Stock-based compensation drives up MassRoots’ red ink to $44M in 2017

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Turmoil-plagued marijuana tech company MassRoots suffered a $44.3 million loss in 2017, a large portion of which can be attributed to $22 million in stock-based compensation the company handed out during the year.

Losses in 2016 totaled $18 million.

The Denver-based company’s annual report, filed Tuesday with the U.S. Securities and Exchange Commission, also revealed the company posted just $319,242 in revenue last year, down from $701,581 in 2016.

MassRoots also remains low on cash.

The filing offered a detailed recap of the firm’s massive financial woes, leadership upheavals and major missteps.

Among the financial highs and lows:

  • The more than $22 million in stock-based compensation handed out to current and former employees, board members and business partners was nearly triple that of the prior year.
  • MassRoots had $1.2 million in cash on hand last year, up from $374,490 at the end of 2016.
  • The company’s total liabilities were $13.9 million at the end of 2017, dwarfing its total assets of $2.6 million.

In the filing, MassRoots noted that its ability to continue to operate will be based on whether it can raise additional money.

The company said it has “not yet established an ongoing source of revenues sufficient to cover our operating costs. … If we are unable to obtain adequate capital, we could be forced to cease operations.”

The filing also shed light on the company’s recent leadership departures and legal troubles:

  • Former MassRoots board members Ean Seeb, Tripp Keber and Terence Finch – who all resigned in December 2017 – each received a $100,000 cash payout.
  • The company shelled out $145,000 in February to settle a lawsuit filed by a former landlord over the Denver headquarters from which MassRoots was evicted.
  • Amid the financial and leadership losses, MassRoots CEO Isaac Dietrich landed a bonus of more than $190,000 in 2017. That’s in addition to his annual salary of $97,000, which brought his total 2017 compensation from MassRoots to over $287,000.

The annual filing offered limited financial details on the company’s latest endeavor, MassRoots Blockchain Technologies. So far, MassRoots has invested $250,000 to develop the blockchain technology, which is basically a decentralized digital ledger of transactions.

The blockchain funds are part of roughly $943,000 received from 10 investors.

Shares of MassRoots (OTC: MSRT) were trading at 29 cents early Wednesday, nearly unchanged from its closing price Tuesday.