New 8-K Filing Cuts Medican Enterprises Inc (OTCMKTS:MDCN) In Half
For most of yesterday’s trading the stock of Medican Enterprises Inc (OTCMKTS:MDCN) saw absolutely nothing out of the ordinary and was calmly sitting at $0.002 per share. All that came to an abrupt end though when the company submitted a new 8-K filing.
The reaction from the market was immediate – in a matter of minutes MDCN got destroyed wiping nearly half of its share price. When the closing bell rang the ticker was sitting at $0.001 for a loss of 47%. Investors were truly in a state of panic selling with nearly the entire daily volume of 292 million shares being traded in the last two hours of the session. So what terrified investors so much that they decided to immediately dump all of their holdings?
Well, back in December 2014 MDCN announced their intent to acquire a 67, 000 sq. ft. property in Phoenix, Arizona. In January 2015 another acquisition was announced this time for a 7, 200 sq. ft property again in Phoenix, Arizona. Although both of the deals suffered multiple delays without the company being able to close even one of them some investors still remained hopeful. Unfortunately, yesterday’s 8-K was extremely clear – the company has “terminated its interest in pursuing the purchase of real estate and other opportunities in Arizona and California”.
The bad news didn’t stop there though – the amount of authorized shares of the company has been increased to 10 BILLION as of June 15. Back in April due to the rampant issuance of shares and the ballooning outstanding count Medican performed a 1-for-10 reverse split that left them with around 50 million shares. On June 10, however, the daily volume for the session surpassed 300 million shares which coupled with the recent increase of the A/S could mean that the dilution won’t be coming to an end anytime soon.
But yesterday’s 8-K hit investors with one more thing – despite the horrific performance of the company its CEO Mr. Ken Williams is going to receive a salary of $5000 per month in addition to a one-time payment of $100 thousand. Such sums wouldn’t be that alarming if it wasn’t for the fact that MDCN finished the first quarter of the year with $9298 in cash, working capital deficit of $9.6 million and $5.7 million loss from operations. The net loss for the period reached $108 million.
Sitting at the verge of the triple-zero price ranges and with such serious red flags surrounding it MDCN is definitely a dangerous choice. Any trades involving the stock must be preceded by extensive research and careful planning.
