Medical Marijuana Inc (MJNA)

[scoobey-do]

Medical Marijuana, Inc. reports record sales revenue of $20,227,918 in the first quarter of 2019, a 92% increase over the same quarter in 2018. What I think is important, but MJNA did not toot, was their net income. The income (loss) for the three months reported for 2018 was stated as a loss of 134,592,766.

What wasn't said was that 2018 included a reclassification adjustment of $132,500,890 due to income that was reported in early periods due to accounting rules in place during the earlier periods.

If we take out the reclassification due to income reported in prior periods, MJNA would have reported income for the first quarter of 2018 of $2,091,876.

So, Medical Marijuana, Inc. reported net income of $9,538,150 in the first quarter of 2019, a 455% increase over the same quarter in 2018, before prior period non-cash adjustment of ($132,500,890).

Note regarding the adjustment as stated in the 2018 10-Q:

Note 10: Other Income/Expense

In the period ending March 31, 2018 the Company recorded a net loss of $132,500,890 under Other Income/Expense. Such expense is a non-cash item that is comprised of changes in the fair value of publicly traded equity investments held by the Company. Under prior applicable accounting standards, the Company previously reported such changes in fair value as comprehensive income (loss) and accumulated and unrealized comprehensive income (loss) in its shareholder equity section of the balance sheet. The Comprehensive Income reported at December 31, 2017 was $204,574,404, which is now recognized in retained earnings as is the net loss for the period ending March 31, 2018.

MJNA had a great first quarter of 2019 and I look forward to what the rest of the year will look like.