BOURQUE INDTS INC (PINK:BORK) Dodge Bullets
Yesterday was a great day for BOURQUE INDTS INC (PINK:BORK). More than 2 million of their shares changed hands and the price rocketed by a whopping 52%. Is this a temporary phenomenon, however?
As always, we’ll start with the basics. BORK was established back in 1978. Like many other small cap companies, they were in the gold exploration business for quite a while. Unlike some of their colleagues, in 2011, BORK realized that the gold venture will not be profitable and so they moved on in a completely different direction and created a new type of metal alloy, that is supposed to be used in bullet proof vests, vehicle protection and, most importantly, has a really cool name: Kryron. If we have to be honest we did laugh a little when we read all this, but still we decided to give BORK a chance.
So what created the massive jump yesterday? Well, there was a press-release which stated that BORK has closed a sale for around $250,000. Furthermore, it would seem that they have found another use for their named-after-a-Star-Trek-character alloy. It is going to be used for the production of LED heat sinks. We can’t be sure if this will be the best use for this sort of expensive metal, but we suspect that it is exactly this change in direction that got investors so excited. BORK have been struggling to market the magical alloy in the armor industry and, apparently, they finally moving on. But is this new direction really going to be successful?
To find out, we opened the latest financial report to see how they have been getting on so far. The latest filing covers the six months that ended on November 30, 2012 and it contains the following numbers:
- cash: $900
- current assets: $15 thousand
- current liabilities: $ 862 thousand
- revenue for the period: $28 thousand
- net loss for the period: $1.2 million
- net loss since inception: $42 million
You would probably agree that these are some serious losses and, although it’s a step forward, a single $250 thousand sale will not make up for them. So, at least for now, the Kryron as a heat sink material still has a long way to go.
Of course, there are many other ways to reduce the losses like, for example, lowering the CEO’s salary. We doubt that this will happen, however, since, the CEO in question, Mr. John Bourque (who receives a staggering $360,000 a year) is also the major shareholder of BORK, which means that he calls the shots.
While we’re on the subject of Mr. Bourque, (also the inventor of Kryron), we should mention that he has had a few run-ins with the law over the last years. Back in 2002 he served some time in prison for driving under the influence, and to top it all off, in August 2012, he was caught drunk behind the wheel once again. According to this article he was facing some serious time behind bars this time, but unfortunately we couldn’t find out what the outcome of the trial was.
We’re not saying that BORK can’t work without Mr. Bourque, but we somehow feel that if he continues to make media headlines like these ones, he will hurt his company’s reputation. And, as always we would urge you to carefully consider the risks before jumping in on the hype created by the recent news.