Share price of Arrayit Corp (OTCMKTS:ARYC) have been creeping up silently for the last two years. From trading close to $0.001 in 2016, the shares are being exchanged right now for around $0.01 a share. How can we explain the share price move? That is the interesting thing. The company has not provided any news this year. So, little is known about its operations. Additionally, its relations with the OTC Exchange are not the best. In this article, we will provide information about what can be going on here, and why market participants may be making money. Have a look at the share price action.SourceBusinessArrayit Corporation was founded in 1996. Its business is described in its corporate documents with the following terms:Source
"Arrayit is a leading edge developer, manufacturer and marketer of next-generation life science tools and integrated systems for the large scale analysis of genetic variation, biological function and diagnostics. Using Arrayit’s proprietary and patented technologies, the Company provides a comprehensive line of products and services that currently serve the sequencing, genotyping, gene expression and protein analysis markets, and the Company expects to enter the market for manufacturing molecular diagnostics." Source
Several subsidiaries form part of the group. This is a table found in the last 10-Q released. The activity run by each subsidiary is noted as well:
Subsidiary
Date of Incorporation
Business of Entity
Ownership
TeleChem International, Inc.
November 1, 1993
Import, export, manufacturing and distribution of wholesale industrial chemicals
100% owned by Arrayit Corporation
Arrayit Marketing Inc.
September 3, 2008
Inactive
100% owned by Arrayit Corporation
Arrayit Scientific Solutions, Inc.
October 15,
2009
Markets a test for Parkinson’s Disease incorporating the technology and equipment developed by Arrayit Corporation
98% owned by Arrayit Corporation and 2% owned by the former President of Arrayit Scientific Solutions, Inc.
Avant Diagnositics,
Inc.
June 2, 2009
Markets a test for Ovarian Cancer incorporating the technology and equipment developed by Arrayit Corporation
41.0% owned by Arrayit Corporation at September 30, 2015.
SourceWhy is the share price in an upward trend? - Just check the revenuesWe agree with the vision that other market participants published on the iHub forum: "the best way to explain the upward trend is by looking at the revenues of ARYC". Check the most recent reported revenues:
For the Three Months Ended
For the Three Months Ended
For the Nine Months Ended
For the Nine Months Ended
September 30, 2015
September 30, 2014
September 30, 2015
September 30, 2014
Total revenues
$615,151$492,655$1,975,550$3,532,554
Cost of sales
244,105283,591890,4591,264,343
Gross margin
371,046209,0641,085,0912,268,211SourceThese financial figures were reported long time ago, but we believe that they are still valid to measure the ability of ARYC to generate revenues. Even if the company does not obtain positive net income, the market participants appreciate revenues.Market participants celebrated the auditor's opinionOn December 5, 2016, the company noted that the new auditor, Rosenberg Rich Berman Baker & Company, reviewed the company's previous financial statements and said that everything was correct:
"Moss Krusick issued an audit report on the Company’s financial statements as of and for the years ended December 31, 2013 and December 31, 2014. The audit report did not contain an adverse opinion or a disclaimer of opinion, nor was either such report qualified or modified as to uncertainty, audit scope, or accounting principles, except that such report raised substantial doubts on our ability to continue as a going concern. During our two most recent fiscal years and the subsequent interim period preceding the resignation of Moss Krusick we had no disagreements with the firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope of procedure which disagreement if not resolved to the satisfaction of Moss Krusick would have caused it to make reference to the subject matter of the disagreement in connection with its report." Source
In our opinion, the market should have been looking at this fact. The previous auditor resigned on August 12, 2016, giving short sellers a good reason to say that the company was not fully reporting all the financial information.Buyer Beware and ConclusionWe need to note in this case that the OTC Markets Exchange warned investors about ARYC. The caveat emptor sign has been placed on the company's website. What does it mean in this case? In our opinion, the company is not releasing, at the due time, the quarterly and annual reports, and the exchange was forced to do it.SourceTo sum up, ARYC commenced an upward trend in the beginning of 2017 and we wanted to know the reasons behind it. We found out that the revenues of the company are large. Additionally, the new auditor of the firm said that the previous reported financials were correct. Conversely, the OTC Markets Exchange did not appreciate that the company is not releasing its financial statements on time and placed the caveat emptor symbol on the company's profile. We believe that the company is working on its latest financials and it's only a matter of time before the company is current on its reporting. It looks like some smart money has been building a position in the market banking on this fact.We will be updating our subscribers as soon as we know more. For the latest updates on ARYC, sign up below!Image courtesy of Brian Chan via FlickrDisclosure: We have no position in ARYC and have not been compensated for this article.
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