Today, Cannabis Science (CBIS) announced that it will be issuing a stock dividend after it files a definitive proxy. The company issued an 8-K filing as well as a press release:

Cannabis Science to Issue Dividend Payouts for Previous and Current Shareholders, a $15-25 Million Capital Raise for FDA and Other Clinical Drug Development Programs as Well as a Proposed NASDAQ Up Listing

COLORADO SPRINGS, CO--(Marketwired - Aug 18, 2015) - Cannabis Science, Inc. (OTC PINK:CBIS), a U.S. company specializing in the development of cannabis-based medicines, is pleased to announce the closure and issuance of the previously filed dividend share payout as filed with the S.E.C. on a Definitive Schedule 14C on August 18, 2011, the Definitive Schedule 14C filing (RULE 14c-101). The Company also intends to file another Information Statement to accommodate new shareholders to date to receive a similar dividend payout, to bring all shareholders in on what the Company considers a landmark growth curve. The Company expects to accelerate its current FDA targeted drug development programs and expand its State-by-State initiatives. Increasing shareholder value is of foremost importance for everyone involved; to this end the Company will apply for a unique trading symbol to accommodate a $15 - 25 million USD range financing it has been actively negotiating for the newly created class of dividend payout Common A stock, and formally pursue a contemplated up listing to NASDAQ. The Company expects to begin filing the complete new structure program with no reverse split by the end of the month.

Cannabis Science, Inc. (the "Company") wishes to update its current and former shareholders regarding the previously approved share dividend, which was filed on a Definitive Schedule 14C with the Commission on August 18, 2011. The Company will use its best efforts to issue the share dividend, which is one new share of Class A common stock for each ten shares of common stock that they owned as of December 31, 2010. In addition to this dividend, the Company intends to file a new Information Statement pursuant to Section 14(C) to issue a new dividend to shareholders as of October 9, 2015. The Company intends to seek the approval to issue a dividend of one share of Class A common stock for each one hundred shares owned by shareholders of record as of October 9, 2015. Both dividends will also carry a warrant that will give each shareholder of record a share purchase warrant consisting of an option to purchase one additional share of Class A common stock for each special dividend share received. Each warrant will be exercisable into one share of Class A stock at a price of $1.00 per share for a period of three months after all the proposed changes officially take effect. The Company also plans to apply for a unique and separate trading symbol for its shares of Class A common stock.

"We are very excited to give our all shareholders a dividend payout and get on with the business at hand. It's been a long and very exciting road, with lots of opportunities we have collected along the way. We believe this dividend structure gives our previous and current shareholders of record an outstanding opportunity to capitalize on the share dividend payout to create another asset base for them, while the company utilizes the new class of Common A shares with a higher value to complete our negotiations for a much larger funding to push our drug development programs forward much faster. As regulation changes swiftly in such an enormous burgeoning industry, it creates opportunities and it can create hurdles for those same opportunities. We must remain fluid and move as the regulations move. We believe our team of Scientific Advisors gives us the unique opportunity to strive for excellence in our drug development programs as their track record speaks volumes for themselves. Our expansion program will be fueled by the growing market and demand," stated Mr. Raymond C. Dabney, President & CEO, Co-Founder, Cannabis Science Inc.

About Cannabis Science, Inc.
Cannabis Science, Inc. takes advantage of its unique understanding of metabolic processes to provide novel treatment approaches to a number of illnesses for which current treatments and understanding remain unsatisfactory. Cannabinoids have an extensive history dating back thousands of years, and currently, there are a growing number of peer-reviewed scientific publications that document the underlying biochemical pathways that cannabinoids modulate. The Company works with leading experts in drug development, medicinal characterization, and clinical research to develop, produce, and commercialize novel therapeutic approaches for the treatment for illnesses caused by infections as well as for age-related illness. Our initial focus is on skin cancers, HIV/AIDS, and neurological conditions. The Company is proceeding with the research and development of its proprietary drugs as a part of this initial focus: CS-S/BCC-1, CS-TATI-1, and CS-NEURO-1, respectively.

While this action comes totally out of the blue, it is actually following up from something it announced as definitive four years ago but failed to make effective:

The original proxy describes the security about to be issued, which has shown up in the balance sheet in each of the subsequent quarterly and annual filings as authorized but not issued:

Form DEF 14C filed 8/18/11

From the filing:

Reasons for the New Class of Common Stock

Our Board believes it is in our best interests and the best interests of our stockholders to create a new class of common stock as it will allow for greater value for shareholders in having increased dividend participation; meaning that the new Class A shares would receive a greater amount of any total declared dividend as compared to the Class B shares and any current shareholders would receive essentially the same dividend before and after the recapitalization, but that any new issuances of Class A common stock would have increased dividend participation as compared to current shareholders. In addition, based upon the 1 for 30 conversion ratio for the new class of common stock into the current class of common stock, this will enable the issuance of shares of our common stock at a higher price in connection with such potential issuances and such other purposes as the Board determines.

The Board believes that issuing stock at the higher price along with the greater dividend participation for new issuances of the new common stock, as discussed above, will afford the Company greater flexibility in seeking capital and potential acquisition targets. The ‘ higher price ’ referenced herein means a higher price for the Class A as compared to the Class B common stock, rather than a higher price in the absolute.

The Board has no immediate plans, understandings, agreement or commitments to issue shares of the new common stock for any purposes other than the dividend. While there is no immediate benefit for the Company arising from this recapitalization, we believe the added capital proceeds from the exercise of share purchase warrants into Class A common shares will benefit the Company in its capital growth objective and the added value to shareholders will retain their loyalty and commitment towards the Company ’ s longevity and profitability.

Here are the mechanics of this new security (as described in 2011):

Class A Common Stock (New Class)

Each share of Class A Common stock will be entitled to thirty votes per share on all matters voted on by holders of the Company ’ s common stock. In addition, each share of Class A Common Stock will be convertible into Class B Common Stock at a ratio of 30 for 1, that is, every one share of Class A Common Stock can be converted into 30 shares of Class B Common Stock, at the election of the holder. Each shares of Class A Common Stock will also be entitled to a ratio participation of 97/100 th (97%) on all declared dividends on the Company ’ s common stock, e.g. for every dollar of declared dividend on the Company ’ s common stock, Class A will be entitled to $0.97. Furthermore, the Company will, as soon as practicable, apply for a unique trading symbol for this newly created class of common stock.

Class B Common Stock (Former Class)
Each share of Class B Common stock is entitled to one vote per share on all matters voted on by holders of the Company ’ s common stock. Shares of Class B Common Stock will not be convertible into other classes of the Company ’ s common stock. Each shares of Class B Common Stock will also be entitled to a ratio participation of 3/100 th (3%) on all declared dividends on the Company ’ s common stock, e.g. for every dollar of declared dividend on the Company ’ s common stock, Class B will be entitled to $0.03. Class B Common Stock will continue to trade under the Company ’ s current trading symbol CBIS.OB.

Series A Preferred Stock
Each shares of Series A Preferred Stock is entitled to 1,000 votes per share on all matters to be voted
on by the holders of the Company’ s common stock and is not convertible into any shares of the Company's common stock. With respect to rights on liquidation, dissolution or winding up, shares of Series A Preferred Stock rank on a parity with the Company's common stock.

Share Dividend
Upon the effectiveness of the Company ’ s proposed corporate actions, the Company will issue a dividend to holders of our current common stock so they received 1 share of the new Class A common stock for each 10 shares of the former Class B common stock that they previously owned as of the record date. These shares will be mailed to the shareholders directly from our transfer agent without any action require on the part of our shareholders.

Warrants
Upon the effectiveness of the Company ’ s proposed corporate actions, the Company will issue one non-transferable share purchase warrant for each 10 shares of the former Class B common stock that shareholders previously owned as of the record date, December 31, 2010. Each whole share purchase warrant will be exercisable into one share of Class A common stock at a price of $1.00 per share. The share purchase warrants expire 90 days from the date Class A common stock commences trading under its own unique symbol.

Both of the two people who approved the change in the capital description in 2010 are gone:

Note that there were only 107mm shares of common stock outstanding at the time (approiximately 1.3 billion common shares now). It was disclosed that Melamede and Cowan had 8.507mm each, while Bogat Trust (Ray Dabney) had 9mm shares.

Traders have piled into the name today, perhaps lured by the word "NASDAQ":

A longer term perspective shows that shareholders here have long suffered:

The company has a long history of failure to execute, substantial dilution of its shareholders and insider selling. Is this a last-ditch effort to prop up a sinking ship, or is CBIS, one of the very earliest cannabis stocks, about to create value? Odds favor the former. If the company can raise $15-25mm as it plans, I will stand corrected, but this company has struggled to raise capital for years to no avail. Institutional investors are unlikely to invest in CBIS unless it were to remove existing management and the voting control that they exhibit.