MassRoots Inc (OTCMKTS:MSRT) Is in No Hurry

It all started with a crazy idea. Isaac Dietrich and a few other people were smoking weed in his friend’s apartment when he suddenly realized that while sharing pictures of cupcakes and other tasty treats through the social networks is trendy, nobody’s really that eager to explain to the whole world that he or she is about to get stoned. He decided that what we need is an Instagram for pot heads. Thus, MassRoots Inc (OTCMKTS:MSRT) was born.

The company itself was founded in April 2013 and the social network was launched a few months later. Last year, Mr. Dietrich decided to take his brainchild public. A registration statement was filed twelve months ago and in April 2015, MSRT logged its first active sessions on the OTC Markets.

Though the “Instagram for cannabis lovers” claim does seem a bit bombastic, especially when it’s uttered by a penny stock company, it must be said that MSRT appears to be gaining more and more traction with marijuana enthusiasts. The company profiles on the conventional social networks have hundreds of thousands of followers and according to the press releases, MSRT‘s own userbase has more than doubled since the beginning of the year.

In fact, they reckon that the recent growth will enable the stock to survive the rigors of being traded on one of the national exchanges. On Monday, MSRT‘s management team announced that an application for listing on NASDAQ has already been filed.

The press release itself said that there can be no guarantees around the approval of the application, but despite this, the news caused quite a stir. Media outlets like Yahoo! Finance (who rarely pay much attention to penny stocks) covered the company and its prospects, so it’s fair to say that there’s no shortage of exposure.

In light of this, MSRT‘s performance is a bit strange. Sure, the ticker did gain about 13% on the day of the announcement, but since then, it has only gone up by about 4%. It closed yesterday’s session at $1.39 and it also logged a dollar volume of around $170 thousand which, in light of the big news, is not that impressive. So, what’s holding it back?

Well, the financial statement isn’t exactly perfect. In fact, to say that it doesn’t belong to a NASDAQ company would be a gross understatement. Here’s a summary of the figures logged at the end of the second quarter:

  • cash: $171,363
  • current assets: $1,151,358
  • current liabilities: $481,726
  • quarterly revenues: $2,126
  • quarterly net loss: $1,517,297

As you can see, things were not looking good two months ago. Nevertheless, Mr. Dietrich is saying that MSRT‘s fortunes have changed dramatically since then. In fact, he’s saying that the company is now able to generate tens of thousands of dollars in revenues in mere days. Apparently, however, investors don’t believe him. Either that, or the rather huge amount of discounted stock that MSRT issued a few months ago is not letting the ticker run free.

As we mentioned a couple of days ago, quite a lot of shares were sold during the first half of the year at prices ranging from $0.50 to $0.75. Some warrants were also exercised at as little as $0.001 and 600 thousand shares were issued at $0.10 as a conversion of a debenture dated March 24, 2014. On June 30, $209 thousand of the principal amount under the same debenture was still outstanding.

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