Medical Marijuana Inc (OTCMKTS:MJNA) Slows Down Its Fall
After crashing down by more than 17% on Tuesday yesterday Medical Marijuana Inc. (OTCMKTS:MJNA) were at least able to slow down their descent. The stock corrected by another 5% and at the time of the closing bell was sitting at exactly 15 cents per share. The share volume for the day also decreased significantly when compared to the previous three sessions. Still the 7.1 million traded shares were enough to bring the dollar value to $1.1 million.
MJNA issued a press release a couple of hours before the end of the session but if failed to influence the movement of the stock. In the PR the company announced that their portfolio company – HempMeds, will be the premier sponsor of the 3rd annual Marijuana Business Conference. Understandably the news wasn’t what investors wanted to see.
Despite its rather impressive financial results MJNA might find it quite hard to maintain its current share price on its own. The latest quarterly report revealed that at the end of June they had:
• $2.9 million checking/savings
• $66.8 million total current assets
• $16.8 million total current liabilities
• $4.8 million revenue
• $920 thousand net loss
As we said in our previous article the company has adequate cash reserves and their revenues did jump by 20% when compared to the previous quarter. These positive results were not enough to offset the increased expenses though who grew by 38% and as a result a net income of $56 thousand turned into a significant net loss.
In the quarterly MJNA also stated their plans to issue more shares during the third quarter of the year and some of them will be through the conversion of notes. This may mean that by now the 946 million outstanding shares could have turned into much more. The company should file its next financial report by the end of next week and it will show if any shares have been issued.
Back in October Medical Marijuana Inc announced that they have filed a lawsuit against several entities among which a cannabis testing lab. MJNA is seeking $100 million in damages caused by certain claims made by the defendants. The progress of the trial will most likely influence the movement of the stock and should be taken into consideration.
Back in August CannaVEST Corp. (OTCMKTS:CANV) terminated their exclusive distribution agreement with HempMeds and this could have a negative impact on MJNA’s sales.
Even if you believe in the potential of the company you should still use caution when dealing with the stock. At the moment the company has an overly-inflated market cap of over $146 million and further corrections could take place.
