MEDIJANE HLDGS INC (OTCMKTS:MJMD) Soars At The Start Of The Week
The stock of MediJane Holdings Inc (OTCMKTS:MJMD) started the week with a blast. During yesterday’s trading the ticker was able to add nearly 22% to its value and closed at $0.0145 per share. Investors showed increased interest in the company resulting in over 27.5 million shares changing hands. For comparison the monthly average for MJMD stands at around 10.3 million shares.
At the end of March in the span of just two sessions the company was able to not only fly out of the double-zero price ranges but to also reach a high of $0.0206. The rapid appreciation was followed by a prolonged slide but after hitting $0.005 the ticker reversed its direction and has almost reclaimed all of its losses. There is one problem however – neither the previous run up the chart nor the current one has been supported by anything substantial.
In fact MJMD have not issued a single PR outside of their official filings for the last seven months. Not to mention that the financial results of the company have been nothing short of appalling. The latest quarterly report shows that at the end of November, 2014, the company had:
• $43 thousand cash
• $539 thousand total current assets
• $157 thousand total current liabilities
• $18 thousand revenues
• $1.2 million net loss
With limited cash reserves, negligible revenues and massive net loss it should be obvious that MJMD are a risky choice for investment, especially when you add the dilution of the common stock.
At the end of November, last year, the company had approximately 89.5 million outstanding shares. As of January 20 however that number had grown to 101.3 million outstanding shares. Less than two months later, as of March 9, MJMD reported over 361 million outstanding shares. The good news is that nearly all of the shares, 250 million to be exact, were issued under an additional license agreement with Phoenix Bio Pharmaceuticals Corporation and are restricted.
The company managed to reduce its convertible debt but as of February 3 they still owed around $218 thousand to Typenex under a note. Between January 15 and March 2 Typenex received over 20 million shares as a conversion of debt at prices ranging from $0.00712 to as low as $0.00139. In addition, back in December 2014 MediJane issued a $1.2 million convertible note to CannaVest, Corp (OTCMKTS:CANV) that according to CANV’s filings is due on June 23, 2015.
The red flags around MJMD are far too serious to be ignored. The company should submit its annual report by the end of May and when it does we will have a more up-to-date picture of its financial state. Until then use caution and take into account the heightened volatility of the stock before committing to any trades.
