On Monday’s trading session, Medbox Inc (OTCMKTS:MDBX) share price opened higher only to erase gains and close with a loss of 4.35%. The stock price made an attempt to close in green before the close of trading session, but failed and closed with decline of $0.06 at $1.32. The share volume was 301,706 compared to average daily volume of 274,875.
The financials
Medbox recorded consolidated net loss of approximately $16.54 million in FY2014 compared to a net loss of approximately $3.79 million for the same period in FY2013. The increase in net loss was due to several factors. The loss surged due to decline in revenue. There was significant rise in expenses due to higher non-cash stock based compensation. In addition, the company had to record higher interest expenses resulting from use of convertible debentures that had a high financing cost.
The costs
There was increase in other expenses linked with being a publicly traded firm and expenses related with the SEC filings and Department of Justice problem. The company had to incur these expenses to restate the financial numbers. It even pursued new business opportunities in new markets following which the company had to pay for new licenses. The revenue was affected due to expenses linked with re-valuing of slow moving inventory of the traditional vaporizers and rise in sales and marketing expenses.
The other information
In FY2014, Medbox Inc (OTCMKTS:MDBX) appointed a new CFO and Chief Executive and even reframed its Board of Directors. In order to get talent executives to management and the Board, it launched a impressive stock compensation plan that resulted in $4.4 million in operating costs. The revenue model drafted for FY2014 was different from FY2013. The company is transiting from the old model of getting licenses for customers for a one-time fee. It intends to change it to consulting contracts that would be applicable for a longer period.
