MassRoots, Inc. Promotional Activity Reported
June 30, 2017 (Denver, CO)
-- MassRoots, Inc. (OTCQB:MSRT) (the “Company”) announced today that OTC Markets Group, Inc. (“OTC Markets”)
has made the Company aware of promotional activity regarding the market for its shares of common stock.
OTC Markets informed the
Company that it became aware of certain promotional activities concerning MassRoots’ common stock encouraging investors
to purchase shares. The Company has been informed that this promotional activity may have had a material effect on the trading
activity and market for the Company’s shares. Until informed by OTC Markets, the Company was unaware of the promotional
activity and remains unaware of the full nature and content of this activity, the extent of the dissemination or the
parties involved.
MassRoots, Inc. states definitively
that the Company, its officers, directors and, to the Company's knowledge, its controlling shareholders (defined as shareholders
owning ten percent (10%) of more of the Company’s securities), or any third party service providers, have not, directly
or indirectly, authorized or been involved in any way (including payment of a third party) with the creation or distribution
of promotional materials related to the Company and its securities. Further, the Company, its officers, directors, and controlling
shareholders, have not sold or purchased the Company's securities within the past 90 days.
Certain statements related
to MassRoots, Inc. made in promotional materials sent to the Company by OTC Markets should be clarified:
| · | Cannabis
is not legal in nine states – nine states have enacted laws permitting the sale
of cannabis under state law, but it remains illegal under federal law. |
| · | MassRoots
does not have negligible overhead -- in the first quarter of 2017, we incurred losses
of more than $7.4 million. |
| · | Uber
and Fusion were paying clients of MassRoots in fiscal year 2016 but do not currently
have an advertising campaign with MassRoots. |
| · | The
Company has raised $15 million since inception through the sale of its securities and
the exercise of options and warrants. |
| · | MassRoots
believes its revenues could scale significantly as new medicinal and recreational cannabis
markets come online and our audience of cannabis patients continues to grow, but is subject
to many known and unknown risks as disclosed in its filings with the U.S. Securities
and Exchange Commission. |
MassRoots, Inc. has engaged
the following investor relations companies since January 1, 2016: Torrey Hills Capital, LLC, IRTH Communications, LLC, Money Channel,
LLC, Stonebridge Partners, LLC, and Small Cap Voice, LLC.
From March 18, 2014 through June 28, 2017,
the Company issued and/or sold the following securities at prices constituting a discount to the current market rate at the time
of issuance:
| · | On
March 18, 2014, as payment for consulting services, we granted Dutchess Opportunity Fund,
II LP a warrant exercisable into 4,050,000 shares of our Common Stock at $0.001 per share,
and a warrant exercisable into 2,375,000 shares of our Common Stock at $0.40 per share.
As of June 28, 2017, the entirety of these warrants had been exercised into 6,425,000
shares of common stock. |
| · | On
March 24, 2014, we completed an offering of $475,000 of our securities to certain accredited
and non-accredited investors consisting of (i) $269,100 of convertible debentures, convertible
into shares of Common Stock at $0.10 per share, together with warrants, exercisable into
an amount of our Common Stock equal to fifty percent (50%) of the Common Stock underlying
the convertible debentures, at $0.40 per share; and (ii) 2,059,000 shares of our Common
Stock at $0.10 per share, with a warrant, exercisable into an amount of our Common Stock
equal to fifty percent (50%) of the Common Stock purchased, at $0.40 per share. As of
June 28, 2017, the entirety of these debentures had been converted into 2,691,000 shares
of common stock and warrants to purchase 4,462,500 shares exercised or retired. |
| · | On
March 3, 2015, Chardan Capital Market, LLC and the Special Equities Group, LLC, received
40,000 and 160,000 shares, respectively, for Chardan’s investment banking services. |
| · | From
September 15, 2014 to March 11, 2015, we completed an offering of $866,000 of our securities
to certain accredited and non-accredited investors consisting of 1,732,000 shares of
our Common Stock at $0.50 per share, along with warrants to purchase 866,000 shares at
$1.00 per share. As of June 28, 2017, warrants to purchase 100,000 shares had been exercised. |
| · | From
April 1, 2015 through April 17, 2015, MassRoots, Inc. completed an offering of 960,933
shares of Common Stock to certain accredited and unaccredited investors, pursuant to
which, the Company received gross proceeds of $576,200. The Company terminated this offering
as of April 17, 2015. The Company compensated Chardan Capital Markets, LLC $20,000 cash
and 262,560 shares of Common Stock as commission for this placement. |
| · | Under
the Company’s 2014 Employee Stock Option Plan, from June 2014 to April 2015, the
Company issued 1,080,000 shares of common stock, options to purchase 2,350,000 shares
at $0.10 per share, options to purchase 1,065,000 shares at $0.50 per share, and options
to purchase 105,000 shares at $0.60 per share to certain employees, advisors and contractors
of the Company. As of June 28, 2017, options to purchase 250,000 shares at $0.10 per
share were cash-exercised, options to purchase 300,000 shares at $0.10 per share were
retired, and options to purchase 565,034 shares were exercised. |
| · | On
February 27, 2015, certain service providers purchased warrants permitting the purchase
of 100,000 shares at $0.50 per share. |
| · | On
April 28, 2015, the Company entered into a consulting agreement with Torrey Hills Capital,
under which, Torrey Hills Capital received 75,000 shares of Common Stock. |
| · | On
May 12, 2015, the Company entered into a consulting agreement with Caro Capital, under
which Caro Capital, as compensation for services provided, received 200,000 shares of
Company’s Common Stock, and the Company received $200. |
| · | From
June 10, 2015 through July 13, 2015, MassRoots sold 1,540,673 shares of unregistered
Common Stock to certain accredited investors for gross proceeds of $1,140,502. In connection
with this offering, Chardan Capital Markets, LLC received $27,200 in cash and 80,560
shares of Common Stock as commission for this placement. |
| · | On
June 15, 2015, the Company entered into a consulting agreement with Demeter Capital,
under which Demeter Capital, as compensation for services provided, received 100,000
shares of Common Stock, and the Company received $100. |
| · | On
July 30, 2015, MassRoots entered into consulting agreements with each of Shmuel Tennenhaus
and Daniel Mohler to provide advisory services to the Company. As part of the agreements,
Mr. Tennenhaus and Mr. Mohler received warrants to purchase 125,000 and 50,000 shares
of Common Stock, respectively, at $0.90 per share. |
| · | In
December 2015, MassRoots issued 146,200 three (3) year warrants with an exercise price
of $1.06 to our holders of outstanding warrants issued in conjunction with our September
15, 2014 to March 11, 2015 offering. These warrants were issued in exchange for the holder
agreeing to waive certain adjustment provisions of the warrant received in the September
15, 2014 to March 11, 2015 offering. |
| · | Under
the Company’s 2015 Employee Stock Option Plan (“ESOP”), from December
2015 to September 2016, the Company issued 1,231,750 shares of common stock, options
to purchase 1,874,998 shares at $0.90 per share, options to purchase 100,000 shares at
$0.83 per share, options to purchase 381,250 shares at $1.05 per share, options to purchase
850,000 shares at $1.00 per share, and options to purchase 160,000 shares at $0.80 per
share to certain employees, advisors and contractors of the Company. As of June 28, 2017,
options to purchase 14,585 shares at $0.90 per share were retired, options to purchase
12,506 shares at $1.00 per share were retired, and options to purchase 40,000 shares
at $0.80 per share were retired. |
| · | In
January 2016, the Company issued warrants to purchase an aggregate of 100,000 shares
of Common Stock at $0.83 per share to certain service providers. |
| · | In
February 2016, MassRoots issued to a service provider a 12-month convertible debentures
at 15% interest with a principal amount of $35,000 along with 35,000 three (3) year warrants
to purchase shares Common Stock at $1.00 per share The convertible debentures are payable
at maturity, and convertible at the investor’s determination at a price equal to
90% of the price of a subsequent public underwritten offering if one occurs over $5 million,
or, if no subsequent offering occurs, at $0.75 per share. From August 24 to September
30, 2016, the entirety of these debentures were converted $35,000 of a convertible debenture
issued for services into 84,385 shares of Common Stock. |
| · | In
March 2016, MassRoots completed a private offering to certain accredited investors of
six (6) month secured convertible notes with a principal amount of $1,514,667 (the “Bridge
Notes”) together with five (5) year warrants to purchase an amount of shares of
Common Stock equal to the number of shares of Common Stock issuable upon the conversion
of the notes in full and having an exercise price of $1.00 per share. The Bridge Notes
were secured by all the assets of the Company, and each of the executive officers of
the Company entered into a lock-up agreement whereby they agreed to not sell or offer
any shares of Common Stock owned by them until the Bridge Notes were fully repaid, redeemed
or converted. The Bridge Notes were convertible into shares of Common Stock at a price
per share equal to the lower of (i) one dollar ($1.00), and (ii) a 25% discount to the
price at which the Company next conducts an offering after the issuance date of the note;
provided, however, if any part of the principal amount of the note remains unpaid at
its maturity date, the conversion price would be equal to 65% of the average of the three
(3) trading days with the lowest daily weighted average prices of Common Stock occurring
during the fifteen (15) days prior to the notes’ maturity date. Gross proceeds
received by MassRoots in this offering were $1,420,000, while net proceeds were $1,271,600
(excluding any legal fees). In connection with this offering, Chardan Capital Markets,
LLC received $123,400 in cash as commission for this placement. From September 15, 2016
to October 6, 2016, the Company issued 2,377,861 shares of its Common Stock to holders
of the Bridge Notes issued in the March 2016 Note Offering, in satisfaction of its debt
obligations. In the Company’s Registered Offering from August to October 2016,
the warrants issued in conjunction with the Bridge Notes triggered certain price protection
and anti-dilution provisions, in which the number of warrants issued to debt holders
increased to purchase 3,029,338 shares while the exercise price fell to $0.50 per share.
From October 2016 to June 28, 2017, warrants to purchase 2,092,668 shares had been exercised
pursuant to a cashless exercise provision into 967,232 shares. |
| · | Under
the Company’s 2016 Employee Stock Option Plan, in October 2016, the Company issued
3,689,000 shares of common stock and options to purchase 2,220,117 shares at $0.51 to
certain employees, advisors and contractors of the Company. As of June 28, 2017, options
to purchase 178,338 common shares at $0.90 per share had been retired. |
| · | On
January 25, 2017, in connection with the Whaxy Merger, the Company issued 2,926,829 shares
of Common Stock pro rata to all stockholders of DDDigtal, in exchange for all of their
shares of Common Stock of DDDigtal, now our wholly-owned subsidiary. |
| · | Under
the Company’s 2017 Employee Stock Option Plan, from December 2016 to June 28, 2017,
the Company issued 13,024,898 shares of common stock, options to purchase 1,600,000 shares
at $0.77 per share, options to purchase 5,400,000 shares at $0.86 per share, options
to purchase 615,000 shares at $0.89 per share, options to purchase 205,000 shares at
$1.09 per share, options to purchase 435,000 shares at $1.07 per share, options to purchase
24,000 shares at $0.98 per share, options to purchase 60,000 shares at $1.06 per share,
options to purchase 400,000 shares at $0.95 per share, options to purchase 150,000 shares
at $0.85 per share, options to purchase 5,000 shares at $0.81 per share, options to purchase
150,000 shares at $0.82 per share, options to purchase 90,000 shares at $0.89 per share,
and options to purchase 125,000 shares at $0.87 per share to certain employees, advisors
and contractors of the Company. |
| · | From
August 12, 2016 to October 21, 2016, Company completed it registered direct offering
to certain investors pursuant to which we raised an aggregate in $5,000,000 in gross
proceeds from the sale of shares of Common Stock, together with warrants, with one warrant
entitling the holder to purchase one share of Common Stock at a price equal to $0.90
per share (the “2016 Direct Registered Offering”). The purchase price paid
by investors was $0.50 for one share of Common Stock and one warrant. The warrants are
immediately exercisable and expire three years from the date of issuance. The shares
of Common Stock and warrants are immediately separable and are issued separately. This
offering was closed on October 21, 2016. A total of 10,000,000 shares of Common Stock
and warrants to purchase a total of 10,000,000 shares of Common Stock at $0.90 per share
were sold in the offering and have been issued to the Prospectus dated August 12, 2016,
as amended on August 19, 2016 and October 5, 2016. Of the warrants to purchase 10,000,000
shares of common stock at $0.90 per share, warrants to purchase 5,560,000 shares of common
stock have been exercised into non-restricted shares. |
| · | From
November 9-10, 2015, MassRoots, Inc. (the “Company”) raised $1,019,375 in
gross proceeds through the sale of the Company’s securities in a registered best
efforts offering pursuant to an effective registration statement (the “Offering”).
Included in the offering were shares of the Company’s common stock, par value $0.001
(“Common Stock”), and warrants (each whole warrant, a “Warrant”),
one whole Warrant entitling the holder to purchase one share of Common Stock at a price
equal to $3 per share. The purchase price paid by the investors was $1.25 for one share
of Common Stock together with one half Warrant. The Warrants are immediately exercisable
and expire three years from the date of issuance. The shares of Common Stock and Warrants
are immediately separable and will be issued separately. The Company closed the Offering
on November 10, 2015. A total of 815,500 shares of Common Stock and 407,750 Warrants
were sold in the Offering and will be issued pursuant to the Prospectus, dated November
9, 2015 and filed with the Securities and Exchange Commission as of the same date. |
The Company encourages those
interested in the Company to rely solely on information included in its press releases combined with its filings and disclosures
made with the U.S. Securities and Exchange Commission.
About MassRoots
MassRoots is one of the largest technology platforms for the regulated cannabis industry. The Company's mobile apps enable consumers
to make educated cannabis purchasing decisions through community-driven reviews. MassRoots is proud to be affiliated with the
leading businesses and organizations in the cannabis industry, including the ArcView Group and National Cannabis Industry Association.
For more information, please visit MassRoots.com/Investors.
Forward-looking Statements
Certain matters discussed in this announcement contain statements, estimates and projections about the growth of MassRoots' business,
potential partnerships, new features, and related business strategy. Such statements, estimates and projections may constitute
forward-looking statements within the meaning of the federal securities laws. Factors or events that could cause our actual results
to differ may emerge from time to time. MassRoots undertakes no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. The recipient of this information is cautioned not to place
undue reliance on forward-looking statements.
For Press Only
Isaac Dietrich
Chairman & CEO, MassRoots, Inc.
Isaac@MassRoots.com
Source: MassRoots, Inc.
