Borislav Tonev

North American Can Com (OTCMKTS:USMJ) Digs a Hole in the Ground

by Borislav Tonev February 10, 2016

Several months ago, some research outfits covered North American Can Com (OTCMKTS:USMJ, USMJ message board) and said that the stock can easily reach $0.15 per share. The management team has been on a mission to convince us that this really is possible. The reports from the aforementioned outfits were published on the company website, and numerous announcements were made.

According to one of the more recent ones, the company is about to introduce cannabis to the nutritional supplement industry and USMJ even talked about potential partnerships with NFL stars. Neither this nor the research reports seem to be affecting the way investors feel about the company.

USMJ has been sliding down the charts for quite a while, but the recent performance has been particularly disappointing. Yesterday, for example, the ticker lost another 28%, it logged a new 52-week low of $0.0004, and it stopped at $0.0005 per share.

Investors clearly aren't very happy with USMJ and we can't really blame them. The company entered the marijuana industry at the end of 2013 and it's fair to say that things have not been going according to plan ever since.

Excitement was pretty huge at first, but when the results came out, people realized that the enthusiasm had been premature. A point proven by the figures in the latest financial report:

  • cash: $125 thousand
  • current assets: $217 thousand
  • current liabilities: $404 thousand
  • quarterly revenue: $95 thousand
  • quarterly net loss: $63 thousand

The underwhelming results are far from the only problem. Last year, USMJ proudly announced that it has sold one of its divisions to another OTC company called Puration Inc (OTCMKTS:PURA). USMJ said that it will receive shares of PURA's stock and promised that these shares will be distributed among its shareholders as dividend.

In December, however, they said that the dividend won't be paid off until PURA becomes current with its reporting obligations. Right now, the Stop sign is still sitting proud on Puration's profile.

Indeed, the delay in the dividend probably isn't USMJ's fault, but when your money is on the line, you want to see every single sentence in the press releases being turned into actions. Especially when there's a ton of toxic debt threatening your investment.

According to the latest report on September 30, there was about $1.1 million worth of defaulted notes which were convertible into stock at discounts ranging from 30% to 50%. According to Wyoming's Secretary of State, USMJ has recently raised its number of authorized shares to 4 billion and we reckon that there might be a connection between this action and the vast amount of convertible debt.

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