MassRoots Inc (OTCMKTS:MSRT) continues to search for support, with several recent key news items playing into the narrative. MSRT stock has been an overall disappointment in terms of its staying power following the big rip in cannabis related stocks late last year. Can it get back on the horse? Let’s have a closer look.
First off, the company was recently notified by OTCmarkets.com that there were promotional activities on shares of the stock. The company promptly denied that it had any knowledge of that activity. That response and notification obviously colors perception of the stock because it suggests that current prices may be too high in that they were achieved by active promotion. However, at the same time, the company also announced this week that it has executed a Definitive Agreement to acquire Odava for cash and shares of MassRoots’ common stock. We will look at this deal in detail below. But first, for those not familiar with the name, here’s a quick 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, with weak price action, accusations of promotional activity for shares, and a context that has been anything but accommodating for stocks in the cannabis space over the past month or two, MRST recently executed an agreement to gobble up a leading platform technology company named Odava.
The new addition provides compliance, point-of-sale, and supply chain management for the cannabis industry. According to the release, the closing of the acquisition is subject to certain closing conditions: “The closing of the Merger is also subject to various conditions, including, but not limited to, (a) the Company’s employment of Scott Kveton and Steven Osborn and (b) receipt of a joinder agreement from all of the stockholders of Odava, pursuant to which each stockholder will become a party to the Merger Agreement and provide representations and warranties to the Company and Merger subsidiary. The Board of Directors of MassRoots have approved the Merger Agreement, the Merger and the other transactions contemplated thereby.”
“This acquisition expands MassRoots’ offerings to dispensaries to include point-of-sale and regulatory compliance software, consolidating the most important operations for cannabis businesses into one central platform,” stated MassRoots CEO Mr. Isaac Dietrich. “We expect with MassRoots’ resources and relationships, we can grow the number of dispensaries utilizing Odava from dozens to hundreds by early next year. In the near future, we believe a significant percentage of all transactions occurring in the regulated cannabis industry will occur on our platform.”
Earning a current market cap value of $52.7M, MassRoots Inc has a reported stash ($2.2M) of cash on the books, which is balanced by 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 developments transpire. For continuing coverage on shares of $MSRT stock, as well as our other breakout stock picks, sign up for our free newsletter today and get our next hot stock pick!