mCig Inc (OTCMKTS:MCIG): Plenty Of Positive Indicators

MCig Inc (OTCMKTS:MCIG) has pulled back from a high of $0.28 reached on July 31, a milestone that followed shortly after we published our last update on the stock on July 25. In that report we examined how MCIG was capitalizing on all aspects of the legal cannabis industry.Several announcements about MCIG have come out since that last report. Today, we look at how the various recent developments around the company could impact the stock price both in the near and long terms.Before we get into that, you may have a look at the movements in the MCIG’s share price. MCIG Daily ChartBusiness For those not familiar with MCIG, it is important to have a little background on the company.MCIG is a diversified holding company operating in the legal cannabis industry. The company operates through subsidiaries and it has wide-ranging product and service operations that expose it to the various facets of the evolving legal cannabis industry. For example, it has a footing in cannabis biotech, manufacturing of vaporizers and managing of cannabis grow facilities on behalf of third-party producers. MCIG is also into cannabis payment processing business.On September 13, MCIG issued a press release providing updates about its ongoing fundraiser. The company is seeking $3.0 million in additional capital, which it intends to use to fund the expansion of its operations. As we’ve seen already, MCIG has wide-ranging operations in the legal cannabis sector, which research firm Arcview Market Research forecasts will be worth $22.6 billion by 2021, up from just $6.7 billion in 2016.MCIG is seeking the additional capital injection partly to fund its plans for a licensed cannabis cultivation and production facility as well as distribution efforts. The company is exploring licensing opportunities in California, Nevada, Oregon, Florida and Massachusetts.In the update, MCIG said it had already raised more than $1.0 million as of September 13 and that it was on track to close the fundraiser exercise by September 30. However, the company could extend the fundraiser if it deems it necessary. The financing will enable MCIG to create more shareholder value by investing in more revenue and profit-generating projects.But how is MCIG raising the additional capital and what kind of impact could it have on the stock price in the near or long-term?The capital raise by MCIG is being done by way of equity offering in a private placement format. The company is issuing the securities to qualified accredited investors.Before you worry about the dilutive effect of the capital raise, note that the accredited investors are paying a premium to the prevailing price to acquire MCIG shares. The investors are purchasing the share at the price of $0.25. As of September 14, MCIG shares were trading at $0.17. This shows the confidence the accredited investors have in the ability of MCIG shares to break out sooner or later.The other important point to note about the capital raise is that the company has avoided debt. MCIG doesn’t like toxic debt. The company has not long-term debt on its balance sheet.Here’s what it’s CEO Paul Rosenberg said about the equity capital raise:

"The time is right in planning for our own cultivation facility. We have seen our business grow and our cash position has improved tremendously. We have lived by the mantra of no toxic debt, and it has proven to be the right choice for our business development to progress."

SourceHere’s what Mike Hawkins, the CFO of MCIG, said about the company’s equity fundraising at a premium price to the prevailing stock price.

"The fact that accredited investors are willing to invest in our company at a premium price from the market fuels us more than ever to deliver positive results to our growth. This capital raise will enable the company to diversify its portfolio without any toxic debt."

Source:On September 5, MCIG released appealing financial results from its fiscal 2018 first quarter (F1Q18) that ended on July 31. The report further brought to the fore the viability and sustainability of the company’s business model as both top and bottom figures grew tremendously from a similar quarter last year.For the latest quarter, MCIG reported total recognized sales of $3.1 million, translating to net sales of $400,000, up about six times over the same period last year. The bottom line of MCIG also continued to strengthen as the company posted a net profit of $77,953 in place of a net loss of $170,736 in the like quarter last year.There is a lot to like in MCIG’s performance for F1Q18. Not only does the company carry tiny liabilities compared to its assets that are worth over $7.3 million, it also has cash to continue investing in more growth.Following the strong quarter, Michael Hawkins, the CFO of MCIG, noted that all key indicators are positive and there is every reason to agree with him in light of the forgoing.ConclusionThe growing revenues, cash on the balance sheet and the capital raise will provide MCIG with more financial flexibility to go after its goals. In the meantime, MCIG is shaping up to be a candidate for short-term gains as the market becomes more aware of its bright prospects.We will be updating our subscribers as soon as we know more. For the latest updates on MCIG, sign up below!Disclosure: We have no position in MCIG and have not been compensated for this article.