Cliff Notes on Quarterly Report:
1. New Revenue Stream: Starting in May 2018, MassRoots will charge dispensaries a minimum of $420 per month per location for access to its advertising portal with a twelve-month commitment. With MassRoots’ wide-spread audience and following in some of the leading medical cannabis markets in the country, we believe our business portal will be well-received by our client base. According to ArcView Market Research, there are projected to be over 2,700 state-regulated dispensaries in the United States by 2020. Companies such as WeedMaps, Inc. and Leafly, Inc., which have a similar business model to MassRoots, are reported to be generating over $25 million in revenue per year.
2. Rewards/Incentive Program: "In the summer of 2017, we began exploring the implementation of an initiative to reward users within our platform to incentivize user-growth, encourage quality revenues of strains and products and increase user engagement with businesses, and we have invested a considerable amount of resources to exploring the rewards initiative. Rewards models have created powerful loyalty programs and stimulated spending for airline, hotel, and credit card businesses. We believe that if we are able to implement such a rewards model, it could offer a market-defining competitive advantage."
3. Reduction in Expenses and Liabilities: "In 2018, MassRoots has fully repaid its convertible debt and reduced its liabilities by more than $10 million while investing significant capital into the continued development of its platform. MassRoots’ has also reduced its operating expenses by more than $2 million during the first quarter of 2018 as compared to 2017 as we continue to focus on automation with technology rather than expansion of payroll."
4. Blockchain: "In December 2017, we formed MassRoots Blockchain Technologies, Inc., a wholly-owned subsidiary of MassRoots, to explore how blockchain technology may be utilized in the cannabis industry."
5. Risk: "The Company’s primary source of operating funds since inception has been cash proceeds from private placements of common stock, proceeds from the exercise of warrants and options and issuance of notes payable. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company will require additional financing to fund future operations. Management’s plans with regard to these matters encompass the following actions: 1) obtain funding from new and current investors to alleviate the Company’s working capital deficiency; and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability to translate its user base into sales. However, the outcome of management’s plans cannot be ascertained with any degree of certainty."
