The stock price of Cannabis Science Inc (OTCMKTS:CBIS) posted three strong consecutive strong sessions in last week of April when it managed to reach $0.045 a share. However, the upward momentum quickly lost its way and the stock started with its bearish trend. From thereon, the stock has declined all way down to $0.0320. The stock pulled back a little in last trading session and surged more than 8% to close the trading session at $0.0320. The gains came at a share volume of 13.36 million compared to average share volume of 5.18 million.

The momentum

The fact that Cannabis Science has been declining since last week of April didn’t come as a surprise. The company has several red flags linked to it and demands utmost caution. As per the annual report for FY2014 released last month, the company had $10,000 in cash. The total current assets came at $166,000 and total liabilities stood at $3.95 million. The annual revenue was $1031 and net loss came at $16.8 million.

The concerns

The balance sheet indicates the problems linked with the company. Moreover, despite the dismal results, millions of discounted shares have been given as bonuses to insiders. In 2014, three stock compensation programs were registered and 52 million shares were released under them. For FY2015 another compensation plan was announced with the S-8 form submitted on March 25 which recorded another 50 million shares.

The buzz

There are several people who have been selling the discounted shares in the open market regularly. Since the start of 2015, eight Form 4s have been submitted detailing the transactions of the company’s insiders. One more form was submitted in last week of April, which disclosed that the COO of Cannabis Science Inc (OTCMKTS:CBIS) sold approximately 1 million shares in the three trading sessions between April 27, 2015 and April 29.