Cannabis Science, Inc. (OTCBB: CBIS) has been the hottest penny stock to buy this week with traders seeing daily gains in the stock as it again led the OTC as the most traded stock of the day yesterday. The stock is liquid, no question of that but, when a nickel or dime bag costs you a quarter, you need to take a second to think whether or not it’s worth it.
The hot penny stock caused hundreds of emails to come pouring in yesterday when Cannabis Science stock price shot close to that 25 cent range asking the following:
- Buy CBIS? Sell CBIS? Hold CBIS? Will CBIS Crash? Is CBIS a Scam?
Although we notified our subscribers yesterday to be smart and book profits while looking for a pullback in the stock, the penny stock was up over 740% since our alert when CBIS reached its high of .245 yesterday. Subscribe today to get our next alert FREE.
So, is the crash coming for the hot penny stock? See below the chart and decide for yourself.
CBIS Stock Chart since January 10, 2012:
Note: Due Diligence is a must when investing in penny stocks.
Momentum can only take you so far before rockets run out of fuel and start falling from the sky.
So for those of you who own or are considering buying CBIS at its current levels, check out the following facts:
- Cash: CBIS reported $6,190 in cash according to the most recent 10-Q (see here)
- Revenues: CBIS reported $368 in revenue for the quarter, $73,702 for the nine months ended
- Historic Revenues: CBIS reported $90,107 since January, 2005 which includes the above amount
- Liabilities: Total liabilities of $2,108,478
Unfortunately, CBIS doesn’t have the gusto on its income statement or balance sheet to appear to be a “sound investment.” On Valentine’s Day, Cannabis Science filed form S-8 with the SEC (see here) where they reported a stock compensation plan issuing 50,000,000 more shares executable at $0.03565 which was stated simply for the calculation of the filing fee of the document.
Additionally, Cannabis Science issued the following common stock:
- On July 26, 2011: Cannabis Science issued 1,400,000 common shares, with a fair market value of $0.04 per share, for settlement of $1,400 of shareholder debt assigned from the shareholder note payable originating on December 16, 2010 and owing at December 31, 2010.
- July 27, 2011: Cannabis Science issued 6,000,000 common shares, with a fair market value of $0.04 per share, for settlement of $6,000 of shareholder debt assigned from the shareholder note payable originating on July 9, 2010 and July 15, 2010 and owing at December 31, 2010.
- July 28, 2011: Cannabis Science issued 3,000,000 common shares, with a fair market value of $0.05 per share, for settlement of $3,000 of shareholder debt assigned from the shareholder note payable originating on July 9, 2010 and owing at December 31, 2010.
- August 8, 2011: Cannabis Science issued 3,400,000 common shares, with a fair market value of $0.04 per share, for settlement of $3,400 of shareholder debt assigned from the shareholder note payable originating on December 16, 2010 and owing at December 31, 2010.
- August 16, 2011: Cannabis Science issued 3,000,000 common shares, with a fair market value of $0.04 per share, for settlement of $3,000 of shareholder debt assigned from the shareholder note payable originating on August 16, 2010 and owing at December 31, 2010.
- September 6, 2011: Cannabis Science issued 3,500,000 common shares, with a fair market value of $0.03 per share, for settlement of $3,500 of shareholder debt assigned from the shareholder note payable originating on July 15, 2010 and owing at December 31, 2010.
- September 14, 2011: Cannabis Science issued 3,000,000 common shares, with a fair market value of $0.03 per share, for settlement of $3,000 of shareholder debt assigned from the shareholder note payable originating on July 30, 2010 and owing at December 31, 2010.
- September 22, 2011: Cannabis Science issued 3,500,000 common shares with a fair market value of $105,000 to a consultant for services rendered to the Company; pursuant to a consulting agreement entered into on August 10, 2011 with services to be provided through August 31, 2013.
That’s a total of 26,800,000 shares issued in the quarter to pay off debts.
On top of that, the company has a history under its former names (which is accessible by anyone who reads their SEC filings) as being nothing short of a classic pump and dump.
The transition from Oil & Gas Exploration to Cannabis Research:
- 2007: Brighton Oil & Gas, Inc. formerly traded under the symbol (OTCBB: BOGS). On October 23, 2007 announced a reverse split of 1 for 10 on its common stock effective at the start of business on December 12, 2007. The new symbol for Brighton Oil & Gas, Inc. changed to (OTCBB: BROG)
- 2008: Gulf Onshore, Inc. formerly traded under the symbol (OTCBB: GFON)
- 2009: Gulf Onshore, Inc. acquired certain assets used to conduct a cannabis research and development business (in college we called this rolling papers and a grow light) and later changed the name to Cannabis Science, Inc. on April 7, 2009
The crash is coming in Cannabis Science (CBIS) and, just like we called it on North Springs Resources (NSRS) and Amwest Imaging (AMWI), so make sure you trade responsibly if you are trading, or thinking of trading CBIS today or in the future.
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