Cannabis Science Inc (OTCMKTS:CBIS) Drops Further Down
If you take a look at the chart you will see that the recent performance of Cannabis Science Inc (OTCMKTS:CBIS) has been nothing short of depressing. Out of the last 13 sessions the company has managed to register only four ending in the green and the biggest gain among them was of less than 2%. Yesterday the ticker wiped another 4.78% of its value and currently CBIS are trading at $0.0219 per share.
What could explain the prolonged downtrend? Quite a lot of things actually – CBIS is simply riddled with extremely serious red flags. Let’s start with the latest financial results reported by the company. The quarterly report for the period ended June 30 was supposed to be completed by August 15. On August 17, however, a notification of late filing extended the deadline by 5 more days. So when did we get the report? – A little over two weeks ago on October 9 and the numbers inside it paint a rather grim picture:
• $2,504 cash
• $177 thousand total current assets
• $4.2 million total current liabilities
• ZERO revenues
• $6.1 million net loss
During the first six months of the year CBIS has managed to incur a net loss of nearly $10.5 million. The accumulated deficit of the company is sitting just below $120 million. At the same time as the latest Schedule 14C filing revealed between January 1 and April 30 a total of 163 million shares have been issued as compensations. Among the people who received shares are the former CEO, the current CEO, the COO, and the CFO. It seems that despite the abysmal results of the company the management team has been getting some hefty compensations. As of October 9 CBIS had 1.3 billion outstanding shares while the authorized amount was recently increased to 3 billion.
At least last month investors had a reason to be excited when CBIS announced that after a delay of over 4 years they are going to distribute the dividend initially filed with the S.E.C. on a Definitive Schedule 14C on August 18, 2011. The record date for the new dividend was October 9.
CBIS should be approached only after doing extensive research. Take into account the plethora of red flags surrounding the stock and adjust your trades accordingly.
