Rainbow Coral Corp (OTCMKTS:RBCC) Falls Below $1 Per Share

[[tagnumber 0]][[tagnumber 1]]After reaching heights of more than $7 per share in the second half of July we saw the stock of Rainbow Coral Corp (OTCMKTS:RBCC) rapidly lose altitude, before attempting another upward run in the middle of last month. Unfortunately, the ticker returned to its downward slide pretty fast and things can turn pretty ugly for people who bought shares at those high prices.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]One of the reasons for which the ticker simply couldn’t hold the levels it saw in the past months is the fact that it was heavily overvalued. This becomes extremely obvious when you take a quick look at what the company had to show in the balance sheet contained in the report for the second quarter of the year.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 9]] [[tagnumber 10]]cash: $2,740[[tagnumber 11]] [[tagnumber 10]]current assets: $4,524[[tagnumber 11]] [[tagnumber 10]]current liabilities: $517,798[[tagnumber 11]] [[tagnumber 10]]quarterly revenues: $27,683[[tagnumber 11]] [[tagnumber 10]]quarterly net loss: $136,929[[tagnumber 11]] [[tagnumber 20]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]But this is not the only disturbing reality surrounding the stock of [[tagnumber 24]]RBCC.[[tagnumber 25]] As we have previously discussed in our articles there is the matter of the massive amount of common stock that was issued as conversion of debt. Despite the fact that the ticker’s price was expected to rise after the 1 for 100 reverse split at the end of May, the company management didn’t decide that it was a good idea to alter the terms of the convertible notes that the company had previously issued.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]This led to the issuance of 8,402,094 shares of common stock at a price of just $0.02 per share in order to satisfy $167,982 worth of debt. And while the dilution is impressive, we don’t see any big things happening with [[tagnumber 24]]RBCC.[[tagnumber 25]] The company wants to be treated as a biotech, but the revenues that it generates come from selling aquarium supplies.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]If you look at all the press releases issued by the company in the recent months you will see quite a lot of wishful thinking and absolutely no action. The have been “[[tagnumber 36]]weighing options[[tagnumber 37]]”, “[[tagnumber 36]]considering future moves[[tagnumber 37]]” and “[[tagnumber 36]]taking notes[[tagnumber 37]]” for the past several months without any results whatsoever.[[tagnumber 2]] [[tagnumber 0]] [[tagnumber 2]] [[tagnumber 0]]Considering all this we aren’t surprise from yesterday’s 19.35% drop that led [[tagnumber 24]]RBCC[[tagnumber 25]] to nest at $1 per share, nor by the fact that the ticker keeps falling today. As of the writing of this article [[tagnumber 24]]RBCC[[tagnumber 25]] is sitting at $0.915, but we reckon that it can go even further down with time. Doing your due diligence and weighing out the risks before putting any money on the line is absolutely crucial.[[tagnumber 2]]