Todor Pichurov

Notis Global Inc (OTCMKTS:MDBX) Wedges Deeper in Double Zeroes

by Todor Pichurov March 11, 2016

Yesterday Notis Global Inc (OTCMKTS:MDBX), f/k/a Medbox Inc, dropped significantly on the charts, going down 15% and making a deeper cut in double-zero territory. By the bell MDBX's price stopped at $0.008 per share – an all time-low close.

We have covered MDBX extensively and we have been over the chief red flags about the company numerous times. A one-sentence summary of those would include trouble with the SEC over misstated revenue figures and restated filings showing huge discrepancies, poor financial performance in recent reported quarters and massive dilution from note conversion.

Speaking of dilution, MDBX has done quite a lot of that over the last six months. First, in October 2015 MDBX upped its authorized shares from just over 100 million to 400 million. This new space was put to good use as MDBX filled it up with boatloads of new shares.

As of February 26, 2015 or just a couple of weeks ago, MDBX had 330 million outstanding common shares. More than tripling your outstanding shares within the span of five months may seem like a lot but MDBX looks like it's gearing up for something much, much bigger.

A Schedule 14A filed on March 2 reveals that the company is holding a board meeting on April 15. The primary goal of this meeting is to approve another authorized share increase. This time MDBX is dreaming big – the proposed increase is from 400,000,000 to a new level of 10,000,000,000. Spelling out all the digits really helps to see what's being planned.

This is no mere quadrupling, this time the sky is the limit, with a 25-fold increase in AS. This is done to accommodate the towering heap of convertible debt hanging over MDBX's head. The same 14A filing reveals that on a fully diluted basis, the company would need to issue another 1,600,000,000 shares upon the conversion of notes alone, plus extra shares for warrants exercisable.

The market did not react too violently on the day the news of the planned increase came out. It remains to be seen how MDBX does from this point on, now more firmly planted in double zero territory.

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