Therapy Cells Inc (OTCMKTS:TCEL) Turns Nasty

There probably weren’t many people that woke up on Wednesday and thought: “I know what I’ll do today. I’ll invest in Therapy Cells Inc (OTCMKTS:TCEL)!”. The ticker had spent quite a few months registering next to no volumes and it had been showing no signs of moving up.

Then, however, about half an hour before the start of Wednesday’s session, a press release came out which completely changed investors’ attitude towards TCEL. It was missing the vital “Forward-looking statements” disclaimer, but apparently, that wasn’t seen as too much of a problem by the majority of people. In a matter of just six and a half hours, they poured as much as $382 thousand into the stock which is a truly remarkable achievement for a triple-zero ticker. TCEL opened the day with a gap up and after several intraday spikes, it stopped at $0.0008 per share (about 33% in the green).

Many of the people who decided to put their money on the line ignored some rather massive red flags surrounding the company. The corporate headquarters, for example, appears to be located in a residential house in sunny Florida and it also serves as the location of the principal offices of another OTC enterprise called Flameret, Inc. (OTCMKTS:FLRE). Not surprisingly, the people who are at TCEL‘s helm are also responsible for FLRE‘s business.

The multitasking means that they are having problems keeping up with TCEL‘s reporting schedule. The latest financial statement they filed covers the first quarter of this year which means that the company profile is now stamped with a Limited Information sign. To top it all off, the most recent figures are quite ugly:

  • cash: $246
  • current assets: $50,701
  • current liabilities: $918,274
  • NO revenue
  • quarterly net loss: $6,856

So, only a few minutes worth of superficial research reveals quite a lot of problems. The deeper you look, however, the uglier things get. If you’re patient enough to do the math, you’ll see that about 1.6 billion of the 1.7 billion shares that were issued and outstanding at the end of March saw the light of day as a conversion of debt at an average rate of as-near-as-makes-no-difference $0.0001 per share.

In light of all these huge issues, we’re struggling to see who would think that investing in TCEL is even a remotely good idea. Yet, the press release from Wednesday told us that there are such people. Not only that, it told us that Paris-based venture capital firm Sofinnova Partners has agreed to pour no less than $5.7 million into TCEL. The money, the PR said, was supposed to help the company continue with its all-important trials.

This looked like good news and investors were pretty happy about it. That’s understandable. If a strong venture capital firm like Sofinnova Partners is ready to invest in TCEL, then why wouldn’t you be?

As it turns out, however, Sofinnova isn’t ready to invest in TCEL. In fact, the people behind Sofinnova probably haven’t heard of TCEL at all. Yesterday, the management team said in a statement that Wednesday’s press release didn’t come out of the company headquarters. They informed us that they have no idea who published it and they also said that everything written in it is nothing more than a big, fat lie.

Investors’ reaction was instantaneous. TCEL wiped out half of its value and it stopped at $0.0004 per share.

So, what can the people who got burned learn from this? They should now know that no matter how good the news, the red flags should never be ignored. They should also know that repeating an age old saying before putting any money into a penny stock is definitely worth it. The saying goes like this: “If something sounds too good to be true, it probably is”.

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