Medican Enterprises Inc (OTCMKTS:MDCN) Sinks Like A Stone
Since mid-April the performance of Medican Enterprises Inc (OTCMKTS:MDCN) was already quite disappointing but lately it has become nothing short of a total disaster. The ticker has not been able to register a single green session for the past nine sessions. After wiping another 18% of its value during Friday’s trading currently MDCN’s share price sits at $0.0018, on the verge of the triple-zero price ranges.
Recently the company announced some positive events – at the start of May MDCN completed the acquisition of the branding company TWYNS while on May 26 they closed a lease agreement with Breeding Rare Cannabis Original Genetics Inc. (BRCOG). The TWYNS deal is expected to bring around $400 thousand annually while BRCOG will lease the indoor warehouse, outdoor greenhouse and R&D property for $9000 per month. Unfortunately this will barely improve the depressing financial state of the company.
The quarterly report filed less than two weeks ago revealed that at the end of March MDCN had:
• $9298 cash!!!
• $73 648 total current assets
• $9.7 million total current liabilities
• ZERO revenues
• 5.7 million loss from operations
• $108,6 million net loss
With this in mind it shouldn’t be that surprising that the two PRs had absolutely no effect on the ticker’s performance as it continues to slide deeper down the chart. The problem is that now only is MDCN losing more and more of its value but the crashes are taking place on ever increasing volumes. On Friday the unprecedented amount of 170 million shares got traded.
That numbers is incredibly important because as of May 20 Medican reported 134 million outstanding shares. Although it is certainly possible for the daily volume to surpass the outstanding shares of the company a far more likely explanation is that MDCN are continuing to dilute their common stock. The rampant issuance of shares already forced MDCN to implement a 1-for-10 reverse split on April 20 that left them with around 50 million outstanding shares. If Friday’s volume is any indication the outstanding shares have increased by more than 3 times in less than a month.
Medican were supposed to close one of the two Phoenix, Az, acquisitions by the end of May so we will see if this week a PR talking about it will be issued. If after so many delays, which we covered in our previous articles, MDCN are finally able to finish the acquisition it could prove to be enough to at least stop their stock from entering the triple zeros. If the deal is postponed once more though the chart could become a whole lot uglier.
