Medbox Announces First Quarter 2014 Financial Results - WFSB 3 Connecticut

Medbox Announces First Quarter 2014 Financial Results

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SOURCE Medbox, Inc.

LOS ANGELES, May 15, 2014 /PRNewswire/ -- Medbox, Inc. (OTCQB: MDBX) (www.medbox.com), a leader in providing consulting services and patented medicine storage and dispensing systems to the medical and retail industries, today announced financial results for the first quarter of 2014.

Recent Operational Highlights:

  • Medbox established six new subsidiaries in marijuana research and development, real estate investments, dispensary management, banking, armored car transport, and strategic investments in other public companies that have shown promise in the ancillary service sector of the burgeoning marijuana industry.
  • Company transitioned to OTCQB tier of the OTC markets, providing greater liquidity to shareholders.
  • On March 24, 2014, the Form 10 registering Medbox's shares of common stock became effective with the Securities and Exchange Commission and Medbox is now a fully-reporting public company.
  • The Company issued a one-for-one restricted common dividend in February 2014.
  • Began providing company information via S&P Capital IQ Corporation Records Listing Program to increase visibility to the institutional investment community.
  • Added two notable independent directors to the board in Amb. Ned L. Siegel and Mitch Lowe.

"We continued to establish the company as the leader in the rapidly growing legitimate marijuana industry while increasing our transparency to the investment community and position in the capital markets," commented Dr. Bruce Bedrick, Chief Executive Officer of Medbox. "As this industry continues to evolve and redefine itself, Medbox is strategically positioned as the partner of choice with a growing array of solutions, technologies and services."

Dr. Bedrick continued, "Across the country, states and municipalities evolve regulations regarding medical and recreational marijuana, and often struggle with the best ways to manage this change and address reasonable concerns. The results we are reporting today are somewhat overshadowed by accounting provisions necessitated by changes in the business and legal environment in one of the markets in which we operate. Medbox stands at the forefront of this industry, offering solutions that help dispensary operators and cultivators maintain compliance and records that exceed regulatory requirements."

First Quarter Financial Results

First quarter gross revenues were $1.3 million, a 3.9% increase compared to $1.2 million in the first quarter of 2013. Due to changes in a final adopted ordinance in the San Diego market, the total number of licenses to be awarded by the city was reduced by over 75% as well as the likelihood of securing properly zoned locations. As a result of not being able to satisfy the demand of the company's clients in that market, Medbox recorded a provision for sales allowances of approximately $963,000, resulting in a reduction of revenues for the quarter.

Matthew Feinstein, Vice President at Medbox, Inc. commented, "The City of San Diego's zoning rules have significantly reduced the total number of licenses being awarded. In the short term, this will impact our ability to fulfill some of our contracts in the region. However, this decision will ultimately be a positive for us, as it will make those licenses ultimately awarded far more valuable due to continued strong demand and a smaller supply. We remain confident that we will secure a fair share of licenses awarded for our clients and assist our clients with professional management and oversight of those entities on a perpetual basis. The continued changes in the industry will help us in the long term as we perfect our revenue generating abilities, even as they provided challenges in the short term."

Total selling, general and administrative expenses were $713,000 compared to total selling, general and administrative expenses of $955,000 in the same period last year. The loss from operations for the year was $(1.3) million, or $(0.04) per basic and $(0.03) per diluted share compared to a loss from operations of $(330,000) last year, or $(0.01) per basic and diluted share in the same period last year.

Sales and marketing expenses for the three months ended March 31, 2014 and 2013 were $142,000 and $254,000, respectively. Sales and marketing expenses represented 10.9% and 20.4% respectively, of gross revenues, before the provision of sales returns.   The decrease is due primarily to expenses related to Kind Clinics in the first quarter of 2013, which were non-recurring.

Net loss for the first quarter of 2014 was $(1.3) million or $(0.04) per basic and $(0.03) per diluted share, compared to a net loss of $(330,380) or $(0.01) per basic and $(0.01) per diluted share for the first quarter of 2013.

Balance Sheet

As of March 31, 2014, the Company had $2.0 million in cash and $443,000 in marketable securities. As referenced in a Form 10a filed with the Securities and Exchange Commission, the Company increased its cash position compared to December 31, 2013 through sales of stock to accredited investors.

About Medbox, Inc:

Medbox is a leader in the development, sales and service of automated, biometrically controlled dispensing and storage systems for medicine and merchandise. Headquartered in Los Angeles, Medbox, through its wholly owned subsidiary, Medicine Dispensing Systems, offers their patented systems, software and consulting services to pharmacies, alternative medicine dispensaries and local governments in the U.S. In addition, through its wholly owned subsidiary, Vaporfection International, Inc. (www.vaporfection.com), the company offers an industry award winning medical vaporizer product. Medbox, through its newly established subsidiaries, is in development of the following ancillary services catered to the alternative medicine industry: merchant services and armored transport for cash deposits, cannabidiol research and development, real estate acquisitions and subsequent lease programs to alternative medicine dispensaries, and alternative medicine dispensary management services.

Forward-Looking Statements: The statements in this press release constitute forward-looking statements within the meaning of federal securities laws. Such statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, such forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Potential risks and uncertainties include, but are not limited to, technical advances in the industry as well as political and economic conditions present within the industry. We do not take any obligation to update any forward-looking statement to reflect events or developments after a forward-looking statement was made.

Medbox, Inc. is a publicly traded company, and is quoted on the OTCQB, ticker symbol MDBX.

For more information on Medbox, please contact (800) 762-1452 or go online to: http://www.medbox.com

Contacts: 
Investor Relations:
Stephen Hart 
Hayden IR 
+1- 917-658-7878 
hart@haydenir.com 

Tables to follow

MEDBOX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013

(UNAUDITED)





































Revenues:








March 31, 2014


March 31, 2013

Gross Revenues







$         1,294,550


$         1,245,522

Provision for sales refunds





(962,780)


-

Net, revenue








331,770


1,245,522

Cost of revenues







891,920


620,060













Gross profit








(560,150)


625,462













Selling, general and administrative expenses






Selling and marketing






141,554


254,252

Research and development





8,000


8,500

General and administrative









563,370


692,682

Total selling, general and administrative expenses

712,924


955,434













Loss from operations






(1,273,074)


(329,972)













Other income (expense), net





13,652


(408)













Loss before provision for income taxes




(1,259,422)


(330,380)













Provision for income taxes






-


-













Net loss








$        (1,259,422)


$          (330,380)













Earnings per share attributable to common stockholders




Basic








$               (0.04)


$               (0.01)

Diluted








$               (0.03)


$               (0.01)

Weighted average shares outstanding







Basic








30,516,271


27,957,406

Diluted








45,516,271


45,290,739






MEDBOX, INC.

CONSOLIDATED BALANCE SHEETS AS OF

MARCH 31, 2014 (UNAUDITED) AND DECEMBER 31, 2013




























(Unaudited)



Assets


March 31, 2014


December 31, 2013

Current assets:





Cash and cash equivalents


$             1,977,756


$              168,003

Marketable securities


442,904


184,800

Accounts receivable, net of valuation adjustment

 of $561,855 and $0


1,319,461


1,864,506

Notes receivable


-


115,000

Inventory


1,069,156


1,269,454

Prepaid expenses and other current assets


260,622


89,241

Total current assets


5,069,899


3,691,004











Property and equipment, net of accumulated depreciation of 28,203 and 21,123, respectively


198,532


169,128











Investments, at cost


1,200,000


1,200,000

Intangible assets, net of accumulated amortization





of $44,375 and 32,750 respectively


735,598


653,959

Note receivable


130,000


-

Goodwill


1,100,037


1,090,037

Deposits and other assets


99,662


98,726

Total assets


$             8,533,728


$           6,902,854











Liabilities and stockholders' equity





Current liabilities:





Accounts payable and accrued expenses


$               535,686


$             598,314

Notes payable


-


75,000

Related party notes payable


16,674


111,794

Customer deposits


538,311


203,186

Provision for customers refunds


222,925


-

Short term loan payable


122,135


-

Total current liabilities


1,435,731


988,294











Long term-debt, less current portion


-


-

Total liabilities


1,435,731


988,294











Stockholders' equity





     Preferred stock, $0.001 par value: 10,000,000 authorized;  3,000,000 and 6,000,000 issued and outstanding as of March 31, 2014 and  December 31, 2013, respectively


3,000


3,000

     Common stock, $0.001 par value: 100,000,000 authorized, 30,011,580 and 29,525,750 issued and outstanding as of March 31, 2014 and December 31, 2013, respectively


30,012


29,526

Additional paid-in capital


9,212,731


6,785,358

Common stock subscribed


-


(15,000)

Retained earnings (accumulated deficit)


(2,147,746)


(888,324)

Total stockholders' equity


7,097,997


5,914,560

Total liabilities and stockholders' equity


$             8,533,728


$           6,902,854





















See notes to consolidated financial statements.

 

 

 

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