MassRoots Inc (OTCMKTS:MSRT) is a interesting penny player in the technology and social media wing of the cannabis patch. The stock has been suffering badly in recent trade, with the pressure mounting upon its recent release of financial results for its quarter ended March 31, 2017. The company’s management recently issued an update that has done little to staunch the flow of blood.
Overall, the company brought in $130k on the top line, which is actually down from its results for the quarter ended September 30, 2016 ($210k), which was also actually, itself, down from those of the quarter ended June 30, 2016 ($490k). Sales were also down on a y/y basis. So, the task that management faces in its messaging project is a steep and difficult one: as the marijuana space has grown, MSRT revenues have declined. We will look at how management has angled against this in a minute. But first, for those who aren’t familiar with this company, here is a more general overview.
MassRoots Inc (OTCMKTS:MSRT) operates a technology platform for the cannabis community in the United States. The company’s mobile network enables users to share cannabis content to connect with the legalization movement. Its network is accessible as a free mobile application through the iOS App Store and the Google Play marketplace and as a Website at massroots.com.
The company also operates MassRoots.com/shop, an e-commerce platform that allows visitors to order MassRoots Inc T-shirts, jars, and stickers; and MassRoots for Business, a free online portal for dispensaries to schedule posts, view analytics, and gain insights into followers. MassRoots, Inc. was founded in 2013 and is headquartered in Denver, Colorado.
MSRT is one of the largest and most active technology platforms for cannabis consumers, businesses, and activists with over 1M registered users.
According to company materials, “MassRoots is one of the largest technology platforms for the regulated cannabis industry. The company’s mobile apps enable consumers to provide community-driven reviews of cannabis strains and products, enabling consumers to make educated cannabis purchasing decisions. MassRoots is proud to be affiliated with the leading businesses and organizations in the cannabis industry, including the ArcView Group and National Cannabis Industry Association.”
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As noted above, the most important data point from the company’s recent financial results filing – revenues – was not a great number. In the company’s subsequent shareholder notes, MSRT management focused on other factors, such as balance sheet improvement, cash flows, user growth, and convertible debt retirement.
According to the release, “during the first quarter of 2017, the Company achieved cash-flow positive status, with a net cash inflow of $1.8M, and retired all outstanding convertible debt. Additionally, the exercise of warrants resulted in a significant reduction in the Company’s derivative liabilities. MassRoots also formed a strategic relationship through an investment in the cannabis media powerhouse, High Times…Apart from improvements to its financial position, MassRoots crossed one million registered users in March 2017, making it one of the largest online communities of cannabis enthusiasts. Shortly after reaching this milestone, the Company announced the launch of its celebrity influencer program to help accelerate MassRoots’ user-growth towards 2 million users and formed a strategic partnership with Whoopi & Maya, co-founded by the legendary Whoopi Goldberg.”
“We’re pleased with the significant improvement in the Company’s fundamentals we experienced during the first quarter,” stated MassRoots CEO Mr. Isaac Dietrich. “Our core objective for the balance of the year is continuing to better monetize our user-base and deliver more value to our clients.”
We’ve witnessed a bit more than -30% shaved off share prices over just the past week of action. Moreover, the name has seen an influx in interest of late, with the stock’s recent average trading volume running 50% beyond what we have been seeing over the larger time frame.
Earning a current market cap value of $40.7M, MSRT has a chunk ($2.2M) of cash on the books, which stands against virtually no total current liabilities. MSRT is pulling in trailing 12-month revenues of $929K. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -10.2%. We will update the story again soon as further details emerge. For continuing coverage on shares of $MSRT stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
