Medican Enterprises Inc (OTCMKTS:MDCN) Hits New 52-week Low
Last Friday the stock of Medican Enterprises Inc (OTCMKTS:MDCN) sunk to a new record 52-week low of $0.0007 per share. Although the ticker actually closed a bit higher at $0.0009 it was still 10% in the red. The volume for the session remained significant with more than 191 million shares changing hands and a corresponding dollar value of $161 thousand. Will this be the lowest point for MDCN though?
The 8-K file submitted by MDCN last Thursday dashed all hopes of all those investors who still believed in the company’s ability to execute their business plan. As we’ve said numerous times MDCN attracted the attention of the market through their plans to acquire two properties in Phoenix, AZ, – a 7,200 sq. ft. facility leased to a medical marijuana dispensary and a 67,000 sq. ft. property which the company planned to lease to a licensed medical marijuana grower as a fully built facility.
Both of the deals suffered numerous delays but the company was still issuing encouraging PRs that progress is being made. Well, the 8-K filing made everything extremely clear – MDCN has terminated their interests in Arizona and California. When investors saw the contents of the filing the results were catastrophic with Medican wiping 47% of their value in a single session.
The troubling part, however, is that the 8-K served even more bad news. MDCN have increased their authorized shares to 10 BILLION, a member of the company’s board of directors resigned while at the same time a new agreement with the CEO will allow him to receive a monthly salary of $5 thousand in addition to a one-time payment of $100 thousand.
The increase of the authorized shares is extremely alarming. Just two months ago, on April 20, MDCN effected a 1-for-10 reverse split that left them with around 50 million shares. Judging by the daily volumes registered by the stock recently by now the outstanding shares may have very well surpassed 300 million, an increase of 500%. We don’t know the current amount of the outstanding convertible debt but at the end of March, in addition to the rest of its depressing financials, MDCN reported $7.6 million in convertible notes payable.
With all of this in mind the horrendous chart performance of the stock shouldn’t be that surprising. And if the negative trend continues MDCN may soon find themselves at the absolute bottom of the chart.
