Here it is in it’s entirety.. via Forbes
MassRoots isn’t slowing down with its strategy to become the largest cannabis industry software company as the company acquires CannaRegs, Inc. in a deal valued at $12 million. CannaRegs was founded in 2014 by Amanda Ostrowitz and is a tech platform that tracks changes in cannabis rules and regulations and is often nicknamed the “Lexis Nexis of cannabis.”
Ostrowitz is a former Federal Reserve regulator and licensed attorney. Her company is cash flow positive and debt-free with $450,000 in annual revenue, something MassRoots investors will be pleased to hear. The company sparked concern when it stated in a filing recently that it needed $5 million to remain a going concern. It has also been on a buying binge with acquisitions of Odava, a point-of-sale platform for dispensaries and Whaxy, an online menu-management and customer loyalty platform, in just the last year.
“This acquisition expands MassRoots’ compliance offerings, consolidating the most important operations for cannabis businesses into one central platform,” said MassRoots CEO Isaac Dietrich. “We expect with MassRoots’ resources and relationships, we can grow the number of businesses utilizing CannaRegs and significantly increase MassRoots’ contractually-obligated monthly recurring revenue.”
The expectation is that with California’s regulated adult use marijuana market going live, businesses will want to use CannaRegs to update their operational procedures and report to regulators. “The cannabis industry is increasingly becoming compliance-centric and even minor changes in municipal regulations can have a significant impact on day-to-day operations. CannaRegs has made it easy for businesses, regulators and attorneys to track regulatory changes in real-time, often for less than the cost of one billable hour,” said Ostrowitz.
MassRoots reported its last quarter’s results with revenues dropping from $492,233 in 2016 to $142,873 in 2017. Operating expenses shot up from last year’s $2.3 million to this year’s $12.1 million for the quarter. Net losses also jumped from last year’s $2.1 million to this year’s $11.6 million. The company was down to just $31.247 in cash as of June 30. In July, MassRoots raised $1.2 million by selling shares and on August 17th, the company completed a private placement deal that raised $950,000.