General Cannabis Corp (OTCMKTS:CANN) Suffers Another Crash
On April 19 the stock of General Cannabis Corp (OTCMKTS:CANN) almost broke through the $2 per share mark after it reached an intraday high of $1.95. Unfortunately, not only were such price levels impossible to sustain but the stock also incurred a sizable loss closing over 9% in the red on that day. Since then CANN have continued to register losses logging in three consecutive red sessions. Yesterday the company slashed more than 16% of its value and dropped down to a close at $1.31 per share. If the excitement around the ticker is starting to dissipate will the company be able to avoid wiping even more of its share price?
Well, CANN did announce a massive 1205% increase in revenues for 2015 on year-over-year basis, which is a tremendous feat for a pennystock. And they expect that by April 30 to complete the extension of all of the company’s indebtedness to dates beyond January 2017. The company needed such an extension because, despite the aforementioned 12-fold growth in revenues, their financial state has remained extremely disappointing. As of December 31, 2015, 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
That is right, less than four months ago the company had rather limited cash reserves, over $3.4 million working capital deficit and a staggering net loss of nearly $9 million, which was bigger than the net loss for 2014 by close to $2 million. At the same time the loss from operations has ballooned from $2.5 million in 2014 to more than $7 million in 2015.
In our previous articles we also warned you about the warrants and options issued by CANN that allow their owners to get shares at extremely cheap prices. Even the warrants that are going to be issued as part of the debt extensions will have an exercise price of $1.07.
Earlier this month the company did announce the forming of a new public market research services division and the re-launch of GC Supply but it remains to be seen just how much will this influence CANN‘s revenues. Trading pennystocks carries a lot of risk and the stock of General Cannabis is not an exception. Plan your trades carefully and do your own research before committing to anything.
