Medbox Inc (OTCMKTS:MDBX) has found itself in quiet a few problems, resulting in repeated losses to the company’s stock. One of the company’s investors has filed a lawsuit against certain members of the board. Additionally, the company’s ticker started the year off at a share price of $6, but half year through, the stock has lost more than 90% of its value.
The lawsuit states that certain directors of the company have been lying about the financial health of MDBX and misleading investors into buying their stock. The case concerns shares bought before November 20, 2013 and any investors who still hold these shares can contact the Shareholders Foundation for assistance. The lawsuit states that the directors had been recognizing revenues on contracts, before they were even earned. This led to overstatement of revenues and inflated stock prices for MedBox.
The truth about the finances, however, came in bits of disclosures by the company, long after the benefits of the false statements had been reaped. The directors have agreed to amend the financial statements from 3Q2013 up to 4Q2014. The fraud has left the company with very little investor trust. Most investors are trying to get away from MDBX, which is showing no signs of recovery. One of the most honest filings by the company was its 1Q2015, which showed the true picture of the company.
In its 1Q2015, the company reported $92,000 in cash, $1.48 million in assets and just $41,000 in quarterly revenues. On the other hand, company liabilities stood at $10.27 million, with a quarterly net loss of $4.43 million. Subsequently, investor confidence in MDBX is at an all time low. Medbox has tried to lift the ticker with a series of press-releases and presentations on various forums, but to no avail.
Medbox Inc (OTCMKTS:MDBX) ended the July 1 session with a loss of 10.16% to its share value, after experiencing a trade volume of 1.76 million. The stock closed at $0.115 at the final bell.