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Medbox Inc (OTCMKTS:MDBX) Files First Annual Report

Medbox Inc (OTCMKTS:MDBX) stock price surged more than 17% to $1.65 after the marijuana dispensing company filed its first annual report. It is first regulatory filing after it announced restated financials earlier in the month.

The performance

Medbox posted consolidated net loss of $16.5 million for the year ended December 31, 2014 compared to a loss of $3.7 million for the same period of 2013. The increase in losses was due to several factors including rise in non-cash stock based compensation, reduction in revenue, rise in expenses associated with being a public company and rise in interest expenses associated with convertible debentures with a high financing cost. The other reasons are costs related to getting licenses in new markets, increase in marketing and sales expenses and many others.

The changes

In FY2014, Medbox Inc (OTCMKTS:MDBX) hired a new CFO and CEO and reelected its Board of Directors. The Company also designed a new stock compensation plan to attract new talent to management. The new compensation plan added $4.4 million to operating costs. The revenue model in FY2014 is different from 2013 as Medbox is moving away from the business model of getting licenses for customers for a one-time upfront fee. It is in the process of changing its business model to offer ongoing support and management services for customers so that consulting contracts are valid over a longer period.

The other details

Medbox said that it acquired subsidiary Vaporfection International, Inc. in April, 2013. The expenses of subsidiary did not exist for 1Q2013, but were covered in total sum for FY2014. For the year ended December 31, 2014, Medbox’s consolidated net revenues declined by $1.4 million compared to the same period of 2013. The referral fees revenue rose by $203,165 whereas there was a drop in build outs and consulting revenue by $1.61 million.

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