On Tuesday’s trading session, CANNABIZ MOBILE, INC (OTCMKTS:LGBI) plunged more than 20% to close the trading session at $0.00160 with share volume of 45.56 million compared to the average volume of 48.48 million. It is a terrible start to the week.
In previous trading session, LGBI stock price traded subdued and largely remained in red zone. As a matter of fact, Cannabiz Mobile momentum has remained in line with the expectations. It is clear that it is one the less known firms in the rising marijuana segment, even if its financial performance is evaluated on the lenient standards of the OTC marketplace.
The growing concerns
Whenever it is about the OTC firms, the traders and shareholders get alert with the red flags associated with them. Cannabiz Mobile is no different. The red flags serve as a warning to investors to carefully read the financials before even investing in the company. It had remained a target of paid pumps in 2014.
The latest financial report states that it had cash of just $22. There are no thousands attached to cash figure. Even there are no hundreds. Cannabiz stated the total assets were $125,000 and total liabilities amounted to $748,000. The massive liability figure is the first red flag in the numbers. It posted no revenue during the specified period while the quarterly net loss amounted to $46,000.
The discounted prices
Apart from the financials, there are many other red flags linked to the performance of the company. Cannabiz Mobile believes that if it pays with shares of its common stock at a steep discount of 45%, it is a great idea. It indicates the presence of toxic funding that raises the risk of dilution. The company’s outstanding shares stood at 395.5 million as of April 1, 2015. It is dilution of almost 1100% in just seven months.