Life Clips Inc.(OTCBB:LCLP)’s Charts Turn Ugly
Life Clips Inc. (OTCBB:LCLP) had made a pretty impressive climb in the last two weeks, even managing to climb above the half-dollar mark yesterday – but now it seems like it is all coming tumbling down. Why?
Judging by the company’s PR, everything was going oh so well for LCLP. Yesterday saw it add a solid 31.36% to its market cap after making yet another one of these, but it is dropping like a rock in today’s early trading.
Still, this should not have been an unexpected turn of events – not for anyone that’s actually done due diligence on LCLP, anyway. Because while the company may talk big, its financial reports clearly show that it is lagging behind on delivery as far as actual commercial achievements are concerned:
- Cash & total current assets – $206 thousand
- Total Current Liabilities – $153 thousand
- Convertible Notes Payable – $5.5 million
- NO REVENUES
- Total operating costs – $152 thousand
That’s a pretty grim set of numbers, with the $5.5 million worth of convertible debt being a horrendous indicator of LCLP’s dubious nature. However, the sheer weight of the company’s indebtedness is not the only thing that investors definitely need to note here.
No, an even bigger red flag can be found a bit further down in the company’s financial report, which just briefly mentions that said debt is convertible at “$0.017, $0.026 and $0.15/share (on December 31, 2015), however, the Notes include a “ratchet feature”, which allows for a lower offering price based on market prices.”
With this in mind, investors should have a pretty good idea about the most probable reason for LCLP’s current tumble. Let the buyer beware.
