Friday proved to be a weak session for Medbox Inc (OTCMKTS:MDBX) as the stock prices were hit in last trading hours. The stock declined more than 9% to close at $1.49 on Friday. However, things appeared better on Monday as stock opened in green and didn’t enter in red zone for the entire day. MDBX stock prices surged more than 5% to close at $1.57.
The problems
The green closing for Medbox doesn’t imply that the problems for the company are over. The shareholders are not delighted with the restated numbers. There were numerous errors in revenue report due to which company was forced to restate the financial numbers. The SEC ordered probe into the matter. There are several private law entities that targeted the company due to the huge losses faced by shareholders in last one year. Here, it is important to mention that Medbox stock prices declined from over $20 to below $2 in less than a year.
The financial numbers
Medbox restated reports were nothing more than a shock for shareholders. The restated numbers forced them to think what the company is up to, as the discrepancies were significant and not acceptable. The original 1Q2104 report stated revenue was $331,000 whereas the restated report took the net revenue into negative $8,000. It is a huge error and the company stock prices can see more downside following the numbers. The revenue for FY2012 in previous report was $2.59 million which reduced to $1.17 million in restated report. The revenue for FY2013 in previous report was $5.22 million which came at $2.06 million in restated numbers.
The takeaway
Medbox Inc (OTCMKTS:MDBX) restated numbers send warnings to shareholders as they now would be feeling cheated due to revenue reporting errors. The direct result of lower revenue is higher loss in respective periods. Moreover, all these errors came in light when SEC ordered a probe into the matter.
