MassRoots Reports Revenue Growth & Provides Best-Efforts Raise Update

08/18/2016 9:10 am EST

Focus: STOCKS

Michael Berger

President & Founder, Technical420.com

Michael Berger, Associate Editor of MoneyShow.com, highlights MassRoots after it reported second quarter earnings that showed significant revenue growth. Here, he recaps the results and discusses an opportunity to invest in MassRoots’ best efforts offering.

MassRoots (MSRT) is growing on all fronts and this is a trend we do not expect to end anytime soon…

With a community of 900,000+ users who collectively engage more than 300,000 times each day, the company has been able to benefit from the tough regulatory environment surrounding the cannabis industry.  

MassRoots is only available in states that have legalized medical marijuana. We expect the November election will serve as a catalyst for MassRoots as at least nine states have some form of cannabis legalization on the ballot.

We expect to see several states legalize medical marijuana and this will significantly increase MSRT’s total addressable market.

Robust Product Pipeline Will Amplify Revenue Growth

MassRoots has many plans for its business platform and continues to execute on its product pipeline. After the successful launch of its dispensary finder in July, the market can expect to see new revenue generating opportunities announced this quarter.

From sponsored posts to enhanced premium profiles, MassRoots should continue to monetize its platform as it works toward its goal of being cash flow positive by year-end. 

MassRoots plans to start charging businesses a monthly fee to access real-time market data on their given region or specialty. It also plans to integrate a point-of-sales system that will let businesses to target users based on their purchasing history at a particular dispensary. These new features will improve the overall service and should expand the number of businesses utilizing the company’s advertising solutions.

Second Quarter Shows Continued Growth

Yesterday, MassRoots reported its financial and operating results for the second-quarter. The company generated $492,233 in revenue during the quarter. This is a significant increase on a quarter-over-quarter basis. We expect this trend to continue during the current quarter.

Since the quarter ended on June 30th, the reported revenue did not include any revenue from the recently launched dispensary finder as the service launched in July.

In late July, MassRoots announced that more than 100 dispensary locations signed a one-year listing contract at $42 a month. Assuming that the number of clients grows 10% a month and accounting for a higher price structure, we can project a 50% increase in revenue as a result of this service.

Best-Efforts Offering Brings in $1.6+ Million

On the earnings call yesterday, CEO Isaac Dietrich started off by providing an update on the company’s best efforts offering.

MassRoots has raised $1,636,500 from the sale of shares and warrants (3,273,000 of each) in its best efforts offering. The company is offering shares at $0.50 a share and warrants (expire 3 years after issuance) to purchase shares at $0.90 a share.

We believe that the capital raised combined with its current cash on hand and the potential cash inflow from the execution of warrants will provide MassRoots with enough capital to execute effectively in the near-term. The capital raised is enough to pay off its debts and this is a positive for the shares.

Bounces off of Lows

MassRoots recently traded below the $0.60 level and we highlighted this opportunity through Technical420.com. The shares climbed more than 14% yesterday and are trading right below the $0.70 level.

The rally yesterday helped MSRT break out of oversold territory and we continue to see upside from current levels. This is a stock investors should keep an eye on as we believe its potential is undervalued by the market.

To get involved with the best-efforts offering, email IR@massroots.com

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