Cannabis tech company MassRoots reported a $44 million net loss on revenues under $320,000 in 2017, according to its annual U.S. Securities and Exchange Commission filing outlined by The Cannabist. More than $22 million of the losses equaled the value of stock-based compensation to former employees, board members, and business consultants.
The company has also missed Internal Revenue Service payments and SEC reporting deadlines.
“We do not believe MassRoots has sufficient capital to become cash-flow positive from operations. We expect to need to raise additional funds to continue to fund operations.” – MassRoots officials in the Apr. 16 filing
The filing also shows it added a blockchain subsidiary called MassRoots Blockchain Technologies. According to a Coindesk report, the company has moved to sell Simple Agreements for Future Tokens and collected more than $900,000 between September and January for that purpose. Of those funds, $25,000 was invested toward the development of “blockchain-powered features and utilities.” The filing shows that MassRoots users would be able to earn their tokens through writing reviews and those tokens would be initially used to purchase products and services within the MassRoots system.
As of Dec. 31, 2017, the company’s accumulated deficit was about $74.3 million with a stockholder deficit of $11.4 million. MassRoots also owes the federal government $1.6 million in payroll tax liabilities, which officials said should be settled by June 30.
Last year, the company was embroiled in a power struggle which saw founder Isaac Dietrich ousted, then reinstalled, as CEO. The scandal killed a deal the company had to acquire CannaRegs, which reportedly played a role in Dietrich’s initial removal.
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