Kraig Biocraft Laboratories, Inc. (OTC:KBLB) Reverses by 25%
Kraig Biocraft Laboratories, Inc. (OTC:KBLB) is perhaps the only company that expects to be covered in cobwebs- literally, as it produces genetically modified spider silk. Yet the difficult and lengthy product development has left the stock with underwhelming performance, and on Tuesday the ticker slid down 25% to 9 cents.
On the plus side, KBLB has been diligent in its laboratory efforts, reportedly producing viable strong fibers from silk worms capable of producing spider silk. Yet so far the fiber has not been tested and used in a final textile product, and a few more stages of development are to be expected before KBLB comes out to market. The latest 10-K form shows KBLB will fund its development plans with:
- $58,782 cash
- $1.2 million current liabilities
- $8.4 million accumulated net loss
The company is currently capped at 54 million dollars, with more than 600 million shares outstanding. It is unknown how many shares are authorized and if KBLB plans new financing in 2013. Still, the company has given hint of its expenses, around $35,000 per month in polymer research, and yet another research program at the Uniwersity of Wyoming for $13,700 per month.
But even more curious is the plan to buy a cash cow company, as this way KBLB may receive funding, but also become a vehicle for another business to gain exposure to the OTC markets. Such reverse buyouts are not unusual in penny stock circles, and while KBLB may be showing genuine interest, this is something of a red flag, given that a stock acquisition may mean dilution of the shareholder base.
For the last time, KBLB was promoted on March 8th, and has lost some of the luster since. The pumper was a specially created newsletter, compensated with $160,000, a significant sum for five emails. After the mention, KBLB continued to rise on a series of press releases, but started to reverse the trend a few days ago.
In 2011, KBLB was taken up by Global Equity Report, a company specializing in day trades that could yield high returns in a short time. Its last pick was American Liberty Petroleum, Corp. (OTC:OREO), a ticker that slid to a single cent on a series of speculative days of buying, followed by selling to lock profits. KBLB holds the risk of promising too much without delivering, which could lead to loss of investor interest. Keep this in mind and be certain you only invest sums that you are comfortable losing.