Cannabis Science, Inc. (OTCMKTS:CBIS) Continues Its Ascent

For the last three sessions the stock of Cannabis Science, Inc. (OTCMKTS:CBIS) has been climbing up the chart with increasing speed. Yesterday it added another 16% to its value and reached $0.062 per share. The number of traded shares also registered a significant increase with over 7.2 million shares changing hands, the biggest amount seen by the company for nearly a month.

CBIS had been unable to stop its slide towards the bottom of the chart since the start of June and as a result it dropped down to its lowest point for the year of $$0.045 registered last Thursday. It is more than likely that the current upward movement comes as a bounce after hitting such low prices because there is no other immediately obvious reason for the sudden change in investors’ sentiment.

The last PR issued by CBIS came at the end of September and it announced that a laboratory services agreement was signed with ImmunoClin Corporation. The news failed to entice investors maybe because of the fact that Dr. Dorothy Bray acts as a Director, President and CEO for both CBIS and ImmunoClin. Back in August the company also announced that it was in the final stages of two separate deals that would expose them to the Canadian medical cannabis and marijuana market but so far no new information has been disclosed.

The latest financial report also reveals quite a few serious red flags. At the end of June CBIS could rely on the following financials:

• $791 thousand cash
• $1.1 million total current assets
• $4.2 million total current liabilities
• ZERO revenues
• $1.5 million net loss

With a negative working capital of over $3 million and an accumulated deficit that is just short of $100 million the company is certainly not in the best financial health. Not to mention the continued issuance of millions of shares.

As of June 30 the number of outstanding shares had reached 846 million out of the 850 million authorized. Seeing as they had almost exhausted their allowed number of shares the management team decided that something had to be done. On August 12 CBIS filed an amended Certificate of Designation for Series A preferred stock and as a result the holders of the preferred stock now had 67% voting control over the company. On the very next day the number of authorized shares was increased to 1.5 million.

The lack of revenues, the mounting losses and having no completed product make CBIS an extremely risky choice for investment. The current positive trend is not supported by anything substantial and a reversal is entirely possible. Tread carefully and do your own due diligence before initiating any position in the stock.