Cannasys Inc. (OTCMKTS:MJTK) Bounces From The Penny Mark
Cannasys Inc. (OTCMKTS:MJTK) managed to climb 22.00% yesterday and was once more trading above the penny mark by the time the last bell sounded – but will it manage to retain its gains?
One look at the company’s profile page reveals that there is something very odd going on with MJTK. How can an OTC Markets QB tier company have a market cap below $0.3 MILLION?
Once some due diligence is done, said meager market value doesn’t seem so absurd any more. Simply put – MJTK has very little to its name in the way of commercial achievements, or anything else, for that matter. Suffice it to say that the company’s latest financial report looked like this:
- Cash – $9 thousand
- Total Current Assets – $14 thousand
- Total Current Liabilities – $802 thousand
- Sales revenue – $36 thousand
- Net loss – $704 thousand
This set of numbers sort of speaks for itself, but unfortunately it doesn’t even tell the whole tale of MJTK‘s mediocrity.
No, in order to get a firm grasp the whole situation, one needs to read further down, all the way to the report’s section called “NOTE 11 – CONVERTIBLE NOTES PAYABLE”. There, investors will find out what over half a million dollars worth of MJTK‘s debt outstanding consists of promissory notes with some quite toxic convertible provisions.
For instance there is a note issued to Tangiers Investment Group, LLC. For $240 thousand which can be turned into shares of MJTK common stock “at the conversion price of 55% of the lowest sale price for the common stock during the 25 consecutive trading days immediately preceding the conversion date”.
The rest of the notes are issued to other suspicious agencies, such as the notorious Kodiak Capital Group, LLC, and almost all of them have the option to be turned into shares of the company’s common stock at a rate of “50% of the lowest sale price for the common stock during the 25 consecutive trading days immediately preceding the conversion date”.
With this in mind, it should be obvious why MJTK has fallen so far out of favor, and why any gains it makes seem unretainable.
