Arrayit Corp (OTCMKTS:ARYC) Crashes
A surge from $0.0017 to $0.0077 in just two days for a total gain of over 350%, that is what the stock of Arrayit Corp (OTCMKTS:ARYC) did last Wednesday and Thursday. The sudden reversal was truly impressive but we warned you to be extremely careful when dealing with the ticker. And indeed, on Friday ARYC were unable to keep the momentum going and crashed back down by nearly 18% closing the week at $0.0062.
Still, there are plenty of posts on social media platforms and investor message boards that are trying to hype up the company. All it takes, however, is one look at the chart of the stock to see just how dangerous ARYC is. Last Tuesday the company hit a new 52-week low of $0.0015 and although it is now sitting at $0.0062 compared to the $0.12 from the start of the year ARYC are more than 94% down.
In addition, the financials of the company fail to inspire much confidence, either. At the end of the first quarter of 2015 Arrayit had:
• cash: $59 thousand
• current assets: $723 thousand
• current liabilities: $8 million
• quarterly revenues: $787 thousand
• quarterly net loss: $1.4 million
Unfortunately the decline in revenues of 28% compared to the same period in 2014, the massive working capital deficit of $7.1 million and the accumulated deficit of close to $30 million are not the only red flags around the company. No, investors must also be wary of the dilution of the common stock.
As of March 31 ARYC had $1.2 million in notes payable, around $470 thousand of which can be turned into common shares at a 30% to 40% discount. Even if you have limited experience with pennystocks you should recognize at least a couple of the owners of these notes – JMJ Financial, Tangiers, KBM Worldwide, as some of the most notorious toxic funders.
On May 11 ARYC issued 5.8 million shares as a conversion of $39 thousand in debt. These shares had an average price of $0.0069 while the stock of the company closed at $0.014 on that day. As of May 29 the number of outstanding shares had reached 64.3 million. Just three weeks later, on Thursday, Arrayit registered a daily volume of more than 232 million traded shares. Although it is entirely possible for the daily volume to surpass the outstanding shares how likely it is for it to be nearly four times higher? A far more plausible explanation is that even more conversions have taken place and millions of underpriced shares have been issued.
With the last PR published by the company now more than a month old, lackluster financials, and millions of discounted shares that could be unleashed on the open market any trades involving ARYC’s stock must be attempted only after extensive due diligence.
