MJNA is tanking hard. Beyond stop-losses being triggered, there are many potential fundamental reasons - weak Q3 results, the CANV dilution, the product safety accusations and the SEC inquiry (as of June 17th and disclosed in August through the OTC disclosure statement). It is the latter where I would like to share my thoughts.
MJNA first announced its own internal investigation earlier this year. It began in January, as was disclosed in the Q1 filing (note that this should have been disclosed as a subsequent event in the annual report and wasn't). Keep in mind that every single director at that time has left the board with the exception of Michelle Sides, the Chairman and COO (rather alarming). Here is what was disclosed:
This was not repeated in the Q2 filing , though the company stated that it had made corrections to its articles of incorporation in Oregon, and the Q3 disclosure statement made no reference to it either. My take was that the company uncovered a lot of problematic issues related to pre-CannaBank (i.e Perlowin). Note that there has never been a summary of the review, nor has this elusive shareholders' meeting every been scheduled.
So, my take was that the SEC might be inquiring about these issues. Alternatively, the way that MJNA misrepresented the CannaVest deal (both in its Q4 report, when it accounted improperly as well as in the press release from February discussing sales guidance and operating income guidance for 2013). A final and more damaging possibility (though I am sure that the alternatives go beyond the three that I am discussing) is that the whole transfer of the company in 2011 may be the issue. CannaBank (then known as Hemp Deposit and Distribution Corp, or HDDC) was supposed to transfer assets to MJNA, but this never ...
