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Tuesday, 12/06/2016 10:52:25 AM

Tuesday, December 06, 2016 10:52:25 AM

Post# of 13032
The S-1 filing and some noteworthy details hidden inside. See a list of the most important details regarding CANN's registration:
http://www.dailymarijuanaobserver.com/single-post/2016/12/05/marijuana-stocks-news-CANN-General-Cannabis-Corp-S-1-Share-Registration-Highlights-Details

..
September Warrants

The registration filed today was for up to 9,000,000 shares of CANN common stock that are issuable upon exercise of the warrants issued in their agreement dated September 21st of 2016. This is comprised of 4,500,000 12% A Warrants, and 4,500,000 12% B Warrants. These shares of CANN are being registered for sale on behalf of the selling stockholders that exercise their warrants.

Offering Proceeds

While CANN will stand to receive proceeds from the warrant exercise, it is the selling stockholders that will receive the net proceeds from the share offering. CANN will bear all of the costs associated with the registration of common shares covered in the offering. With that said, it is the selling stockholders that bear the costs of brokerage commissions, fees and discounts attributable to share sales.

Offering Details

The proposed maximum offering price is $3.25 per share, with a proposed maximum aggregate offering of $29,250,000. However, "selling stockholders may sell all or a portion of the shares being offered pursuant to this prospectus at fixed prices, at prevailing market prices at the time of sale, at varying prices or at negotiated prices."

Since shares of CANN closed today at $3.26 per share, it will be interesting to see how many of the warrants are exercised. Additionally it will be interesting to see how many of those stockholders choose to cash out and sell the potentially issued 9 million shares. 9 million common shares is a large percentage of CANN.

57%

9,000,000 shares is equivalent to approximately 57% of CANN's issued and outstanding common stock. Common stock outstanding before the offering is listed at 15,737,921 shares. Common stock outstanding after the offering if all warrants are exercised would be 24,737,921 shares. This could be a massive dilution for any existing shareholders.

Other Big Risks

One of CANN's warnings in the prospectus beyond the obvious (cannabis is federally illegal in the U.S.) that we wanted to point out was that they "have a history of losses and may not achieve profitability in the future." As quoted from the S-1:
"We generated net losses of $6.9 million in the year ended December 31, 2014, $8.8 million in the year ended December 31, 2015 and $17.0 million for the nine months ended September 30, 2016. As of September 30, 2016, we had an accumulated deficit of $33.4 million. We will need to generate and sustain increased revenues in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase any such level of profitability."

"Sessions' passion for anti-MJ might actually be the catalyst needed for legalization, if he missteps."

Frode, Thursday, 11/24/16 05:57:38 AM

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