Medbox Inc (OTCMKTS:MDBX) has been on a roller-coaster ride from past few weeks. A couple of weeks ago, the stock price jumped more than 17% to touch the level of $1.65. The sharp gains came after the company reported its annual report for FY2014. It filed its 10-K report after the market close. However, it was a bug disappointment for the investors as well as the market. The financials were nowhere close to satisfactory. It was the prime reason the euphoria linked to results disappeared in last week. It is important to note that the company reported restated financial numbers last month.
The number game
Analyzing the last annual report, the condition of Medbox looks dismal. As per the report, the company recorded cash of just $101,000. The annual net revenue was close to $629,000 while annual net loss was $18.5 million. Medbox reported current liabilities of $11.5 million. The revenue declined sharply 69% YOY. The annual revenue as compared to the restated numbers is much below expectations.
The other details
Medbox Inc (OTCMKTS:MDBX) annual report shows that the G&A expenses of the company have run rampant. They have surged more than 280% in the mentioned period. The higher expenses can be credited to the new stock compensation plan amounting to more than $4 million in FY2014. Also, there were several other legal costs included in the report. The most notable expense was $1 million as legal expenses connected with the SEC and DoJ probe.
The main concern with Medbox is problem of restated numbers. As per the filed numbers, there was huge percentile difference between the actual figures and erroneous reported figures. The financial state of the company looks direr after the restated numbers. The cumulative net loss for FY2013 and FY2012 came at $5.54 million. The errors reported were massive and poses a question on credibility of the company.