Stefan Sadakov

MediSwipe, Inc.(OTCMKTS:MWIP) Goes on the Rise

by Stefan Sadakov May 7, 2014
mwip_chart.pngIt's been quite a while since we last examined MediSwipe, Inc.(OTCMKTS:MWIP), but a quick peek at the company's share price growth in the last few days definitely warrants a new look. Although unimpressive in their own right, the last five sessions recorded a steady rise, culminating yesterday in MWIP closing at $0.39, almost 9% in the green and on a dollar volume of over $382,000.

The most likely reason for this is the company's April 30 release that saw them announce they had "received final approval...to offer banking and card services to medical dispensaries nationally." Up until then "cash only" transactions were the only way to go, but now MWIP has provided an alternative. During the next 30 days, or the whole of May, the company reportedly expects the first card activations of some of the 400 medical dispensaries around the state of Colorado that would receive the benefits of the new service.

Investors were apparently pleased by the news, but the question remains - is this truly a gamechanger for MWIP? Following Growlife Inc.(OTCMKTS:PHOT)'s shock suspension on April 10, like almost all pot stocks, MWIP crumbled, hard. In an industry so fickle, they are unlikely to sustain positive momentum for long, especially given their balance sheet: 

  • cash: $108 thousand
  • current assets: $450 thousand
  • current liabilities: $1.3 million
  • revenues: $143 thousand
  • net loss: $4.4 million
Despite a doubling of revenues, their annual net losses have gone more than 850% up from 2012, and current liabilities - more than 400%. With such financials, the company will need to work quite hard to change things around.

0MWIP_logo.pngStill, besides the card services business, MWIP seems to be posting other developments. During April they purchased 80 acres of land, bringing what they own to 160 acres for cannabis cultivation, and executed and closed a lease agreement for 20 acres of an agricultural farming facility. In the future, MWIP would have the option to buy the land for $1,100 million, but how they would do that with their financials is questionable. The company also released a new brand of products called MontBlunt, an "alternative to tobacco", but MWIP still hasn't released any details as to how the new products perform.

Given all this, possible investors may want to lean back and await further developments before making any decision. Doing one's own due diligence is mandatory when it comes to penny stocks and even more when it comes to the cannabis industry.

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