Will Cannabis Science Inc (OTCMKTS:CBIS)’s Dividend Stop Their Descent?
Cannabis Science Inc (OTCMKTS:CBIS) has been going nowhere but down for three weeks now. After losing another 4.3% yesterday the stock dropped to a close at 2 cents per share. Before the start of yesterday’s trading CBIS did publish a new PR but it failed to have any effect on the movement of the stock.
This shouldn’t come as a surprise because the press release did not contain any useful information. Instead CBIS decided to announce that tomorrow they are going to reveal the actual process of the distribution of their dividend. In our previous articles we already informed you that CBIS has decided to give out two dividends – a 1 Class A share and 1 warrant for every 10 CBIS shares dividend to stockholders as of the record date December 31, 2010 (that is right, the date is from nearly 5 years ago) and a “new dividend” of 1 Class A share and 1 warrant for every 100 CBIS shares to shareholders as of October 9, 2015. Is this going to be enough to prevent the company from crashing even further down the chart though?
Well, some investors might indeed get excited by the free shares they are going to receive but that won’t make the red flags surrounding CBIS any less dangerous. Despite describing itself as a company specializing in the development of cannabis-based medicines CBIS has had a rather glaring lack of meaningful results. In fact they finished 2014 with annual revenues of $1031 while for the first half of 2015 they haven’t generated even a dime in revenues. And that is despite the company talking about releasing new products from as early as January.
The most recent financial report covers the quarter ended June 30 despite the fact that it was filed just three weeks ago on October 9. It revealed that CBIS has:
• $2,504 cash
• $177 thousand total current assets
• $4.2 million total current liabilities
• ZERO revenues
• $6.1 million net loss
To say that the results from their operations have been underwhelming would be quite of the understatement. At the same time insiders of the company have been receiving stock compensations and bonuses rather regularly under the numerous stock compensation plans. According to a Shcedule14C Statement from October 19 between January 1 and April 30 a total of 163 million shares have been issued as compensations and among the people who received shares you can find the former CEO of the company, the current CEO, the COO, and the CFO. Investors should keep in mind that the outstanding shares of the company surpassed 1.3 BILLION while the authorized shares were doubled recently – from 1.5 BILLION to 3 BILLION shares.
With all of this in mind it is up to you to decide if CBIS sounds like a wise choice for investment. You should also decide how likely it is for the company to complete a successful uplisting to the NASDAQ, something they have been mentioning quite often in their recent press releases.
In early trading today CBIS are down by another 5% currently trading at $0.0190 per share.
