Until not more than a couple of weeks ago, Arch Therapeutics Inc (OTCBB:ARTH) went under the name of Almah, Inc. The company was based in Ireland and their intention was to sale automobile parts through a website that never got developed. Then a merger took place, the name and ticker symbol were changed and active trading began.
Unlike their predecessors, ARTH managed to develop a website in record time and, since all the official filings discuss the auto parts business and the PR department seems to be sitting idle, the Internet portal is the only place where you can find some information about them. So, what do we have?
Well, lots of things, actually. ARTH managed to compile a video in which they explain all about their operations and the flagship product that they are developing at the moment. It’s called AC5 and as far as we can work out, it’s some sort of a polymer-based substance that will supposedly minimize bleeding during invasive surgical procedures. They say that the product could potentially reduce the risks for the person undergoing the operation and, typically for this sort of corporate videos, a large amount of words like “innovative”, “game-changing” and “revolutionary” is applied.
That’s all well and good, however, there is one small problem – ARTH‘s product is not ready yet. The video and the website state that the preclinical testing has gone superb but unfortunately, they don’t give us any details on when the rest of the trials will commence and the fact that we’ll need to wait for the next report to see exactly what ARTH have in terms of financials make predicting the future nigh on impossible.
Yet the stock seems to be moving and while we haven’t seen a surge similar to the one Biozoom Inc (OTCBB:BIZM) showed us during the last couple of weeks, they did still manage to gain around 55% since the ticker was changed. Then again, there is a rather big promotional campaign running for BIZM at the moment while we have yet to intercept even a single email about ARTH. How long will that last, though?
While we can’t be 100% certain, we are inclined to believe that the excitement around ARTH is fueled by the names that took over the company when the merger was completed. Both the website and the 8-K filings describing the acquisition have given us the details on the people who currently steer ARTH and we must say that their biographies do sound somewhat impressive for a company that just started trading.
The CEO and President is called Terrence Norchi, and while he is an MD he will probably take care of the business side of things since he has a lot of experience as equity analyst and he has worked for quite some time at mutual funds which will surely help him run the company.
The person who will most probably focus on the development of ARTH‘s ground-breaking product, though, is the Chairman of the Board, Mr. Avtar Dhillon. He was once at the helm of a company called Inovio Pharmaceuticals Inc (NYSEMKT:INO) and when we looked through INO‘s filings, we can see that while they’re still a small cap venture, they’ve managed to generate $1.5 million in revenues during Q1 of 2013, which is quite respectable. But what about OTC companies?
Well, apart from working at ARTH, Mr. Dhillon is also the Chairman of the Board of two other ventures traded on the Over-the-Counter boards – Stevia First Corp (OTCMKTS:STVF) and OncoSec Medical Inc (OTCMKTS:ONCS). We checked our database, had a quick look at their charts and we can see that both companies received some extensive promotional coverage as soon as the active trading of their shares started.
STVF began to draw the attention of the investors back in February 2012. A month later the pumpers stepped in and pushed the price to more than $3, but as soon as they left, the ticker plummeted and right now they stand at around $0.38 with no revenues generated since inception. The story of ONCS is pretty much the same and that somewhat raises the chances of ARTH receiving some promotional coverage in the weeks or months to come.
If that happens, the price will most likely suffer, but even if ARTH manage to stay away from the paid pumps, the number of unknowns around their product, its launch date and its success are far too many, which is why considering the potential losses is a good call before you make your final investment decision.