MassRoots Inc. (OTCMKTS:MSRT)
MassRoots Inc. (OTCMKTS:MSRT) shares gained 18.08% as investors awaited the company’s financial results for the three months ended September 30, 2017. Financial results posted after market closed indicate that the company could be struggling as took a big hit in the recent quarter.
The leading technology platform provider for the legal cannabis business says it generated revenue of $11,516 in the recent quarter, representing a decrease of $197,487 or 94% from last year’s levels. All revenues generated in the quarter is made up of revenue related to the MassRoots Network.
Operating expenses for the three months more than doubled to $7.5 million from $2.1 million reported last year. MassRoots Inc. (OTCMKTS:MSRT) attributes the increase to stock-based compensation in the quarter.
It awaits to be seen how investors will react to the disappointing financial results given that it comes at a time when the company is facing a string of challenges. Last month, the company fired its Chief Executive Officer, Isaac Dietrich, and replaced him with Scott Kveton.
The firing of Dietrich was triggered by the fact that MassRoots Inc. (OTCMKTS:MSRT) was burning cash at a higher rate even as revenues continued to drop. The executive had also lost the support of the board after trying to transform the company from its roots as the ‘Facebook’ of cannabis, to a compliance and cannabis tech company.
MassRoots Inc. (OTCMKTS:MSRT) sentiments on Wall Street have turned from bad to worse this year. The stock has shed more than 80% in market value as short sellers continue to push it lower.
The board also seems to agree that the company is in a dire position thus the decision to initiate leadership changes last month. The company’s future hangs in the balance as attention shifts to the interim CEO Scot Kveton.
“In this regard, we have asked our interim CEO Scott Kveton to refocus efforts with the plans he has put into motion for a direct-to-consumer & B2B play by leveraging our installed base of users and recent acquisitions,” said board member Vincent Keber.
Kveton faces an uphill task to ensure smooth integration of some of the acquisitions that his predecessor made. The acquisitions have the potential to expand MassRoots Inc. (OTCMKTS:MSRT) software offerings. One of the companies is Whaxy, a white labeled ordering software that provides end-to-end transactional automation for cannabis businesses.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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