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Life Clips Inc (OTCMKTS:LCLP): A Turnaround Penny Stock

Life Clips Inc (OTCMKTS:LCLP): A Turnaround Penny Stock
Written by
Jarrod Wesson
Published on
October 16, 2017
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Our readers will remember well our articles about Life Clips Inc (OTCMKTS:LCLP).We previously said that buyers needed to beware while dealing with the stock, as the company's financials were not the best. We were not wrong.The first article was published on July 12, 2016 when the share price was trading at approximately $0.5. After our coverage was released, the price went down slowly to touch the level of $0.0008 as of today. Company LogoIn July and August, we again reviewed the stock in "Life Clips Inc. (OTCMKTS:LCLP) Taking Steps To Make A Comeback" and our opinion on this name changed. Keep in mind that we have been covering LCLP for a year and have developed an understanding of the company and how the stock trades.The management had announced several initiatives that we had appreciated; the creation of two new divisions and the completion of an acquisition. On top of it, the company entered into the rapidly growing cannabis industry, which we considered a great move. To sum up, we concluded that the market may be punishing the stock too much and a turnaround could occur.What happened next?In our opinion, the market also became aware of the most recent initiatives. In August and September, the amount of shares that changed hands everyday picked up. Some days the volume spiked to almost 100 million shares.But, the most interesting was still to come.In October, the share price picked up from $0.0004 to $0.0016. The spike was incredible and returned close to 300% to those market participants who were able to understand the turnaround. On top of it, more than 200 million shares changed hands the same day, which shows that market interest is finally coming back.Have a look at it, before we explain you what's going on: Year to date chart for LCLP 1 month chart for LCLPFor those who have no time to read the previous research, let's rapidly review the company's business model. Life Clips provides global sourcing, logistics, and multi-channel sales and marketing services. Five business units can be differentiated:

  1. Global Sourcing Services
  2. Global 3PL Logistics Services
  3. Multi-Channel Retail Sales and Marketing
  4. Our own branded products
  5. US and Global Manufacturing operations

Recent DevelopmentsOn August 15, 2017, the company signed a Sales Representative Agreement with PB, Inc. doing business as Pebblebee™. According to the contract signed, LifeClips will be promoting and selling the products of this client worldwide. The contract does not seem very significant, as we don't get to to know the following: specialty customers that may be interested in these products were said to be Amazon.com, AT&T, Best Buy, Staples, Target. Huey Long, CEO of Life Clips, said, in our opinion, the most significant words once he mentioned that this is a revenue opportunity:

"By having the exclusive rights to sell Pebblebee products to high profile customers, we look at this as a significant revenue producing opportunity.” Source

Let's get to know a little more about Pebblebee™.It is a company that has been distributing a device since 2013 that helps quickly locate your belongings and your phone through a free app called Pebblebee App. Home StoneIs their demand?Yes, there is.According to the company, over 800,000 units have been sold worldwide. But that's not all. Pebblebee™ has five issued USPTO patents with over a dozen additional patents currently being examined. It is a company that keeps the innovations going. Thus, it seems to be a great partner for a company like LCLP.Regarding the filings received by the market, the most significant was announced on October 3, 2017. The number of authorized shares had been increased from 800,000,000 shares to 5,000,000,000 shares. This is good news and may explain the price reaction that occurred in October.Why?In another filing, the company explained the reason for approving this increase. It was said that it will help the company raise capital, complete transactions beside among other reasons. Additionally, "the common stock will be more attractive to a broader range of institutional and other investors." In our opinion, the market became excited, as this step is usually executed when companies prepare transactions with other groups.ConclusionCurrently trading with a market cap of $0.5 million, LCLP is an exciting story among small caps. With only $0.17 million in cash, $0.25 million in total assets and $4.7 million in total liabilities, the company will need new funding soon. Thus, we will need to check this fact from time to time.Conversely, it seems that the company is seducing the market with new deals. The share price is definitively rising as the new agreements means that management is executing its turnaround strategy. If all goes according to plan and revenues grow, the stock price should keep rising.Be sure to check out our coverage on LCLP!We will be updating our subscribers as soon as we know more. For the latest updates on LCLP, sign up below!Image courtesy of Aili via FlickrDisclosure: We have no position in LCLP and have not been compensated for this article.

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