Investors trashed Medican Enterprises Inc (OTCMKTS:MDCN) after the biopharmaceutical company released its Annual Report for the period ended on December 31, 2014. The published annual report, which is delayed by 15-days, took the test of investors’ patience. Clearly, the financial position of the company is not worth the wait.
Poor annual report
The company reported cash balance of $79,624 in 2014 as against 0 in 2013. Its total assets amounted $113,000 while current liabilities were $8 million. The company reported NIL revenues for the period and $56.4 million in an annual net loss. One of the eyebrows raising fact is that the company’s annual net loss is not the result of its operations, but expenses incurred under consulting and management services. Medican Enterprises Inc (OTCMKTS:MDCN) spent nearly $35 million for consulting and $15 million for management.
Over and above this, the liabilities of close to $7.5 million are on account of convertible notes and dilution of the company’s share. This is evident from the company’s outstanding number of shares, which swelled from 48.7 million in December 2014 to 447 million now. The massive rise in the share dilution is on account of the conversion of debt into highly discounted shares, ranging from $0.0087 to $0.0004. But, such dilution is not going to pause anytime soon, given the company’s plans of issuing more number convertible notes.
Meanwhile, the company hinted that it will constantly seek and form joint ventures with companies functioning in the medical and recreational marijuana space for the next 12 months. In this direction, Medican Enterprises Inc (OTCMKTS:MDCN) has already announced the two proposed real estate acquisitions in Arizona. The company intends to lease its 67,000 square foot property in Arizona as a marijuana growing facility to licensed growers. While the second property consisting of 7,200 square foot is leased till August 2018 to a state-licensed marijuana dispensary in Arizona.
Following the declaration of annual results, the stock of Medican Enterprises Inc (OTCMKTS:MDCN) tumbled by nearly 32% to $0.0130. The average numbers of shares traded on the day were 64.38 million.