MassRoots Quietly Buries OTC Markets Stock Promotion Inquiry

Near the close of trading on July 5th, MassRoots (OTC: MSRT) issued an 8-K filing that revealed its pending merger with Odava, a regulatory compliance company in Oregon which will receive 3.25mm shares and $35,000 from MSRT, as well as an inquiry from OTC Markets, which operates three marketplaces for trading over-the-counter securities.  The press release, dated 6/30, was included in the SEC filing and disseminated publicly previously only on OTCMarkets.com after the market closed on Friday, June 30th. MSRT has issued 29 press releases so far in 2017 (more than one per week on average), and this is the only one that was disseminated only on OTCMarkets.com. Typically, it will not only release a press release through a major press release service but will also send it out via email to its list, which it failed to do in this instance.

The company claims to have been unaware of any such activity:

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.

The company further suggests that it has engaged only Torrey Hills Capital, LLC, IRTH Communications, LLC, Money Channel, LLC, Stonebridge Partners, LLC, and Small Cap Voice, LLC for investor relations services since the end of 2015.

The company held a conference call on June 29th. The same day, SmallCap IR ran a blast email, which may have triggered the inquiry. The disclosure from the email stated that the parent of SmallCap IR, Small Cap Specialists LLC, was paid $35,000 by a “Sunrise Media” to promote the stock. StockPromoters.com listed several other stock promotions related to MassRoots on June 28-29.

MSRT, which has declined 51% in 2017, ran up into the call, in which CEO Dietrich promised an exciting new announcement in the near future without shedding much light on it, and then fell back sharply on very heavy volume:

Editor’s note: In our initial publication, we stated in the opening paragraph that “The press release, dated 6/30, has never been released to the best of our knowledge except in this 8-K.” The company informed us that they released it on OTCMarkets.com, which is true and we amended the article to reflect it.

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Breaking news by Alan Brochstein, CFA

ab-byline-ncvBased in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV.

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