevent data from being stolen or corrupted in the event of a cyberattack, security breach, industrial espionage attacks or insider threat attacks which could result in financial, legal, business or reputational harm.

As of the date of this Annual Report, we are not aware of any risks from specific cybersecurity threats that have materially affected or are reasonably likely to materially affect us, our business strategy, results of operations, or financial condition.

### Governance

Our senior management team conducts the regular assessment and management of material risks from cybersecurity threats, including review with our third-party service providers, while our board of directors has responsibility for the oversight of risk management. All employees and consultants are directed to report to our senior management any irregular or suspicious activity that could indicate a cybersecurity threat or incident.

## Properties

As filed, 2,531 characters.

Our principal executive office is located at 2723 South State St., Suite 150, Ann Arbor, Michigan. We pay an annual rent of $3,048 for conference facilities, mail, fax, and reception services located at this location.

On September 5, 2019, we signed a two-year lease for a 5,000 square foot property in Lansing, MI that commenced on October 1, 2019, and ends on September 30, 2021, for its research and development headquarters. Pursuant to the lease, it was an annual rent of $42,000 for year one of the lease and $44,800 for year two of the lease. On April 16, 2021, we signed a two-year amendment to this lease, pursuant to which, commencing on July 1, 2021, and ending on September 30, 2022, we pay an annualized rent of $42,000 and from October 1, 2022, through September 30, 2023, we will pay an annual rent of $44,800. On October 1, 2023, the Company extended the terms of the lease through September 30, 2025. From October 1, 2023, through September 30, 2024, the Company will pay an annual rent of $44,800. From October 1, 2024, through September 30, 2025, the Company will pay an annual rent of $47,600. On October 1, 2025, the Company extended the terms of the lease through September 30, 2028.

We pay annual rent as follows:

| Lease Term |  | Annual Rent |
| --- | --- | ---: |
| 10/01/2025 | 09/30/2026 | $50,008 |
| 10/1/2026 | 09/30/2027 | $52,808 |
| 10/01/2027 | 09/30/2028 | $55,608 |

On July 1, 2021, the Company signed a 5-year property lease in the Socialist Republic of Vietnam which consists of 30,000 square meters of property and 6,000 square meter of buildings, which it leases at a rate of approximately $8,645 per year for each of the five years. In 2025 the Company ended this lease.

On January 31, 2024, the Company signed a five-year lease for a 700 square meter facility in Lam Dong, Vietnam that commenced on February 1, 2024, and ends on January 31, 2029. We were scheduled to pay an annual rent of approximately $7,284 for year one and two of the lease. During the third quarter of 2024, the Company terminated its ROU lease arrangement. The Company does not occupy or use the facility and therefore has determined to impair this asset as there is no future benefit.

On September 20, 2024, the Company signed a six-year lease for an 80 square meter facility in Lam Dong, Vietnam that commenced on September 20, 2024, and ends on December 31, 2030. We pay an annual rent of approximately $7,200 for year one and two of the lease, $7,920 for year three, and $8,712 for years four through six.

## Legal proceedings

As filed, 347 characters.

We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.

To the knowledge of our management, we are currently not a party to any material legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us.

## Management's discussion and analysis

As filed, 31,608 characters.

### Caution Regarding Forward-Looking Information

*The following discussion and analysis of our financial condition and result of operations should be read in conjunction with our audited consolidated financial statements and the notes to those financial statements appearing elsewhere in this Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties contained in this report and the other reports we file with the Securities and Exchange Commission. Our actual results may differ materially from those contained in any forward-looking statements.*

The following section reflects management’s views on the financial condition as of December 31, 2025, and 2024, and the results of operations and cash flows for the fiscal years ended December 31, 2025 and 2024. This section is provided as a supplement to, and should be read in conjunction with, the Company’s audited consolidated financial statements and related notes to the consolidated financial statements contained elsewhere in this report.

### Overview

Kraig Biocraft Laboratories, Inc., a Wyoming corporation, is a corporation organized to develop high strength fibers using recombinant DNA technology for commercial applications including technical textiles. We use genetically engineered silkworms that produce spider silk proteins to create our recombinant spider silk. Applications include performance apparel, workwear, filtration, luxury fashion, flexible composites, medical implants, cosmetics and more. We believe that we are a world leader in the research, development, and production of commercially scalable and cost-effective spider silk fiber. Our primary proprietary fiber technology utilizes natural and engineered variants of spider silk produced in domesticated mulberry silkworms. Our business brings twenty-first century biotechnology to the historical silk industry. We are introducing materials with innovative properties into an established commercial ecosystem of silkworm rearing, silk spinning, weaving, and manufacture of garments and other products.

We are using genetic engineering technologies to develop fibers with greater strength, resiliency, and flexibility for use in our target markets, including the specialty fiber and technical textile industries. We believe that the genetically engineered protein-based fibers we seek to produce have properties that are in some ways superior to the materials currently available in the marketplace. Production of our product in commercial quantities holds what we believe to be potential life-saving ballistic resistant material, which we believe is lighter, thinner, more flexible, and tougher than steel. Other potential applications for spider silk based recombinant fibers include use as structural material and for any application in which light weight and high strength are required. We believe that fibers made with recombinant protein-based polymers will make significant inroads into the specialty fiber and technical textile markets.

Through our technologies, the introduction of the gene sequence based on those found in native spider silk, results in a germline transformation and is therefore self-perpetuating. Our recombinant spider silk fibers incorporate the silk proteins found in spider silk with native silkworm silk proteins. This combination of native silkworm proteins combined with spider silk protein structures results in new and unique recombinant silk fibers. This technology is in essence a protein expression platform which has other potential applications including diagnostics and pharmaceutical production. Moreover, our technologies are “green” inasmuch as our fibers and textiles are derived from nature and do not use any petrochemicals as an input into the fibers.

The Report of Independent Registered Public Accounting Firm to our financial statements as of December 31, 2024, and as of December 31, 2025, include an explanatory paragraph stating that our net loss from operations and net capital deficiency at December 31, 2025, raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

### Plan of Operations

During the next twelve months, we expect to take the following steps in connection with the further development of our business and the implementation of our plan of operations:

- We plan to accelerate and expand commercial scale production of our recombinant spider silk.
- We plan to expand our research and development to accelerate our work in creating next generation materials and to improve the robustness of our recombinant spider silk lines.
- We plan to create a line of recombinant spider silk fashion wear either under our own brand name or in partnership with existing commercial entities.
- We plan to continue the expansion of our overseas production operations, including working with local contractors or cooperatives and the hiring of additional direct staff, as needed.
- We plan to accelerate our microbiology research and development to create more advanced materials. We plan to develop more advanced spider silk and non-spider silk-based fibers for select target markets.
- We will consider buying an established revenue producing company in a compatible business, in order to broaden our financial base and facilitate the commercialization of our products; as of the date hereof, we have not had any formal discussion or entered into any definitive agreements regarding any such purchase.
- We plan to increase the breadth of our research to include protein expression platform technologies.
- We plan to actively pursue collaborative research and product testing opportunities with companies in the biotechnology, materials, textile, and other industries.
- We plan to actively pursue additional collaborative commercialization, marketing, and manufacturing opportunities with companies in the textile and material sectors for the fibers we developed and for any new polymers that we create in 2026 and going forward.
- We plan to actively pursue an uplist to a national exchange if such an opportunity presents itself.

### Limited Operating History

We have not previously demonstrated that we will be able to expand our business through an increased investment in our research and development efforts. We cannot guarantee that the research and development efforts described in this filing will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources, risks inherent in the research and development process, risks inherent in working with living organisms, political and legal risks associated with transgenics, and possible rejection of our products in development.

If financing is not available on satisfactory terms, we may be unable to continue our research and development and other operations. Equity financing will result in dilution to existing stockholders.

### Standby Equity Purchase Agreement

On January 21, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited company (the “Investor”). Capitalized terms used herein, but not otherwise defined, have the meaning ascribed to such terms in the SEPA, a copy of which is filed herewith as Exhibit 10.14.

Pursuant to the SEPA, the Company has the right to sell to the Investor up to $10 million of its shares of common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. Sales of the shares of common stock to the Investor under the SEPA, and the timing of any such sales, are at the Company’s option, and the Company is under no obligation to sell any shares of common stock to the Investor under the SEPA except in connection with notices that may be submitted by the Investor, in certain circumstances as described below.

Upon the satisfaction of the conditions to the Investor’s purchase obligation set forth in the SEPA, including having a registration statement registering the resale of the shares of common stock issuable under the SEPA declared effective by the SEC, the Company will have the right, but not the obligation, from time to time at its discretion until the SEPA is terminated to direct the Investor to purchase a specified number of shares of common stock (“Advance”) by delivering written notice to the Investor (“Advance Notice”). While there is no mandatory minimum amount for any Advance, it may not exceed an amount equal to 100% of the average of the daily traded amount during the five consecutive trading days immediately preceding an Advance Notice.

In addition to the satisfaction of the conditions, the Investor shall not be obligated to purchase or acquire, and shall not purchase or acquire, any common stock under the SEPA which, when aggregated with all other common stock beneficially owned by the Investor and its affiliates, would result in the beneficial ownership by the Investor and its affiliates (on an aggregated basis) of a number of shares of common stock exceeding 4.99% of the then outstanding voting power or number of common shares. In addition, in no event shall an Advance exceed the number of common shares registered in respect of the transactions contemplated hereby under the registration statement then in effect.

The Company shall pay the Investor a structuring fee in an amount of $25,000, of which $10,000 has been paid, and $15,000 shall be paid on the earlier of (a) the Closing of the first Advance, or (b) the termination of the SEPA. The Company paid the remaining balance of $15,000 structuring fee on January 21, 2025. Additionally, within three days of signing the SEPA (the “Effective Date”), the Company shall pay a commitment fee in an amount equal to 1.00% of the Commitment Amount (the “Commitment Fee”) consisting of such number of Common Shares that is equal to the Commitment Fee divided by the average of the daily VWAPs of the Common Shares during the 3 Trading Days immediately prior to the Effective Date (the “Commitment Shares”). The Commitment Shares issuable hereunder shall be included on the initial Registration Statement.

The SEPA will automatically terminate on the earliest to occur of (i) 36-month anniversary of the Effective Date or (ii) the date on which the Investor shall have made payment of Advances pursuant to the SEPA for shares of common stock equal to the Commitment Amount. The Company has the right to terminate the SEPA at no cost or penalty upon five (5) trading days’ prior written notice to the Investor, provided that there are no outstanding Advance Notices for which shares of common stock need to be issued. Neither the Company nor the Investor may assign or transfer their respective rights and obligations under the SEPA, and no provision of the SEPA may be modified or waived other than by an instrument in writing signed by both parties.

The SEPA contains customary representations, warranties, conditions, and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

The net proceeds received by the Company under the SEPA will depend on the frequency and prices at which the Company sells its shares of common stock to the Investor. The Company expects that any proceeds received from such sales to the Investor will be used for working capital and general corporate purposes.

### Results of Operations for the Years ended December 31, 2024, and 2025

Our revenue, operating expenses, and net loss from operations for the years ended December 31, 2025, as compared to the year ended December 31, 2024, were as follows – some balances on the prior period’s combined financial statements have been reclassified to conform to the current period presentation:

|  | Years Ended December 31, 2025 | 2024 | Change | % Change Increase (Decrease) |
| --- | ---: | ---: | ---: | ---: |
| NET REVENUES | $- | $- | - | - |
| COSTS OF REVENUES | - | - | - |  |
| **Gross Profit** | - | - | - |  |
| OPERATING EXPENSES: |  |  |  |  |
| General and Administrative | 1,958,768 | 1,747,585 | 211,183 | 12.08% |
| Professional Fees | 379,218 | 290,313 | 88,905 | 30.62% |
| Officer’s Salary | 871,049 | 872,289 | (1,240) | -0.14% |
| Research and Development | 165,758 | 164,374 | 1,384 | 0.84% |
| **Total operating expenses** | 3,374,793 | 3,074,561 | 300,232 | 9.77% |
| **Loss from operations** | (3,374,793) | (3,074,561) | (300,232) | 9.77% |
| Interest expense | (570,709) | (529,603) | (41,106) | 7.76% |
| Net change in unrealized appreciation on investment in gold bullion | 110,198 | 133,829 | (23,631) | -17.66% |
| Gain on sale of gold | 200,433 | - | 200,433 | 100.00% |
| Interest income | 11,518 | 71,396 | (59,878) | -83.87% |
| **Net Loss** | $(3,623,353) | $(3,398,939) | (224,414) | 6.60% |

18

Net Revenues: During the year ended December 31, 2025, we realized $0 of revenues from our business. During the year ended December 31, 2024, we realized $0 of revenues from our business. Accordingly, there was no change in revenues between the years ended December 31, 2025 and 2024.

Research and development expenses: During the year ended December 31, 2025, we incurred $165,758 of research and development expenses, an increase of $164,374 or 0.84% compared with the same period in 2024. The increase was due to the timing of research related activity and costs by insources the Company’s research operations.

Professional Fees: During year ended December 31, 2025, we incurred $379,218 professional expenses, which increased by $88,905 or 30.62% from $290,313 for year ended December 31, 2024. The increase in professional fees expense was attributable to increased expenses related to investor relations and legal services during year ended December 31, 2025.

Officers Salary: During year ended December 31, 2025, officers’ salary expenses decreased to $871,049 or 0.14% compared to $872,289 for year ended December 31, 2024. The decrease is due an increase in officer’s to contractual terms of employment with a slight offset in COO and Directors salary. In order to conserve Company resources, the CEO agreed to accrue and not collect a majority of his salary for 2025.

General and Administrative Expense: General and administrative expenses increased by $211,183 or 12.08% to $1,958,768 for year ended December 31, 2025, from $1,747,585 for year ended December 31, 2024. Our general and administrative expenses for year ended December 31, 2025, consisted of other general and administrative expenses (which includes expenses such as Auto, Business Development, SEC Filing, Investor Relations, General Office, warrant Compensation) of $1,436,418, Travel of $55,339, office salary of $422,033, and consulting of $44,978 for a total of $1,958,768. Our general and administrative expenses for year ended December 31, 2024 consisted of other general and administrative expenses (which includes expenses such as Auto, Business Development, SEC Filing, Investor Relations, General Office, warrant Compensation) of $1,052,808, Travel of $65,631, office salary of $467,931, and consulting of $161,215 for a total of $1,747,585.

Interest Expense: Interest expense increased to $570,709, or 7.76% for the year ended December 31, 2025, compared to $529,603 for the year ended December 31, 2024. The increase was primarily due to interest on the related party loans and accounts payable and accrued expenses to the related parties.

Net Change in Unrealized Depreciation on Investment in Gold Bullion: Net change in unrealized appreciation on investment in gold bullion decreased by $23,631 to $110,198 for the year ended December 31, 2025, from $133,829 for the year ended December 31, 2024. The decrease was primarily due to a net change in unrealized depreciation on investment in gold bullion.

Net Loss: Net loss increased by $224,414, or 6.60%, to a net loss of $3,623,353 for the year ended December 31, 2025, from a net loss of $3,398,939 for the year ended December 31, 2024. This increase in net loss was driven primarily by an increase in warrant compensation, professional fees, research and development and slightly offset by a decrease in officer’s salary expense.

### Capital Resources and Liquidity

Our financial statements have been presented on the basis that we have a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As presented in the financial statements, we incurred a net loss of $3,623,353 during the year ended December 31, 2025, and losses are expected to continue in the near term. The accumulated deficit is $56,709,072 at December 31, 2025. Refer to Note 2 for our discussion of stockholder deficit. We have been funding our operations through private loans and the sale of common stock in private placement transactions. Refer to Note 6 and Note 7 in the financial statements for our discussion of notes payable and shares issued, respectively. Our cash resources are insufficient to meet our planned business objectives without additional financing. These and other factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of our company to continue as a going concern.

Management anticipates that significant additional expenditures will be necessary to develop and expand our business before significant positive operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. At December 31, 2025, we had $1,790,236 of cash and cash equivalents on hand. These funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing.

Management has undertaken steps as part of a plan to improve operations with the goal of sustaining our operations for the next twelve months and beyond. These steps include (a) raising additional capital and/or obtaining financing; (b) controlling overhead and expenses; and (c) executing material sales or research contracts. There can be no assurance that the Company can successfully accomplish these steps and it is uncertain that the Company will achieve a profitable level of operations and obtain additional financing. There can be no assurance that any additional financing will be available to the Company on satisfactory terms and conditions, if at all. As of the date of this Report, we have not entered into any formal agreements regarding the above.

In the event the Company is unable to continue as a going concern, the Company may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. To date, management has not considered this alternative, nor does management view it as a likely occurrence.

Cash, total current assets, total assets, total current liabilities, and total liabilities as of December 31, 2025, as compared to December 31, 2024, were as follows:

|  | December 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Cash and Cash Equivalents | $1,790,236 | $673,264 |
| Inventory | $29,067 | $6,884 |
| Prepaid expenses | $49,338 | $60,137 |
| Total current assets | $1,868,641 | $740,285 |
| Total assets | $2,565,540 | $1,505,333 |
| Total current liabilities | $10,445,245 | $9,614,428 |
| Total liabilities | $10,564,498 | $9,654,954 |

20

At December 31, 2025, we had a working capital deficit of $8,576,604, compared to a working capital deficit of $8,874,143 at December 31, 2024. Current liabilities increased to $10,564,498 at December 31, 2025, from $9,654,954 at December 31, 2024, primarily as a result of accounts payable.

For the year ended December 31, 2025, net cash used in operations of $1,788,970 was the result of a net loss of $3,623,353 offset by depreciation expense of $25,113, net change in unrealized appreciation in gold bullions of $110,198, gain on sale of gold bullions of $200,433, stock issued for services of $834,600, warrants issuance of $259,493, options issuance of $22,748, imputed interest on related party loans of $79,275, decrease in prepaid expenses of $10,799, increase in inventory of $22,183, and a decrease in operating lease right of use of $55,663, an increase of accrued expenses and other payables-related party of $947,747, increase in accounts payable of $11,891 and a decrease in operating lease liabilities of $56,350.

For the year ended December 31, 2024, net cash used in operations of $1,839,086 was the result of a net loss of $3,398,939 offset by depreciation expense of $26,159, net change in unrealized appreciation in gold bullions of $133,829, warrants issuance of $851,205, imputed interest on related party loans of $81,072, increase in prepaid expenses of $45,235, increase in deposits of $3,656, and a decrease in operating lease right of use of $49,209, an increase of accrued expenses and other payables-related party of $818,538, a decrease in accounts payable of $39,635 and a decrease in operating lease liabilities of $48,172.

Net cash provided by our investing activities were $438,042 for the year ended December 31, 2025 and net cash used in our investing activities were $4,240 for the year ended December 31, 2024. During the year ended December 31, 2025, the Company had net proceeds from the sale of its investment in gold of $443,437 and purchase of fixed assets of $5,395. During the year ended December 31, 2024, the Company had purchase of fixed assets of $4,240.

Our financing activities resulted in a cash inflow of $2,467,900 for the year ended December 31, 2025, which is represented by $2,602,900 proceeds from the sale of stock, $10,000 payment in debt offering costs and $125,000 in principal repayment of debt to a related party.

Our financing activities resulted in a cash outflow of $35,244 for the year ended December 31, 2024, which is represented by $35,244 loan repayment.

### Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, and revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk, and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

### RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

ASU 2025-05 — Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, which provides (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers.

The practical expedient allows an entity to assume that, when estimating expected credit losses, current conditions as of the balance sheet date remain unchanged for the remaining life of the asset. The accounting policy election permits nonpublic entities that elect the practical expedient to also consider collection activity occurring after the balance sheet date when estimating expected credit losses.

The standard is effective for fiscal years beginning after December 15, 2025, and for interim periods within those annual reporting periods. Early adoption is permitted.

Accordingly, the Company will adopt ASU 2025-05 for its fiscal year beginning July 1, 2026.

The Company has evaluated ASU 2025-05 and does not expect the standard to have a material impact on its financial condition, results of operations, or cash flows.

In November 2023, the FASB issued ASU No. 2023-07, *Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures*, to require enhanced disclosures that include reportable segment expenses. The amendments in this update provide that a business entity disclose significant segment expenses, segment profit or loss (after significant segment expenses), and allows reporting of additional measures of a segments profit or loss if used in assessing segment performance. Such disclosures apply to entities with a single reportable segment. These amendments were effective for the Company in 2024 and retrospectively to all prior periods using the significant segment expense categories identified. The impact of the adoption of the amendments in this update was not material to the Company’s consolidated financial position and results of operations, as the requirements impact only segment reporting disclosures in the footnotes to the Company’s consolidated financial statements.

### RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In November 2024, the FASB issued ASU No. 2024-03, *Disaggregation of Income Statement Expenses* to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses including purchases of inventory, employee compensation, depreciation and intangible asset amortization in commonly presented expense captions such as cost of sales, selling, general and administrative expense, and research and development. These amendments are effective for the Company for annual periods in 2027, applied prospectively, with early adoption permitted, and interim periods beginning in 2028. The Company intends to adopt the amendments in this update prospectively in 2027 for annual periods and in 2028 for interim periods. The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations, as the requirements only require more detailed disclosures in the footnotes to the Company’s consolidated financial statements.

In March 2024, the FASB issued ASU No. 2024-02, *Codification Improvements - Amendments to Remove References to the Concepts Statements* to remove various references to concepts statements from the FASB Accounting Standards Codification. This guidance is to clarify guidance, simplify wording or structure of guidance, and other minor improvements. These amendments are effective for the Company for annual periods in 2025, applied prospectively, with early adoption and retrospective application permitted. The Company intends to adopt the amendments in this update prospectively in 2025. The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations.

In March 2024, the FASB issued ASU No. 2024-01, *Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards,* to clarify whether profits interest and similar awards should be accounted for in accordance with *Topic 718, Compensation - Stock Compensation.* The guidance applies to all business entities that issue profits interest awards as compensation to employees or nonemployees in exchange for goods or services. These amendments are effective for the Company for annual and interim periods in 2025, applied prospectively, with early adoption and retrospective application permitted. As the Company does not issue profit interest awards, the impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations.

In December 2023, the FASB issued ASU No. 2023-09, *Income Taxes (Topic 740) - Improvements to Income Tax Disclosures*, to require enhanced income tax disclosures to provide information to assess how an entity’s operations and related tax risks, tax planning, and operational opportunities affect its tax rate and prospects for future cash flows. The amendments in this update provide that a business entity disclose (1) a tabular income tax rate reconciliation, using both percentages and amounts, (2) separate disclosure of any individual reconciling items that are equal to or greater than 5% of the amount computed by multiplying the income (loss) from continuing operations before income taxes by the applicable statutory income tax rate, and disaggregation of certain items that are significant and (3) amount of income taxes paid (net of refunds received) disaggregated by federal, state and foreign jurisdictions, including separate disclosure of any individual jurisdictions greater than 5% of total income taxes paid. These amendments are effective for the Company for annual periods in 2025, applied prospectively, with early adoption and retrospective application permitted. The Company intends to adopt the amendments in this update prospectively in 2025. The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations, since the amendments require only enhancement of existing income tax disclosures in the footnotes to the Company’s consolidated financial statements.

## Controls and procedures

As filed, 7,548 characters.

### Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of December 31, 2025. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are not effective as of December 31, 2025, to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

### Management’s Annual Report on Internal Control Over Financial Reporting.

Our Chief Executive Officer, as the principal executive officer (chief executive officer) and principal financial officer (chief financial officer), is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) or 15d-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, our internal controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of December 31, 2025, the Company’s internal control over financial reporting was not effective for the purposes for which it is intended based on the following material weaknesses:

- *Lack of internal audit function*. During 2025, the Company, upon review of the independent auditors, made some adjustments to its financial statements, including recording an impairment expense against prepaid inventory. Management believes that the foregoing is due to the fact that the Company lacks qualified resources to perform the internal audit functions properly and that the scope and effectiveness of the internal audit function are yet to be developed. Specifically, the reporting mechanism between the accounting department and the Board of Directors and the CEO was not effective, therefore resulting in the delay of recording and reporting.
- *No Segregation of Duties Ineffective controls over financial reporting*: As of December 31, 2025, we had no full-time employees with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to ensure that all transactions are accounted for accurately and in a timely manner.
- *Lack of a functioning audit committee*: Due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, and no audit committee has been elected, the oversight in the establishment and monitoring of required internal controls and procedures is inadequate.
- *Written Policies & Procedures*: Due to lack of written policies and procedures for accounting and financial reporting, the Company did not establish a formal process to close our books monthly and account for all transactions.
- *Lack of controls over related party transactions:* As of December 31, 2025, the Company did not establish a formal written policy for the approval, identification, and authorization of related party transactions.

We are developing a plan to ensure that all information will be recorded, processed, summarized, and reported accurately, and as of the date of this report, we have hired a payroll service firm to manage all payroll functions including tax withholdings. We will take the following steps to address the above-referenced material weaknesses in our internal control over financial reporting:

1\. We will continue to educate our management personnel to increase its ability to comply with the disclosure requirements and financial reporting controls; and

2\. We will increase management oversight of accounting and reporting functions in the future; and

3\. As soon as we can raise sufficient capital or our operations generate sufficient cash flow, we will hire personnel to handle our accounting and reporting functions.

While the first two steps of our remediation process are ongoing, we do not expect to remediate the weaknesses in our internal controls over financial reporting until the time when we start to commercialize a recombinant fiber (and, therefore, may have sufficient cash flow for hiring personnel to handle our accounting and reporting functions).

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was *not subject* to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this report.

### Changes in Internal Control over Financial Reporting

No change in our system of internal control over financial reporting occurred during the fourth quarter of the fiscal year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Filed Mar 30, 2026.
Source: SEC EDGAR, the filing index for accession 0001493152-26-013630. Last ingested by Listed: Oct 24, 2026, 15:09 ET. No prices; not investment advice.