General Cannabis May Run Out of Cash This Year
Posted March 04, 2011 4:25PM PST
General Cannabis Inc., the company behind website WeedMaps.com, could run out of money this year unless it raises capital, the company said in a Securities and Exchange Commission filing this week.
The Costa Mesa, Calif.,-based corporation, which provides medical cannabis industry services, is seeking to raise $10.5 million through the sale of 3 million shares of common stock at $3.50 per share, the company said in the Tuesday filing. It also registered more than 20.5 million shares of stock for sale by 30 existing shareholders.
General Cannabis shares were trading at $2.85 today, according to Google Finance.
General Cannabis reported net income of $1.2 million, or 4 cents per share, for 2010. That compared to a $1.28 million loss, or 9 cent loss per share, for 2009.
It had $1.39 million in cash on hand as of Dec. 31. Revenue last year totaled $7.7 million. The company posted an $87,768 loss in operating income and interest expense for 2010. It also reported $1.35 million in income attributed to "discontinued operations" related to a reverse merger and purchase of Revyv Inc.
"Based on our current financial situation we may have difficulty continuing our operations at their current level, or at all, if we do not raise additional financing in the near future," the company said in the filing. "Additionally, we would like to continue to acquire assets and operating businesses, which will likely require additional cash."
General Cannabis stated that it faces intense competition, as well as threats to its business from U.S. federal law, state law and sometimes local ordinances.
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