Todor Pichurov

Medbox, Inc. (OTCMKTS:MDBX) Takes a Late-Session Hit

by Todor Pichurov March 23, 2015

Friday was not shaping into a particularly interesting session for shareholders of Medbox, Inc. (OTCMKTS:MDBX). That changed when a massive volume spike of nearly 100,000 shares pushed the price to a close deep in the red. MDBX stopped 9.7% down by the bell, at $1.49 per share.

The company is still going through the massive turbulence caused by significant errors in revenue reporting that caused a number of financial reports to be restated. The announcement of a SEC investigation into the matter and the need to restate caused a dramatic chart slide. A large number of private law firms also took aim at the company due to the massive losses suffered by shareholders as MDBX went from over $20 per share to under $2 within less than a year. As a matter of fact, today is the last date on which shareholders can join the class action and request appointment as lead plaintiff.

MDBX put up its restated reports and announced becoming current with its filings last week. The restated reports show some rather significant discrepancies between what was erroneously reported and what really happened. We recommend that everyone read the restated reports on their own but some of the most significant differences warrant special attention:

  • original Q1 2014 report: $331,000 in net revenues
  • restated Q1 2014 report: negative $8 thousand in net revenues
  • original 2012 annual net revs: $2.59 million
  • restated 2012 annual net revs: $1.17 million
  • original 2013 annual net revs: $5.22 million
  • restated 2013 annual net revs: $2.06 million

As a direct consequence of the significantly lower revenues, net loss is significantly higher for those periods as well. It's discouraging that it took so long for those obviously huge errors to come to light and it took the SEC's involvement for MDBX to fix things up, even if after such a long time. The company recently announced a $15 million deal with a certain Lizada Capital LLC, which we examined at length in an older article, but the deal did little to fix the company's share price in the longer term.

How much of a further impact the lawsuits will have on MDBX's chart standing remains to be seen.

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