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MassRoots Falls Delinquent On Debt Payments, Cuts Jobs and Vendor Agreements

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The marijuana centered social media mobile app disclosed earlier this week that they had recently defaulted on their debt payments. The Sept. 21 filing with the Securities and Exchange Commission stated that the company was unable to make payments on a $966,000 outstanding principal owed to creditors.

These payments were to go to creditors whom purchased six-month convertible secured promissory notes earlier this year. As a result of failing to repay the promissory notes, several shareholders have chosen to cash in their debt for shares, the company issued 319,000 shares to its creditors on Sept. 20. Earlier, on August 17 of this year, the company had already issued 51 million shares of common stock.

The company finds themselves in a less than ideal situation after they were denied by the Nasdaq exchange to list their stock, forcing them to only be able to trade shares on the over-the-counter market (OTCQB) under the ticker MSRT. The denial caused many of their stockholders to lose confidence in the company and the stock lost nearly half its value.

According to the company’s annual filing, they reported a net loss of $8.5 million on revenue of nearly $214,000 in 2015. The year before, the company reported a net loss of $2.4 million on barely $9,000 in revenue.

“This is kind of the worst-case scenario, in many regards,” said Isaac Dietrich, MassRoots chairman and chief executive officer, in a report by The Cannabist.

Also disclosed in the report was the fact that the company has cut more than 40% of its workforce, laying off 14 of their 33 full-time employees. The company has also sliced many of its vendor agreements, these were all done in efforts to save the company $146,000 a month.

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All the while, MassRoots remains confident that they will go above the red before the end of the year. They are claiming to gain 30,000 users per month with a base of 900,000 users utilising the app. In the report, they also claim the upcoming elections will cause organic growth to increase substantially.

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