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Life Clips Inc (OTCMKTS:LCLP) Remains A Bad Bet

Written by

Jarrod Wesson

Published on

June 6, 2017

We warned about Life Clips Inc (OTCMKTS:LCLP) stock promotion activities in "Life clips looking for bagholders" and in "Life clips heading lower". We said that the company's financial situation confirmed what the downward trend was indicating. That this was a sinking boat. Of course, were right about it. Have a look a the long term performance and note that we initiated coverage in July 2016.SourceThat is not all; the stock dilution risk caused by the convertible debt and the conversion price included in the convertible debt contracts were not beneficial. This is from one of our articles:

"The conversion price is the amount equal to 50% of the lowest intraday trading price of the Company’s common stock during the 20-trading-day period prior the conversion date. The number of shares of common stock issuable is determined by dividing the amount to be converted by the conversion price." Source

In this article, we will assess the new information released by the company, like before from a skeptical point of view.Recent DevelopmentsIf the market knows that you are liquidating the business and at the same time promoting the shares, then the amount of distribution agreements and purchase orders that you put out do not matter. Here is the list of such agreements and orders:

How do we know where the company is heading to? By what executives in the firm do. On January 25, 2017, after a long period of press releases announcing astonishing agreements, the CEO "surprisingly" decided to resign. Additionally, the company did not note the hiring of another interim CEO, which may mean that it was the CEO who left the company and did not give time to look for another person to occupy his post.

"On January 12, 2017, Wayne Thomas submitted his resignation from the Campany’s Board of Directors. The resignation was not the result of any disagreements with the Company. " Source

This is not all. Our thesis was confirmed later in the year. On March 29, 2017, more resignations were noted:

on January 12, 2017, both Mr. Gruder and Wayne Thomas resigned from the Company’s Board of Directors
on January 25, 2017, Robert Finigan resigned from his position of President of the Company.
Stuart Posner resigned from his position as a Director on February 1, 2017.

Is this not enough to show that the company is in dangerous position? Everybody seems to be trying to leave the boat. It does not matter whether the company keeps sending good messages to the market to try to create a turnaround. Experienced professionals decided to leave the firm without a clear explanation and the company did not communicate well the new strategy.Additionally, the fact that the CEO, Robert Gruder, returned 27.6 million shares to the company and did not receive any money for the company is quite a bad message.

"Life Clips, Inc. (LCLP) is pleased to announce 27,617,226 shares of its common stock has been returned and cancelled by the transfer agent. The shares were returned by Robert Gruder who resigned as the Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer of the Company on January 12, 2017. As of Friday, April 7, 2017, Life Clips, Inc. had 79,370,345 shares outstanding." Source

The following press releases were put out after the CEO, the President, the CFO and some other directors resigned. In our opinion, the fact that the management is running for the exits diminishes their value:

Obviously, the share price did not increase after they were put out. Market participants know that they need to beware.Stock PromotionOn the top of it, there is another very bad factor to point out in Life Clips. It was noted in our previous pieces and all around the Internet that the company shares were touted.ConclusionIn our opinion, the stock promotion along with the resignation of almost the whole management team destroyed any trust in the company. There seems to be a large disconnection between what the company communicates and the share price. The press releases put out disclose many new agreements, new financing, and acquisitions, which should be making the stock react positively. The fact that the shares are not means that market participants do not care any more about the new developments. To sum, like last year, buyer beware! We will be updating our subscribers as soon as we know more. For the latest updates on LCLP, sign up below!Disclosure: We have no position in LCLP and have not been compensated for this article.