Denver-based MassRoots’ future remains in doubt, according to its latest financial filings, which reveal continued multimillion-dollar losses, massively shrinking sales and insufficient cash to operate for the next year.
The Denver-based marijuana tech firm continued to flounder in the red during the first six months of the year, posting a net loss of $8.4 million on just $3,700 in revenue, according unaudited financials filed with the U.S. Securities Exchange Commission late Monday.
That compares to a year-ago loss of $19 million on revenue of $277,600 for the same period, according the filing.
The grim financials “raise substantial doubt about the company’s ability to continue as a going concern,” the company noted. It has been burning through cash – and will need to raise additional cash if it plans to continue operating.
Put another way: “The company does not have cash sufficient to fund operations for the next fiscal year,” MassRoots stated in the filing. The company has warned of funding concerns in prior filings, but cash on hand continues to decline.
Company officials could not immediately be reached for comment.
Here’s a quick rundown of the high and low lights:
- MassRoots had just $15,950 in cash on hand at the end of June, compared to $31,250 in the year ago period.
- The company has a more than $2.8 million capital deficit and spent $4.4 million on operating activities during the first six months of the year – of which nearly $3.2 million can be attributed to stock-based compensation handed out during that time frame.
- The company has reported net losses and negative cash flows since its launch “and expects these conditions to continue for the foreseeable future,” the firm stated in the filing. MassRoots reported a more than $44 million loss in 2017 – half of which was tied to $22 million in stock-based compensation the company gave out during the year.
- Since the company’s inception, the only source of operating funds has been cash proceeds from private placements of common stock, proceeds from the exercise of warrants and options and issuance of notes payable.
Monday’s financial filing was due to be submitted to regulators earlier this month, but MassRoots missed the deadline because of “ineffective” controls, the company said.
MassRoots “did not have an adequate process established to ensure appropriate levels of review of accounting and financial reporting matters,” the firm stated in the filing.
Additionally, the filing offered limited financial details on the company’s latest endeavor, MassRoots Blockchain Technologies. MassRoots invested $250,000 to develop the blockchain technology, which is basically a decentralized digital ledger of transactions.
The blockchain funds are part of roughly $943,000 received from 10 investors.
Marijuana Business Daily will continue to update this story.
Shares of MassRoots (OTC: MSRT) closed at 10 cents Monday, nearly unchanged from its closing price on Friday.
Lisa Bernard-Kuhn may be reached at [email protected]
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