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Dec. 30, 2014, 8:52 AM
- Medication dispensing equipment maker Medbox (OTCQB: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.
Feb. 18, 2014, 10:41 AM
- Citron Research accuses Medbox (MDBX -2.7%) of taking part in "multiple frauds," and declares shares of the marijuana dispensing machine/consulting services provider to be "worthless."
- Citron observes Medbox announced last April it had Q1 2013 revenue "well in excess of $2 million," but reported Q1 revenue of only $1.75M in an SEC filing the following month.
- The firm also claims only one Massachusetts Medbox client has seen its dispensary application reach Phase 2, and the the client had their leased signed over to them by Medbox. In addition, the company and founder Vincent Mehdizadeh are accused of engaging in a number of related-party transactions.
- Citron's report (.pdf)
- Previous: Marijuana stocks rally after banking rules set
Feb. 14, 2014, 4:04 PM
- Volatile marijuana stocks have closed with big gains after the Treasury Dept. and deputy U.S. attorney general established banking regulations for licensed sellers. Notable gainers: MDBX +21.8%. MJNA +5.1%. GRNH +4.3%. AVTC +10.4%. MWIP +7.6%. HEMP +1.7%.
- The rules allow banks to do business with marijuana sellers deemed to be obeying state laws, and not running afoul of eight principles, which include selling to minors and trafficking marijuana to states where it's illegal to do so. However, banks will have to file suspicious activity reports detailing transactions made by marijuana vendors.
- The National Cannabis Industry Association calls the ruling, which comes six weeks after Colorado began legal marijuana sales, a "huge victory." But many observers think top U.S. banks will still tread cautiously.
- FINRA has issued a warning about potential marijuana stock scams.
Jan. 9, 2014, 5:25 PM
- Medical Marijuana (MJNA +4.3%) is up 25% YTD on the pink sheets as investors continue making speculative bets on pot-related plays following the start of legal marijuana sales in Colorado on Jan. 1.
- On the other hand, several peers gave back a big chunk of their recent gains today: GRNH -52.4%. AVTC -15.8%. MDBX -18.6%. HEMP -24.1%. MWIP -21.9%.
- But GW Pharmaceuticals (GWPH +23.5%), a more established name that yesterday priced a 2.4M-share follow-on offering at $36, went in the other direction.
- With demand outstripping expectations, Colorado is (for now) arguably seeing the marijuana equivalent of the 1970s oil crisis: Long lines, shortages, rationing, and soaring prices have become the norm for licensed dispensaries.
- Words of caution from seasoned investors about putting money into pot plays are easy to find. Fund manager Frank Igarra: "There might be one or two that survive, but having seen crazes like this, people have been burned by them a lot. The average investor should think twice."
- FINRA issued a warning in August about potential marijuana stock scams.
Jan. 7, 2014, 3:26 PM
- Shares of AVT (AVTC +125.2%) and Medbox (MDBX +65.5%) shares surge on continued marijuana-legalization news euphoria, small floats, and an announcement that the 2 companies have worked together to "improve our systems with electronic and biometric locks, which would aid in the safety and security of the marijuana products."
- Medbox has also ordered 2 "containers of machines" from AVT to have a ready supply of machines - Medbox has received "well over 200 machine orders."
Medbox, Inc., a leader in the rapidly emerging cannabis sector, provides specialized services to operators of dispensaries, cultivation centers, manufacturers and research facilities in those states where approved. Through trusted clients and affiliates, the company promotes efficient,... More
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