General Cannabis Corp (OTCMKTS:CANN) Climbs Higher
So far the stock of General Cannabis Corp (OTCMKTS:CANN) has registered four consecutive green sessions with increasing daily gains. At the end of last week the company surged by over 18% sitting at exactly $1.5 by the time of the closing bell. The last time the ticker traded at such price levels was way back in July 2015.
The recent climb of the stock has been supported by two new PRs published by CANN. On April 14 the company announced the launch of its public market research service division called General Cannabis Equity Research or GCER. The new division will focus only on companies that are current with their SEC filings with the first reports expected to come in July. A day before that, on April 13, came the announcement that CANN have been able to extend the maturity dates of all of their debt to at least January 31, 2017. According to the PR as part of the deal, however, around 750 thousand warrants with an exercise price of $1.07 had to be issued.
Back in December CANN already issued warrants for the purchase of 50 thousand shares with an exercise price of $0.60 while at the end of last month it issued warrants for the purchase of 100 thousand shares at $0.67 per share. While the new warrants are priced significantly higher than that their exercise price remains far lower than the current market price of the company’s stock. Investors shouldn’t forget that CANN also issued 619 thousand stock options exercisable at $0.60 at the end of last year.
Still, the extension of CANN‘s existing debt is quite important. For 2015 the company may have reported a staggering increase in its revenues of 1205% on year-over-year basis but its financial state remained nothing short of depressing. The annual report for 2015 revealed that as of December 31 CANN had:
• $59 thousand cash
• $246 thousand total current assets
• $3.7 million total current liabilities
• $1.76 million total revenues
• $8.78 million net loss
As we said the bigger revenues generated throughout the year not only failed to bring CANN closer to profitability but the company actually reported the opposite – the net loss for 2015 is nearly $2 million higher than the one for 2014. At the same time the operating loss has increased from $2.5 million to over $7.2 million. The cash reserves the company had at the end of 2015 are not particularly reassuring, either.
It is easy to get excited about the potential of any of the so-called pot-stocks, especially with the 4/20 date just around the corner, but ignoring the risks may be extremely dangerous. Plan your trades carefully and do thorough research before committing to anything.
