On Thursday’s trading session, CANNABIZ MOBILE, INC (OTCMKTS:LGBI) declined more than 12% to close the trading session at $0.00210 with share volume of 88.31 million almost double from the average volume of 41.83 million. It was a second consecutive day of sharp decline.

In previous trading session, the stock price plunged 35.14%, on a dollar volume of almost half a million, closing near $0.0024 mark. As a matter of fact, the turn of events is in-line with the expectations. It is evident that Cannabiz Mobile is one the less renowned firms in the marijuana market, even if it is judged on the lax standards of the OTC marketplace.

The red flags

There are several problems associated with the company that gives a warning to investors before even considering investing in the company. The company was a target of paid pumps last year. As per the last financial report, it reported cash of just $22 with no thousands attached to it. Even it is not in the hundreds.

The total assets stood at $125,000 while total liabilities came at $748,000. It is the first major flag in the financial numbers. Also, there was no revenue generated during the specified period. The quarterly net loss came at $46,000.

The problems

Even if the financials are not enough to outline the picture of Cannabiz Mobile, investors should know that the company considers that paying with shares of the company’s common stock at a 45% discount to the prevailing market price is a great idea.

It is important to understand that with the presence of toxic funding, there is always a risk of rampant dilution, and Cannabiz Mobile is no exception. The company’s outstanding shares count surged to more than 395.5 million as of April 1 from 34 million reported on September 30, 2014. It indicates more than 1100% dilution in just 7 months.