Arrayit Corp (OTCMKTS:ARYC) Logs Another Red Session
Arrayit Corp (OTCMKTS:ARYC) suffered yet another sizable correction during yesterday’s trading. The stock opened at $0.0047 but by the time of the closing bell had dropped down to $0.00425. The loss stood at 9.5%. Compared to its price from mid-April the ticker is down by nearly 95% but at least the stock managed to bounce after hitting its current 52-week low of $0.0015 just a couple of weeks ago. But will the stock manage to keep at least some of its gains?
Well, the chart performance since then has been far from encouraging and it seems that interest in the company is also dwindling- the last four sessions have failed to surpass the monthly average volume of 42 million shares. Investors certainly have quite a few reasons to use caution when approaching the company.
The last official PR issued by ARYC is almost two months old. That, however, doesn’t mean the company has been keeping investors entirely in the dark. No, instead of publishing official press releases ARYC decided to turn to the social media platforms for its messages. And they have been quite active putting multiple Twitter and Facebook posts almost daily. Not to mention that the posts have been rather impressive – ARYC announced that their online store surpassed $50 million in all-time sales while on June 30 the company registered $52 thousand sales in a single day.
The problem is that despite the positive social media posts the official filings of the company show quite a different picture. The latest financial report filed by ARYC covers the first quarter of 2015 and according to it at the end of March the company had:
• $59 thousand cash
• $723 thousand current assets
• $8 million current liabilities
• $787 thousand revenues
• $1.4 million net loss
In order to fund its operations the company has taken on a significant amount of convertible debt and some of the most notorious toxic funders have become involved – JMJ Financial, KBM Worldwide, Tangiers, Typenex Co-Investment LTD. In one of our previous articles we informed you that Mr. John M. Fife, the person controlling Typenex, was a defendant in a SEC complaint alleging a “fraudulent scheme to purchase variable annuity contracts” and engaging in “market timing”. Mr. Fife had to pay a disgorgement $234 thousand alongside Clarion Management and additional $234 thousand as a civil penalty.
The dilution of the common stock that could have taken place as a result of the multiple convertible notes may be massive. As of May 29 ARYC had 64.3 million outstanding shares but if the volume of 232 million registered during the June 18 trading session is any indication the O/S may have increased by nearly 4 times by now.
So, in conclusion, let us ask you this question – How willing are you to put your money in a company that uses social media instead of official PRs, may have issued millions of discounted shares as a conversion of debt and whose financials are not exactly confidence-inspiring?
