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Mr.Verres explains Project Lycanthrope to the kids.

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Mr. VerresShade is the end result of a series of experiments conducted illegally by a group of scientists working under false pretenses. They got funding by making claims that they were working on vaccines and other beneficial medical treatments. They actually did do some work in that area so as to seem legitimate, but in actuality they were working on a project of a completely different nature.
Mr. Verres(off screen) That project was what we have dubbed the Lycanthrope Project. The general idea was to breed and train people who appeared to be normal humans, but could transform into panic causing monsters at will. It has been theorized that they were meant to act as untraceable assassins on account of their being able to do their dirty work in animal form which would result in confusion for any crime lab attempting to discover the identity of the assassin.
Mr. Verres(off screen) The first attempt at this was the creation of a man who could transform into a guinea pig. What resulted was a slow-witted creature named Guineas that preferred to remain in animal form at all times to avoid the pain of transformation. As you can imagine, one's body being restructured in a matter of seconds isn't a pleasant process.
Mr. Verres(off screen) So they attempted to improve on the basic design by using a hedgehog. This hedgehog man, or Hedge, proved to be better equipped in almost every way. Perhaps not due to choice of animal but rather improved technique by the scientists. While the pain experienced during transformation was still a factor, the hedgehog was able to handle this well enough for the scientists to be briefly satisfied.
Mr. Verres(off screen) Soon they decided to design a vampire bat, one who could fly and drain the blood out of its target. The result was Vlad, a deadly creature but one who was considered a failure. While he could indeed fly and drain blood, the transformation was so elaborate that Vlad ran the risk of killing himself every time he transformed. He remained in half-bat form at all times as a result.
Mr. Verres(off screen) After Vlad, they decided to address the issue of the pain caused by transformation. To this end they made Shade Tail, the first and last creation to naturally release painkillers when transforming. She was considered a failure; the painkillers had side effects that made her ineffective as a killer. Not only that, but she herself hated violence and could not be trained in any form of combat.
Mr. Verres(off screen) Eventually the company fell under suspicion, and it became my duty to infiltrate it. Shade was about 13 at the time, and my job was to keep track of her health. Thanks to me, she got taken out of those horrendous combat training exercises meant to make her into a killing machine like her "brothers".
Mr. Verres(off screen) It took some time for me to be able to leave safely with the information I had gathered. Right before a team was put together to put an end to the company, something happened that ended it for us. Someone else's pet project apparently broke into the facility, killed all the scientists inside and took their creations with it. No images exist of this creature.
Mr. Verres(off screen) However, Shade and I talked earlier while Tedd was still sleeping. As far as she knows, this creature is not a creature at all but a really powerful human: at the very least she has never seen him transform. His name is Damien, and he has cared for her and her "brothers" for some time but is a threat to everyone else on the planet.

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