Double-digit gainers have always been attractive enough to lure market players into trading with them. Yet, there are exceptions to this rule and the stock of Kallo, Inc. (OTC:KALO) is exactly one. For its momentary growth looks like it has been induced by artificial rather than natural market powers.
While KALO stock did gain 10.22% closing at $0.1499 yesterday on a volume of a little less than 214 thousand, it did so mainly because there was a full-blown promotinal campaign going on. Comprising 8 emails worth a total of at least $20 thousand paid by third party Equities Awareness Group, the advertising effort did its best to raise awareness about KALO. To a certain extent, the promotion worked and KALO went up 10%, much to the delight of the campaign’s initiators. However, what is it that this company has achieved that it, according to the promoters involved, should deserve high publicity among investors?
Previously known as Printing Components, Inc. and Diamong Technologies Inc., the company went public following the acquisition of Kallo Technologies Inc 2,5 years ago. KALO’s business has since been focused on the development and manufacturing of medical information technology software capable of retrieving patient data and combining it into a single comprehensive electronic record. So far so good. Hardly enough, though. Ever since the company shifted to this business, it has not got a penny in revenue, and this is just the tip of the iceberg. KALO’s tangible assets barely comprise 1/10 of its total debt as of Mar. 31, 2012. As for its cash reserves of $260K, they could hardly be of any significant service at the moment.[BANNER]
In spite of KALO’s dreadful balance sheet, the performance of its managers has been evaluated at a fairly premium rate. The company’s salaries and compensation espenses for 2011 exceed $3 million and 84% of this amount is due to CEO John Cecil and President Vince Leitao both in the form of cash payments and stock awards. The former holds 39.2 million shares of common KALO stock, i.e 28%, while the latter – 16.9 million, which amounts to 12%. Considering that the company has been diluting regular shareholders at a breakneck pace for the last few quarters or so, both executives will probably increase their interests. Need additional proof? As of Dec. 31, 2010, KALO’s O/S was 39.1 million. One year later, i.e a/o Dec. 31, 2011, it had already shot up to 113.1 million, only to come in at 142.8 million in Q1 of 2012.
KALO’s most recent press releases hint at some real progress on its technologies. The company managers claim to have entered into negotiations with the authorities of a bunch of different countries in order to popularize their medical software solutions. Nevertheless, it has yet to seal a definitive contract. As soon as (and if) it manages to do so, KALO stock will hardly need external help to get pumped on the charts, especially by failed promoters such as Stock Rock and Roll. When the latter got paid $25 thousand to pump the stock of Liberty Gold Corp. last month, LBGO shares suffered a first-day loss of 13%. Where has it gone so far? Look at the underlying chart for reference.
