In Part 1, following our theme that “past is prologue“, we looked at the history of Nexia Biotech, an older recombinant spider silk company, that quickly pivoted to transgenic drugs for biodefense, that then became an oil field services company, Enesco, which finally managed to go bankrupt.
In Part 2, please keep in mind another saying at BuyersStrike! HQ, “pedigree counts“.
Soon after the failure of Nexia’s transgenic spider-goats, and the transformation of Nexia into an oil company in 2006, a new spider silk player emerged. In early 2006 a small company was incorporated in Wyoming. Having raised no money from legitimate venture capitalists, in 2007 this start-up, Kraig Biocraft Laboratories, filed an SB-2 for an honest-to-goodness penny stock offering. Shares were being offered at a mere 3c! The company was not even going to receive any of the proceeds, all of the shares were being sold by existing shareholders.
The two men responsible for this abomination? Kim Thompson, CEO and sole director, and a name that should be familiar to penny stock scam fans, superstar shell factory lawyer Gregg Jaclin:
Read about Gregg’s penny stock exploits in this piece by Teri Buhl. Jaclin was busted by the Feds in 2017:
read more about Gregg’s troubles here.
Kraig’s business? Recombinant spider silk. From the SB-2 filing:
The ProductIt has long been known that certain fibers produced in nature possess unique mechanical properties in terms of strength, resilience and flexibility. These protein based fibers, exemplified by spider silk, have been the subject of much interest to materials scientists.We believe that the production of recombinant protein based polymers in commercial quantities holds the promise of a material, which is lighter, thinner, more flexible, and tougher than aramid fibers. Other applications include use as structural material for aircraft, and for any application in which light weight and high strength are required.While the properties of spider silks are well known, there is presently no known way to produce the fibers in commercial quantity. The spiders are cannibalistic, and can not be raised in concentrated colonies.The TechnologyWhile scientists have been able to replicate the proteins that are the building blocks of spider silk, the technological barrier that has stymied production, is the incapacity to form these proteins into a fiber with the desired mechanical characteristics.We have acquired the right to use the patented genetic sequences and genetic engineering technology developed in two university laboratories. Our technology builds upon the unique advantages of the discoveries made within the university system. The university technology, in collaboration with our own concepts and leadership, form the foundations of our research and product development.We are working to use this genetic engineering technology to create recombinant protein based polymers. Management is committed to steering the research toward the development of commercial production of spider silks, spider silks analogs and new polymers composed of recombinant proteins. The goal is to create recombinant fibers for use in the technical textiles market.The inventor of this technology concept, Kim Thompson, is the founder of Kraig Biocraft Laboratories, Inc.
That last sentence bears repeating:
The inventor of this technology concept, Kim Thompson, is the founder of Kraig Biocraft Laboratories, Inc.
Really? Kim Thompson is the inventor of recombinant spider silk? Funny, his resume doesn’t mention any prior experience at Nexia, nor any other relevant experience either with spiders, or with silk.
KIM THOMPSON, 46, President, CEO, and Director. Mr. Thompson was a founder of the California law firm of Ching & Thompson which was founded in 1997 where he specialized in commercial litigation. He has been a partner in the Illinois law firm of McJessy, Ching & Thompson since 2004 where he also specializes in commercial litigation. Mr. Thompson received his bachelor’s degree in applied economics from James Madison College, Michigan State University, and his Juris Doctorate from the University of Michigan.
Maybe Kim was moonlighting all of those years, maybe the company has tons of patents either assigned to it, or still held by Kim? Buried in the filing is this gem:
THE COMPANY HAS NO PATENTS OR DESIGN PATENTS ON ANY OF ITS PRODUCTS IN DEVELOPMENT.At this time, the Company has no patents or design patents on any of its products in development. As a result, there is a possibility that the Company’s products could be imitated or directly manufactured and sold by a competitor. It is also possible that some or all of the Company’s research, development ideas and proposed products are covered by patent rights held by some other entity. In that event, the Company could incur devastating liability and be forced to cease operations.
Fast forwarding to today, nearly 12 years later, KBLB still has exactly 0 US Patents. From the recent 10K:
License Agreements/Intellectual PropertyWe have obtained certain rights to use a number of university created, and patented, spider silk proteins, gene sequences and methodologies.Between 2010 and 2014 the University of Notre Dame filed approximately twelve patent applications pursuant to our intellectual property and collaborative research agreement. Under the terms of that agreement the Company has an option for the exclusive commercial rights to that technology. The Company has notified the University of its exercise of that option. These patent applications include coverage in the United States, Europe, South Korea, Vietnam, Brazil, India, China, Australia, Japan, and Canada. As of the date hereof, two patents have been issued, number 10-1926286 in South Korea and number 2011314072 in Australia, all remaining patents applications are still in process.