29 May Arch Therapeutics Inc (AAHC) – stock research report – now ARTH
Recently AAHC which is still an infant ticker has been going through some major changes including a merger agreement, change of control, name change to Arch Therapeutics, and an 11:1 forward split. Because of all of these big changes I decided to take a closer look at AAHC.
AAHC was originally set up as a Nevada business entity on September 16, 2009 with Daniel Kramer as the sole officer/director and incorporator of the shell. The original name of the company was Almah Inc. Kramer has been involved in setting up dozens of shells as a managing member of Val-U-Corp Services Inc. Shortly after being incorporated, Joey Power of Ireland took over as the sole officer/director of the shell.
Joey Power was a 34 year old auto mechanic working for Denis Henderson Car Garage in Cork City, Ireland when he was given the nominee role of CEO of Almah Inc. Cork City is the same area of Ireland that the O'Flynn family resides (GOFF and MBGI) - see this report for more details.
Joey Power was issued 4,000,000 shares of stock for $20,000.
On January 5, 2012, an S-1 was filed to take Almah Inc public.
The forward looking business plan was to distribute auto spare parts online at almahautoparts.com. To help make the business plan work, Almah Inc signed an agreement with Veleo Service Export to resell Veleo auto parts. The website (almahautoparts.com) was never made public and is long ago expired, but I was able to locate the original IP server for the site and it was no big surprise to me to find out that one of the other domains that shared the same server was kenoflynn.com.
The attorney helping with the S-1 filing was Synergy Law Group (Kristen A Baracy). Other Synergy Law tickers include AAVC, CHLL, JUHL, LCMD, PVEN, STTX, VRCV, and Zewar Jewellery Inc.
The accountant helping with the S-1 filing was Paritz and Company P.A.
The S-1 filing was made effective on March 2, 2012.
During April and May of 2012, Almah Inc sold 2,030,000 shares to a group of 29 anonymous seed shareholders for $.01/share raising $20,300.
Merger/Change of Control
Almah Inc never managed to sell even one single auto part, but since Almah Inc wasn't taken public to have a real business but rather to issue cheap shares to anonymous insiders to be sold later for huge profits this should be no surprise. By March 31, 2013, AAHC was down to just $52 cash and it was time to put the next stage of this insider enrichment scheme into motion.
On April 19, 2013, Almah Inc signed a Letter of Intent with Arch Therapeutics Inc (a Massachusetts entity). AAHC agreed to acquire all of the issued and outstanding capital stock and convertible notes and warrants of Arch Therapeutics Inc in exchange for 20,000,000 shares of AAHC common stock.
Also as part of the agreement, AAHC agreed to pay off a $250,000 Promissory Note for Arch Therapeutics Inc and to raise an additional $1,000,000 for Arch Therapeutics through the sale of AAHC stock at $.50/share to Coldstream Summit Ltd. The AAHC filings do not disclose who controls Coldstream Summit Ltd or anything about the entity. All we know is that Coldstream Summit Ltd is a foreign entity which is another red flag for a possible future paid promotion.
Coinciding with the signing of the Letter of Intent, Joe Powers resigned from all of his positions. Terrence W. Norchi, M.D. and Avtar Dhillon, M.D were appointed to the Board of Directors. Terrence W. Norchi M.D. became the new CEO, president, CFO, treasurer, and secretary for AAHC.
Terrence W. Norchi, M.D. is a board certified Internal Medicine specialist. Dr. Norchi became the President of Arch Therapeutics Inc in 2006.
Avtar Dhillon, M.D. is also the Chairman of Stevia First Corp (STVF) and a director for OncoSec Medical (ONCS). STVF was promoted by Bedford/Paragon starting on March 13, 2012. ONCS was promoted by Capital Financial Media (CFM) on March 11, 2012. Besides his roles with pump & dump penny stocks, Dr. Dhillon also sits on the Board of Directors of BC Advantage Funds, a very large Venture Capital Corporation in British Columbia
Forward Split / Name Change
On May 13, 2013 as the Merger Agreement was going through its final stages of completion, AAHC raised its authorized share count from 75,000,000 to 300,000,000 and changed the name of the entity to Arch Therapeutics Inc with the Nevada SOS.
The authorized share increase was done to make room for an 11:1 forward split which cleared yesterday, May 28, 2013.
The name change will probably be accompanied with a symbol change which is still being reviewed by FINRA.
After the 11:1 forward split the AAHC share structure looks as follows:
Authorized - 300,000,000 shares
Outstanding - 66,330,000 shares
Joey Power - 44,000,000 shares
Seed shareholders - 22,330,000 shares (free trading) - costing $.009/share.
Once the merger agreement is completed, the Arch Therapeutics Inc (Massachusetts) shareholders will have 20,000,000 shares bringing the outstanding share count up to 88,330,000 shares. Most likely we'll see Joey Power cancel most (if not all) of his shares once the merger is officially closed. We'll also see shares start getting sold to our foreign entity, Coldstream Summit Ltd.
More about Arch Therapeutics Inc
Arch Therapeutics Inc was incorporated as a Massachusetts entity on March 6, 2006 as Clear Nano Solutions Inc. The founder of the entity was Steve Kelly who was a telecommunications professional. See this article for more information. The business plan for Clear Nano Solutions Inc was to develop a biodegradable liquid containing nanoscale peptides that self-assemble into a gel over open cuts to stop bleeding within seconds. Shortly after founding Clear Nano Solutions Inc, Steve Kelly hired Dr. Terrence W Norchi M.D. to be the president of the entity.
Clear Nano Solutions Inc (nka Arch Technologies Inc) has twice filed with the SEC to do public offerings see here and here so it should be no surprise that they would eventually sign an agreement for a reverse merger to go public.
On April 7, 2008 the name of the entity was changed from Clear Nano Solutions Inc to Arch Therapeutics Inc. Since December 23, 2010, Steve Kelly has no longer been a part of the entity.
At one time through on of its earliest officers, Rutledge Ellis-Behnke, Clear Nano Solutions Inc had a patent found here related to their nanoscale peptide technology. What the current business operations of Arch Therapeutics Inc now consist of we cannot be sure until they file their balance sheet and disclosure. Arch Technologies Inc doesn't even have a current website. The website found here is under construction. The following screen shot is what the website used to look like from 2008 - 2012:
What to expect next
The merger still hasn't officially closed yet, but we'll probably see the merger close soon. We may see Joey Power cancel some (if not all) of his shares. At some point the name change to Arch Therapeutics Inc will be approve by FINRA along with a symbol change. As long as the terms don't change, AAHC will be selling shares to the anonymous foreign business entity, Coldstream Summit Ltd at $.50/share. This gives us a pretty good idea that the share price for AAHC will be trading north of $.50/share on the public market.
Archer Therapeutics Inc will bring a pretty snazzy story line/business operation to the AAHC shell, but the real story for AAHC is the involvement of the O'Flynn family with setting up the shell and the 22,330,000 free trading seed shareholder shares costing just $.009/share. This combination makes AAHC a good candidate for a future paid promotion - probably a newsletter/hard mailer type promotion. Before any major awareness starts, we'll see the AAHC website go live again.