Cannabis Science, Inc. (BB:CBIS.PK)
Cannabis Science looks like a company with its heart in the right place, but it is perhaps not the best investment choice. The company is led by Dr. Robert Melamede, who is a fairly renowned cannabinoid research scientist, and (broadly speaking) his company’s goal is to pursue the development of cannabinoid-based medicines and get them approved by the U.S. Food and Drug Administration.
For those who believe in the medicinal power of cannabis, this is a great thing. For those who are looking for a great investment — not so much. The company does report with the SEC, which is a huge plus, but what it has had to report is pretty unattractive. For the quarter ended September 30, the most recent for which there is data, Cannabis Science reported revenue of $70,581, up from $1,848 in the year-ago period, but the revenue is saddled with a net operating loss of over $1 million. The company had more than half a million dollars in general and administrative costs for the quarter. Cannabis Science has reduced its year-to-date net loss to $3.9 million from $14.1 million, but it’s hard to get excited about the improvement.
The company has a pretty big liquidity problem. The 10-Q states that, “There are insufficient liquid assets to meet current liabilities or sustain operations through 2013 and beyond and the Company must raise additional capital to cover the working capital deficit. Management is working on plans to raise additional capital through private placements and lending facilities. The company currently is relying on continuing loans from stockholders to meet its obligations and sustain operations.”
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