Spider Silk

ANNUAL REPORT | 2024

TABLE OF CONTENTS

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Mission Statement

Director’s Message: 2024 Annual Review

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08

A Letter to Our Shareholders: Who We Are and What We Do

Our History: Our Research to Consumer Development

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The Market for Spider Silk: Aerospace, Athletic Wear & NASaA

Financial Highlights: 2024:Our Year in Review

customerservice@spidersilk.com 4837 London Street | New York City 28475

MISSION STATEMENT Our mission here at Spider Silk Artificial Bioengineering, is to scientifically produce artifical spider silk in commercial quantities that hold potential life-saving ballistic resistant material, which is lighter, thinner, more flexible, and tougher than steel. Spider Silk Artificial Bioengineering believes that in the near future, genetically engineered spider silk will make significant inroads into the market for high-strength fibers.

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WELCOME THE NEWEST MEMBERS OF THE BOARD

MARSHA CAMPOS

LEONARD FRANTZ VICE PRESIDENT

CHIEF OPERATING OFFICER

CHARLIE DALTON

SHERYL HILLS

HEATHER BRANT

SENIOR VICE PRESIDENT

CHIEF FINANCIAL OFFICER

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CHEIF CREATIVE OFFICER

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LIAM FREEMAN

ASSISTANT BIOLOGICAL ENGINEER

DIRECTOR’S MESSAGE 2024 ANNUAL REVIEW

I am delighted to share the Institute of Biomaterials and Biomedical Engineering’s (Spider Silk) 2024 annual report, which showcases our many accomplishments over the past academic year. It has been a great period of growth for Spider Silk. Research impact is central to Spider Silk’s mission, and we continued to lead in this regard globally. Despite historically-low federal funding rates, total research and student fellowship funding in Spider Silk for 2024 equalled our all-time high. Spider Silk researchers translated their funding into several discoveries and innovations, including new nanoparticles to target cancer; novel electrical stimulation methods in clinical trials to control bladder function; improved diagnostic tests for rapid determination of risk in acute leukaemia; and injectable patches to repair damaged hearts.

Spider Silk faculty members also continued to drive broader research enterprises at U of T, including as leads of the Medicine by Design program in regenerative medicine and the heart failurefocused Translational Biology and Engineering Program in the Ted Rogers Centre for Heart Research.

Our former associate director of sales, Julie Audet, was appointed vice president of sales, and our former director, Christopher Yip, was appointed

HENRY SIMMONS CHIEF EXECUTIVE DIRECTOR

to lead global initiatives as U of T’s associate vice-president of international partnerships. Spider Silk is especially proud of Molly Shoichet for receiving the Killiam Prize in Engineering, and Paul Santerre for being recognized with the Governor General’s Innovation Award. I am proud of our progress and accomplishments in the past year.

Henry Simmons | Chief Executive Director

• STUDIED MECHANOBIOLOGY AT THE VANDERBILT SCHOOL OF ENGINEERING • FOUNDED SPIDER SILK IN 2015 • COWROTE A BOOK ON ARTIFICIAL BIOENGINEERING NY BESTSELLERS LIST • SPENT OVER 10 YEARS RESEARCHING SPIDER SILK

THE NEAR FUTURE, GENETICALLY ENGINEERED SPIDER SILK WILL MAKE SIGNIFICANT INROADS INTO THE MARKET FOR HIGH-STRENGTH FIBERS.

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FACTS • Founded in 2015 by current director, Henry Simmons.

• Spider Silk is over 20 times stronger than kelvar and steel.

• Used in a variety of military, industrial, and consumers.

A LETTER TO OUR SHAREHOLDERS WHO WE ARE & WHAT WE DO

It has long been known that certain fibers produced in nature possess remarkable mechanical properties in terms of strength, resilience and flexibility. These protein based fibers, exemplified by spider silk, have been the subject of much interest due to spider silk’s incredible toughness. Because of its strength, resilience and flexibility, spider silk holds great promise for commercial and consumer applications. While the superior properties of spider silks are well known, there was no known way to produce spider silk in commercial quantities. Since spiders are cannibalistic, they cannot be raised in concentrated colonies to produce silk.

The production of spider silk in commercial quantities holds the potential of a life-saving ballistic resistant material, which is lighter, thinner, more flexible, and tougher than steel. Other applications of spider silk include use as structural material and for any application in which light weight and high strength are required. Spider Silk Artificial Bioengineering believes that E. Coli bacteria from which the artifical spider silk is developed.

in the near future, genetically engineered spider silk will make significant inroads into the market for high-strength fibers.

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COMPARISON OF PROPERTIES OF NATURAL SPIDER SILK, KELVER AND STEEL

MATERIAL TOUGHNESS TENSILE STRENGTH

SPIDER SILK KELVAR STEEL

120,000-160,000

WEIGHT

1,100-2,900 1.18-1.36

30,000-50,000 2,600-4,100 1.44 2,000-6,000

300-2,000 7.84

LETTER TO SHAREHOLDERS CONT. Since, 2021, Spider Silk Artificial Bioengineering is now the world leader in genetically engineered spider silk technologies. We earned that place by applying our proprietary genetic engineering spider silk technology to an organism which is already one of the most efficient commercial producers of silk: The domesticated silkworm.

Spider Silk’s technology builds upon the unique advantages of the domesticated silkworm for this application. Forty percent (40%) of the caterpillars’ weight is devoted to the silk glands. The silk glands produce large volumes of protein, called fibroin, which are then spun into a composite protein thread (silk).

We have used genetic engineering technology to create spider silk. A part of Spider Silk’s intellectual property portfolio is the exclusive right to use the patented spider silk gene sequences in silkworm.

Marsha Campos | Senior Vice President E. coli bacteria being extracted for research and development into the next process of the silk.

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SEPTEMBER 30, 2019 Made a deal with biotechnology giant Sigma-Aldrich that we believe will pave the way for the future of our company.

2019

JUNE 05, 2021 , Planned to launch the initial commercial production of our spider silk, Monster Silk™.

2021

DECEMBER 30, 2019 Announced that the company moved its corporate headquarters to a new location in New York City.

OUR HISTORY

FROM RESEARCH TO CONSUMER DEVELOPMENT Based on proprietary genetic en-

Our work has succeeded in cre-

polymers that we believe have the

gineering technology, Spider Silk

ating and developing new fibers

potential for significant indus-

Artificial Bioengineering has suc-

that have never been seen before

trial and consumer applications.

cessfully developed and produced

with extraordinary properties of

In 2016, Spider Silk Biocraft Labs

next-generation

and

strength and flexibility. We’re

was awarded its first U.S. Army

protein-based fibers including re-

focused on the continued devel-

contract, with whom we hope to

combinant spider silk through e.

opment of new recombinant spi-

help produce the next generation

coli bacteria found in the earth.

der silks and other high strength

in soldier protective equipment.

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polymers

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JANUARY 21, 2022 , Spider Silk announced it hired a

FEBURARY 28, 2024

new CFO Charlie Dalton, who will

Future Materials Magazine fea-

be responsible for all financial

tured Spider Silk in an article

assets and revenue data.

titled “Strong as Silk”, as well as on the magazine’s cover.

2022

2024

JULY 12, 2024 We announced our first U.S. Army contract with whom we will be

APRIL 19, 2022 ,

developing the next generation in

Announced receiving fiber testing

soldier protective materials.

equipment, including customized components, to test latest genetically engineered prototype fiber, Big Red™.

JANUARY 12, 2024 Spider Silk announced a breakthrough: The success of our micro-injections of Sigma-Aldrich’s zinc finger technology, and the creation of seven new strains of ZF transgenics.

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“Spider Silk” The North Face Goldwin Ski Jacket.

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THE MARKET FOR SPIDER SILK AEROSPACE, ATHLETIC WEAR, NASA

Spider Silk is focused on the creation, production and marketing of high performance and technical fibers such as spider silk. Because spider silks are stronger and tougher than steel, they could be used in a wide variety of military, industrial, and consumer applications ranging from ballistic protection to superior strength and toughness.

The global market demand for technical fibers is growing rapidly and these materials have become essential products for both industrial and consumer applications. By 2021, the annual global market for technical fibers had already reached approximately $133 billion.

We believe that the superior mechanical characteristics of the next generation of spider silk will open up new applications for the technology and result in a significant increase in demand. The materials which we are working to produce are stronger than steel. Spider silks can justifiably be referred to as “super fibers.�

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FINANCIAL HIGHLIGHTS

2024: OUR YEAR IN REVIEW

EXPENSE BREAKDOWN

General & Administrative

Officer’s Salary

Professional Fees

Research & Development

50% 10%

15% 25%

REVENUE RECOGNITION Spider Silk is also currently work-

the U.S. Government monthly and

contract with the US Army. On July

ing on the awarded option exten-

invoices are typically paid within

24, 2024, Spider Silk signed a con-

sion to develop new recombinant

30 days. For the years ended De-

tract option extension with the US

silks. Cost plus fixed fee contracts

cember 31, 2023 and 2024, Spider

Army to research and deliver recom-

Revenue is recognized on cost-

Silk recognized $97,318 and $31,858

binant spider silk fibers and threads.

plus-fixed-fee contracts with the

respectively in revenue from the

This

U.S. Government on the basis of

Government contract. These rev-

the total contract award by an

partial performance equal to costs

enues were generated for work

additional $921,130 to a total of

incurred plus an estimate of

ap-

performed in the development and

$1,021,092 and added 12 months to

plicable fees earned contractually

production of the Company’s re-

the contract.

entitled to reimbursement of costs.

combinant silks under the base and

Invoicing for costs are reported to

option period phases of our ongoing

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contract

option

increased

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2024

NET REVENUES

2024

2023

CHANGE

% CHANGE

$ 97,318

$ 31,858

65,460

205.47%

OPERATING EXPENSES: GENERAL & ADMINISTRATIVE PROFESSIONAL FEES OFFICER’S SALARY RENT - RELATED PARTY

1,217,050 1,736,918 (519,868)

-29.93%

322,215 396,125 (73,910)

-18.66%

444,596 447,283 (2,687)

-0.60%

10,560

- 10,560 100.00%

RESEARCH & DEVELOPMENT

258,892 397,136 (138,244)

-34.81%

TOTAL OPERATING EXPENSES

2,253,313 2,977,462 (724,149)

-24.32%

LOSS FROM OPERATIONS DEBT FORGIVENESS GAIN INTEREST EXPENSE NET LOSS

(2,155,995) (2,945,604)

789,609

-26.81%

- 11,191 (11,191) -100.00% (177,105) (139,430) (37,675) $ (2,333,100)

$ (3,073,843)

740,743

27.02% 24.10%

The Company’s revenues are generated primarily from contracts with the U.S. Government. Spider Silk performs work under the cost-plus-fixed-fee contract. Under the base phase of this contract the Company has produced recombinant spider silk for weaving into ballistic shootpacks.

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SPIDERSILKLABS.COM | 718-832-6183 4837 LONDON STREET NEW YORK CITY 28475

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