Cannabis Science, Inc. (OTCMKTS:CBIS) Keeps Its Gains
This week the majority of the potstocks suddenly reversed their depressing chart performance and surged upwards thanks to the general industry hype. The stock of Cannabis Science, Inc. (OTCMKTS:CBIS) wasn`t an exception and in just four sessions managed to run from $0.0467 to a high of $0.074, an increase of 58%.
Yesterday though the company strayed away from the general movement of the marijuana pennystocks and instead of incurring severe losses actually made another small jump. Compared to Hemp Inc (OTCMKTS:HEMP) who crashed by 21%, Medical Marijuana Inc (OTCMKTS:MJNA) wiped 16% and American Green Inc (OTCMKTS:ERBB) who slid by 11% at the end of the day CBIS was sitting 2% in the green at $0.0755.
The widespread hype may have helped the company regain some of its lost ground but investors should still be extremely careful when dealing with the stock. On its own CBIS had been going down for quite a prolonged time. At the start of June they traded around $0.125 per share while a low of $0.045 was registered just a few sessions ago. The company itself hasn’t issued a press articles since the end of September and even that one failed to stop the downwards slide. As we said in our previous article CBIS announced a laboratory services agreement with ImmunoClin Corporation but investors couldn’t overlook the fact that Dr. Dorothy Bray is a Director, President and CEO of both companies.
The financial results reported by CBIS are another serious cause for concern. They finished the second quarter of the year with:
• $791 thousand cash
• $1.1 million total current assets
• $4.2 million total current liabilities
• ZERO revenues
• $1.5 million net loss
Despite the rather distressing numbers for the first half of 2014 the management team has received a total of $3.19 million as stock-based compensations. Under the 2012 Equity Compensation Plan over 48 million shares have been issued so far and another 6.5 million were registered under the 2014 Stock Compensation Plan.
This brings us to another massive red flag – the continued dilution of the common stock. As of June 30 CBIS had reached 846 million outstanding shares out of the 850 million authorized. That is why after changing the rights of the preferred A shares an increase of the authorized shares to 1.5 billion was voted.
The fact that CBIS has been targeted by paid pumps on numerous occasions, the last time was in mid-September, shouldn’t be ignored either.
It is paramount to do your own due diligence before committing to any trades involving the stock. The current hype could offer some opportunities for quick gains but if you miss the right timing the losses could be devastating.
