Cannabis Sativa Inc (OTCMKTS:CBDS) Corrects

On Monday on the back of a new PR the stock of Cannabis Sativa Inc (OTCMKTS:CBDS) surged up the chart by more than 30% and closed at $1.49. Investors were lured by the promise of a new special dividend  of 1.5 restricted shares for every CBDS share owned as of the record date of November 16 and by the company’s application for a NASDAQ uplisting.

Well, on the very next day all the momentum disappeared and CBDS dropped down to $1.38 for a loss of 7.38%. The correction isn’t that scary but it shows that investors might have realized that applying for an uplisting to a national exchange and actually getting approved are two very different things. And does CBDS have what it takes to become a NASDAQ company?

In order to find the answer let’s take a look at the latest financial report filed by the company. It covers the quarter ended June 30 and according to it back then Cannabis Sativa had:

• $26 thousand cash
• $3.6 million total current assets
• $1 million total current liabilities
• $617 revenues !!!
• $1.98 million net loss

The balance sheet is simply atrocious with negligible revenues and massive losses. Not to mention that the company expected its cash reserves to keep them going for just two weeks. It is obvious that CBDS must have found some new funds but at what terms? In June the company tried to raise $300 thousand by selling a convertible note but an 8-K form filed at the star to October revealed that “the Lender repudiated the terms and conditions of the debenture and otherwise did not accept it”.

In the days leading to the record date for the new dividend CBDS might continue to be intensely traded but the volatility of the stock should not be underestimated. Without the hype the company may find supporting even its current market price rather difficult.