Life Stem Genetics Inc (OTCBB:LIFS) Files Q3 Results, Pump Intensifies

Life Stem Genetics Inc (OTCBB:LIFS) registered yet another green session yesterday, inching a further 5.49% up and shifting more than $1.96 million worth of shares. When the closing bell rang, the ticker was standing at its 52-week high of $1.73 per share which means that the market cap has now exceeded $77 million. If you have been following LIFS over the last three weeks, you’ll probably say: “What else is new?”.

Quite a few things, actually. As we mentioned yesterday, the company issued a press release before the start of the session saying that it has completed a $1 million private placement which should mean that they now have the money to lure in additional affiliate clinics, form partnerships and joint ventures. Even before they had the cash, they were still signing letters of intent and appointing specialists like James Vanden Bosch so now things should look even better.

After the announcement, they filed the 10-Q covering the third quarter of 2013 and the figures in it might have quenched the enthusiasm of some of the investors. Here’s a summary of the most important financials:

• current assets: $20 thousand in cash
• current liabilities: $240 thousand
• no revenue since inception
• net loss since inception: $259 thousand

Of course, the aforementioned private placement means that LIFS‘ balance sheet should look a lot better right now but even so, there is one thing bothering us. We can’t help but think that they are having some problems setting their priorities straight.

Bear in mind that this is a new bioscience company that is in the very early stages of development and needs all the cash it can get. Open page 14 of the 10-Q, however, and you will see a paragraph which informs us that on September 25, LIFS paid Contrarian Press (CP) no less than $300 thousand and in exchange, CP were supposed to create “a database of potential investors“. We can’t be sure if the said database has indeed been established, but we know of a report that CP put together and distributed. We talked about it numerous times over the last two weeks and if you have been following our articles closely, you know that it contains some rather disturbing red flags. What’s even worse, the same report became the basis of a $1.78 million promotion that seems to have grown quite a bit over the last couple of days.

At first, it was just Contrarian Press’ emails and the first landing page containing their report. A few days later some additional newsletters joined the party and, as we mentioned yesterday, Andy Carpenter and his Wall Street Revelator (WSR) also got their share of the colossal budget. Three more landing pages were set up by WSR and now InvestorPlanet, SuperSt0ckPlays and BuyPennyStocks are hard at work spreading the optimism around.

What’s more, some investors have reported hard mailer brochures being delivered to their doorstep which means that things are getting more and more dangerous by the second, despite the seemingly good news.

LIFS has already run high enough and a potential correction seems inevitable. Things could get even uglier if the SEC decides to interfere like they did with Sovereign Lithium Inc (OTCMKTS:SLCO). Make sure you tread very carefully and consider all the risks before making your final decision.