Medbox Inc (OTCMKTS:MDBX) posted a condensed consolidated net loss of nearly $4.434 million in 1Q2015 compared to $1.658 million in 1Q2014. The increase in net loss of nearly $2.776 million was due to jump in general and administrative costs. However, it was offset by a jump in other income recorded from the change in fair value of derivative liability. The net loss also surged due to the amortization of the debt discount offset by decline in cost of revenue.
The plans
Medbox is in the process of changing its business model to offer support and management services for customers. During the transition period, expenses to obtain new licenses and contracts are incurred and revenue is postponed mainly until new licenses are acquired and new cultivation centers and dispensaries commence operating.
In 3Q2014, Medbox reported a new stock compensation program to attract talent to its “Board” and the management team. The plan increased operating costs stock compensation cost of nearly $2.512 million for the quarter. The other factors accountable for increase in operating expense were higher public company expenses such as the professional fees paid for restatements, and periodic filings with the U.S. SEC.
The highlights
Medbox Inc (OTCMKTS:MDBX) stated that the business comprises contracting with business heads for specific services and the sale of cannabis-related products like Medbox dispensing system and tabletop medical vaporizers. The company anticipates to transition to the sale of new portable line of vaporizers in 2Q2015. The business model was commenced with finalizing one-time consulting deals to help customers get a license to grow or sell marijuana and to help them with the set up of a location for new business.
In last trading session, the stock price of MDBX declined more than 11% to close the trading session at $0.128. The decline came at a share volume of 1.73 million compared to average share volume of 698,760.
