Arch Therapeutics Inc (OTCBB:ARTH) Soars to New 52-Week Highs
During yesterday’s trading the stock of Arch Therapeutics Inc (OTCBB:ARTH) simply exploded and from an opening price of $0.29 it closed the session at $0.36 per share, which was not only the intraday high but also a new 52-week record. The gains for the day stood at exactly 20%. Equally as impressive was the enthusiasm shown by investors – the number of traded shares surpassed 3.6 million. The last time ARTH registered such daily volumes was two years ago in mid-2013.
There is no immediate reason that could explain the sudden surge up the chart but more than likely investors are rushing towards the company in anticipation of the launch of the human clinical trial for the AC5 Surgical Hemostatic Device. According to the company’s plan the human trial is expected to be initiated in the third quarter of the year.
In the latest financial report ARTH stated that pursuing regulatory approval in the U.S. and Europe will require between $12 million and $17 million, funds that the company lacked. For the first quarter of 2015 ARTH reported:
• $573 thousand cash
• $606 thousand total current assets
• $1.39 million total current liabilities
• ZERO revenues
• $833 thousand net loss
At the start of July, however, the balance sheet received a massive boost when ARTH announced that approximately $3.16 million had been raised through a private placement of units. The newly acquired capital is going to be used for the upcoming clinical trials.
Despite the fact that now the company had sufficient resources to move forward with its plans initially investors were far from thrilled by the terms of the financing deal. The units that were sold were priced at $0.22 each and consisted of 1 common share and 1 Series D warrant for the purchase of 1 share with an exercise price of $0.25. As a result of the placement the outstanding shares increased by nearly 20% – from 78 million to 92.47 million.
Although Arch Therapeutics definitely lacks some of the more glaring problems associated with pennystocks their stock should still be approached only after doing your own due diligence.
