The business of AREM is in an unfavorable situation:
- Most of its assets are intangible and the worth of the tangible ones continues to decline
- Liabilities have decrease over the recent year, but still top the tangible assets
- One year stock dilution reached 88% from September 2009 to 2010
- General and administrative expenses are eating away any profits
- Increasing losses are covered through various types of financing
The stock price currently places the market cap at $6.5 million, which is unreasonably high. Considering there were no updates to trigger the price rally, there is a very good chance that this stock will collapse in the near future.
Historically, the share price has always returned to 20 cents, and this will most likely be the case this time as well.