Arch Therapeutics Inc (OTCBB:ARTH) Is Not Completely Forgotten
On Friday, Arch Therapeutics Inc (OTCBB:ARTH) popped up on the list of the most heavily traded penny stocks for the first time in a very long time. More than 1.8 million shares changed hands in a matter of six and a half hours which means that when the closing bell rang, the dollar volume stood at more than $440 thousand. At the same time, the ticker hit a five-month high of just under $0.27 and closed the first session of the month with a price of $0.23 (13% above its previous value).
Back in the summer of 2013, ARTH was making similar moves up the chart. The volumes were even more impressive and the price was hovering around the $1.30 per share mark. Sadly, at one point, it all came down in a cloud of broken dreams and disappointed investors. In July 2013, ARTH logged seven consecutive red sessions and obliterated around 65% of its value. Afterwards, the volumes disappeared and the stock continued drifting towards the bottom.
If you’re new to ARTH, you’re probably wondering about the reasons behind the truly horrifying historical performance, and you’re probably eager to find out if it can stand its ground this time around.
Well, if you tend to listen to various people around the internet, you’re probably quite optimistic. There’s no shortage of users around the discussion boards who are saying that ARTH will be traded at more than $1 per share before the end of the year. The thing is, people have been optimistic about the stock’s future in the past and things haven’t really worked out.
The 2013 run was caused by a rather massive paid promotion. There were landing pages, hard mailer brochures, and quite a lot of emails. Back then, a certain Ian Cooper was saying that the ticker could be pushed “into the $3.00 to $5.00 range this year”, but it’s quite clear that he was catastrophically wrong.
And while it’s pretty easy to pinpoint the reason for the massive spike from a couple of years ago, things are a little bit different with the current run.
Thankfully, ARTH is not promoted at the moment, but there doesn’t seem to be anything else pushing it in the right direction, either. The latest press release, for example, is now nearly three weeks old and it must be said that it sounds rather optimistic. It says that according to an “independent third party”, ARTH‘s AC5 hemostatic device is performing much better than some of its commercially available rivals. Despite this, the news had absolutely no effect on the stock whatsoever.
ARTH seems to be running simply because people are expecting some even more positive PR’s coming out of the company headquarters. This means that it’s running on rumors and speculation and you should be able to decide for yourself whether that’s a good enough reason to put your money on the line.
Make sure you check out the latest 10-Q before reaching your final decision, though. It covers the three months ended December 31, 2014 and it looks like this:
- cash: $782,675
- current assets: $824,441
- current liabilities: $994,972
- NO revenue since inception
- quarterly operating loss: $1,270,090
Some of you will probably say that, by the low standards set by OTC development stage companies, ARTH isn’t in too bad a shape. Indeed, the cash reserves aren’t too horrific and the debt is still just about manageable.
The thing is, the management team said in the report that they will need “at least $13,000,000 to $18,000,000 in additional capital” in order to obtain the necessary approvals from the US and European regulatory organs. This is a colossal amount of money and the more experienced among you probably know that raising it could be a tall order for a small penny stock company like ARTH.
