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Medbox to restate financial statements

Dec. 30, 2014 8:52 AM ETNotis Global, Inc. (NGBL) StockBy: Douglas W. House, SA News Editor
  • Medication dispensing equipment maker Medbox (MDBX) plans to amend and restate its financial statements for the year 2013, Q3 and Q4 of 2013 and the first three quarters of 2014. The statements for the Q1 and Q2 2013 and full-year 2012 may also require revision.
  • In October, the BOD appointed a special board committee to investigate a federal grand jury subpoena that was served upon the firm's accountants and alleged wrongdoing by a former employee. The company itself was subsequently served by subpoenas from the federal grand jury. The SEC became involved after receiving a letter from a Medbox ex-employee.
  • It appears that revenues were recognized too soon on certain customer contracts. Up-front payments will now be amortized over the longer of the contract period or the customer relationship and revenue will be deferred until key contingencies are removed and it is clear that the revenue is earned per GAAP and SEC regulations.
  • The situation permits the Medbox's existing lenders to trigger default remedies but they have deferred taking action pending discussions on refinancing the company.
  • MDBX is down 13% premarket on turnover of 750 shares.

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