Last Friday, it was a green closing for Medbox Inc (OTCMKTS:MDBX) after the company filed its first annual report. The share price surged almost 17% to close the session at $1.65 per share. However, the optimism was short-lived as it erased a major part of the gain on Monday’s trading session.
The financials
The company filed its due 10-K form on last Thursday after the market hours. The report contained little that could boost optimism among investors. As per the report, Medbox reported cash of $101,000. The current liabilities stood at $11.5 million. The annual net revenue came at $629,000 whereas the annual net loss widened to $16.5 million. The revenue declined 69% YOY, even when the financial results are compared with the restated results.
The decline
Medbox net loss for FY2014 is staggering at more than $16 million. The general and administrative expenses have surged almost 280%. The report states the costs linked with the company’s latest stock compensation plan amounted to $4.4 million. Also, the expenses increased due to $1 million of additional legal costs incurred due to the SEC and other investigations. The probe was related with the erroneous reports submitted initially by the company.
The reasons
Medbox states that the increase in losses was a result of varying factors. The revenue declined sharply compared to last year. Also, there were additional costs related with being a public company. The rise in interest expenses liked with convertible debentures, financing costs, licenses fees in new market, higher marketing and sales expenses added to the company woes.
The restated results
Few days ago, Medbox Inc (OTCMKTS:MDBX) submitted the restated results for FY2012 and FY2013. As per the previous report of 1Q2014, revenue stood at $331,000 which came at negative $8,000 in restated results. In last trading session, Medbox shares declined more than 7% to close at $1.53.
