Kraig Biocraft Laboratories Inc (PINK:KBLB) Spring Back to Life

Kraig Biocraft Laboratories Inc (PINK:KBLB) have been among the most heavily pumped companies during the last couple of months. Waves upon waves of promotional emails have been flooding the inboxes and the result is clear from the chart on the right. Before the commotion created by the pumpers, the ticker was all but dormant and it was traded at prices a lot lower than the ones we see right now. When the excitement took hold of the investors, however, the price jumped and KBLB gained a lot of ground in a very short period of time. The thing that surprised us most of all, however, was the fact that although the newsletters have been quiet for more than a week now, the stock’s performance has been relatively stable.

Is it a calm before the storm, though? Well, there are such indications. Yesterday, there was a lot of trading and a total of 2.7 million shares changed hands. The price did see some movement as well and, although it was not that dramatic, they did manage a 15% increase. There might be a good reason for this as well.

KBLB have been pumping out quite a lot of press-releases recently in an attempt to keep the excitement going while the pumpers are preparing the next round of emails. Most of the PR’s don’t sound all that interesting, but the one that came out a few hours before the start of yesterday’s trading session stated that they have finally managed to produce a few spools of their magical Monster Silk thread. While KBLB are still a long way off the commercial production of the ground-breaking fibers, we’re sure that this announcement has managed to put a smile on the shareholders’ faces and, judging by the high volume, potential investors were also excited. But are things really as optimistic as the press-release suggests?

Well, as KBLB themselves say, they still need to put their innovative fabric into commercial production for which they will need some money. There will be some expenses on marketing the thing as well and, if the wind is fair, they should be able to sell it on for a profit. So, do they have the finances to make it?

Unfortunately, while press-releases have been plenty, KBLB have not managed to come up with a new financial statement, which means that we can’t be sure if they have the resources to finally turn things around and become a profitable company. If the latest 10-Q for the third quarter of 2012 is anything to go by, they don’t. Here are the most important figures once again:

• cash: $136 thousand
• current assets: $143 thousand
• current liabilities: $1 million
• no revenue
• quarterly net loss: $292 thousand
• net loss since inception: $8 million

All in all, if the announcement that they made yesterday is true, they are closer to succeeding than ever before. They are not out of the woods just yet, though. There are quite a lot of liabilities to be taken care of and in order to satisfy them, they will need to start making money as soon as possible.

That is why, while they might have some potential, we’re not ready to classify KBLB as a truly viable investment alternative just yet.