Cannabis Science Inc (OTCMKTS:CBIS) Submits Its Quarterly Report
On Friday Cannabis Science Inc (OTCMKTS:CBIS) announced that they will be hosting a “black tie, red carpet” event in Los Angelis. According to company officials this is going to be a celebratory fundraising event with CBIS bringing several well-known celebrities. Despite the flashy announcement on that day the stock of the company continued to follow its downwards path closing the trading session with a loss of nearly 4% at $0.0151 per share.
It is not that hard to find out why investors were far from impressed by the news. After a considerable delay on June 9 CBIS finally completed their financial report for the first quarter of the year so let’s see what this company with “international connections” had on its balance sheet as of March 31, 2016:
• $15,192 cash
• $341 thousand total current assets
• $4.76 million total current liabilities
• $2,925 revenue!!!
• $3.3 million net loss
To say that the numbers are simply abysmal would be an understatement. CBIS have extremely limited cash reserves, massive working capital deficit, meager quarterly revenues of less than $3000, and are still incurring staggering losses. Don’t forget that despite the ticker’s chart losses at the current market price of the stock CBIS still command a market cap of close to $20 million.
If the depressing financials somehow weren’t enough to convince you just how dangerous trading the stock of the company really is then you might want to turn your attention towards the continued dilution of the common stock. At the end of 2015 CBIS had 1.58 BILLION outstanding shares but as of May 4 that number had already surpassed 1.83 BILLION shares.
Out of the shares issued during the quarter 103 million were for services, 45 million were for used for the settlement of liabilities and debt and 98.5 million shares were issued as “stock option exercised“. These last shares are particularly important – according to Note 6 of the quarterly report all of them are free-trading S-8 registered shares that were issued as part of the various Stock Option and Equity Award plans of the company, something that we have been warning you about constantly in our articles.
In Friday’s PR the CEO of the company stated that they are nearing the final process for the loyalty gifts of shares they promised their shareholders months ago. In fact, in a PR from May 3 the CEO stated that he wanted to see this “closed out and completed” by the end of that month but it appears that that was a bit too optimistic.
The red flags surrounding CBIS must not be overlooked. Plan your trades accordingly and never make investment decisions based solely on hype.
In early trading today CBIS is trying to recover some of its losses currently sitting 6.6% in the green at $0.0161.
