Cannabis Science, Inc. (OTCMKTS:CBIS) Returns To Sliding
On Monday the stock of Cannabis Science, Inc. (OTCMKTS:CBIS) posted one of its most positive sessions in quite a while. The company blasted through the chart logging in a gain of 37% and closing at $0.126 per share. Unfortunately the reason for the recovery was yet another round of pump emails this time issued by the affiliates of Damn Good Penny Picks.
The pump outfits disclosed $25 thousand as compensation and in order to earn that money they sent out quite a few touts on Sunday and Monday. Yesterday though they remained silent and not surprisingly CBIS dropped by more than 10% sitting at $0.113 at the end of the day. Investors were eager to cash in their holdings at the current prices resulting in more than 21 million traded shares.
In the past couple of months CBIS has tried to stop its slide by making countless fluff PRs but they remain largely unnoticed by the market. The stock is capable of surging only when lifted by artificial hype created through paid promotions.
The only significant news for quite a while came this Monday and it was not exactly positive – Dr. Robert Melamede, co-founder of CBIS, has stepped down from all of his positions due to health issues. But things get even worse. As part of his resignation Dr. Melamede sold his 500 000 series A preferred shares to the Bogart Family Trust for just $500. The Bogart Trust is owned by Raymond C. Dabney who has been accused on two separate occasions by the SEC for stock manipulation. Now Mr. Dabney has 57% voting control over CBIS.
The only significant news for quite a while came this Monday and it was not exactly positive – Dr. Robert Melamede, co-founder of CBIS, has stepped down from all of his positions due to health issues. But things get even worse. As part of his resignation Dr. Melamede sold his 500 000 series A preferred shares to the Bogart Family Trust for just $500. The Bogart Trust is owned by Raymond C. Dabney who has been accused on two separate occasions by the SEC for stock manipulation. Now Mr. Dabney has 57% voting control over CBIS.
Even after yesterday’s correction CBIS still commands a market cap of $84 million, valuation that is grossly disconnected form the reality of the company. They are trying to create cannabinoid-based therapies for various illnesses but for now having nothing to show except massive debt accompanied by immense dilution of the common stock. CBIS has not filed its financial report for the first quarter of 2014 leaving investors with the annual report for 2013:
• $943 cash
• $302 thousand total current assets
• $4 million total liabilities
• $82 thousand revenues
• $5.9 million net loss
• $302 thousand total current assets
• $4 million total liabilities
• $82 thousand revenues
• $5.9 million net loss
With numbers such as these and an accumulated deficit of more than $92 million it is obvious that the company is financing itself by selling more and more common stock. On April 21 they had already burned through 834 million out of the 850 
million authorized leaving them with few options apart of increasing the authorized amount. Any trades involving the stock of CBIS should be attempted only after careful research in order to avoid any unnecessary losses.
million authorized leaving them with few options apart of increasing the authorized amount. Any trades involving the stock of CBIS should be attempted only after careful research in order to avoid any unnecessary losses. Despite the heavy correction CBIS was not among the biggest losers during yesterday’s trading. The stock of Medient Studios Inc (OTCMKTS:MDNT) crashed by more than 35% and found itself at $0.0022 while the pumped stock of Gold Mining USA Inc (OTCMKTS:GMUI) was crushed by a massive dumping of shares that resulted in a 20% drop and a closing price of $1.04.
