Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 12, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Medbox, Inc. | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 30,011,580 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001547996 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $975,027 | $168,003 |
Marketable securities | 321,043 | 184,800 |
Accounts receivable, net of allowance for doubtful accounts of $120,000 and $0, respectively | 1,113,944 | 1,864,506 |
Notes receivable | 0 | 115,000 |
Inventory | 1,545,311 | 1,269,454 |
Prepaid expenses and other current assets | 357,566 | 89,241 |
Total current assets | 4,312,891 | 3,691,004 |
Property and equipment, net of accumulated depreciation of $35,409 and $21,123, respectively | 155,190 | 140,658 |
Investments, at cost | 0 | 1,200,000 |
Intangible assets, net of accumulated amortization of $57,417 and $32,750 respectively | 813,946 | 682,429 |
Note receivable | 155,000 | 0 |
Goodwill | 1,100,037 | 1,090,037 |
Deposits and other assets | 43,662 | 98,726 |
Total assets | 6,580,726 | 6,902,854 |
Current liabilities | ' | ' |
Accounts payable and accrued expenses | 791,698 | 598,314 |
Notes payable | 0 | 75,000 |
Related party notes payable | 516,674 | 111,794 |
Customer deposits | 472,538 | 203,186 |
Provision for customers refunds | 314,940 | 0 |
Short term loan payable | 76,738 | 0 |
Total current liabilities | 2,172,588 | 988,294 |
Stockholders' Equity | ' | ' |
Preferred stock, $0.001 par value: 10,000,000 authorized; 3,000,000 and 3,000,000 issued and outstanding as of June 30, 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 June 30, 2014 and December 31, 2013, respectively | 30,012 | 29,526 |
Additional paid-in capital | 9,212,731 | 6,785,358 |
Common stock subscribed | 0 | -15,000 |
Treasury stock | -1,209,600 | 0 |
Accumulated deficit | -3,628,005 | -888,324 |
Total stockholders' equity | 4,408,138 | 5,914,560 |
Total liabilities and stockholders' equity | $6,580,726 | $6,902,854 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance for doubtful accounts (in Dollars) | $120,000 | $0 |
Property and equipment, accumulated depreciation (in Dollars) | 35,409 | 21,123 |
Intangible assets, accumulated amortization (in Dollars) | $57,417 | $32,750 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 3,000,000 | 3,000,000 |
Preferred stock, outstanding | 3,000,000 | 3,000,000 |
Common stock, par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 30,011,580 | 29,525,750 |
Common stock, outstanding | 30,011,580 | 29,525,750 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Revenue | $434,448 | $1,574,820 | $728,998 | $2,820,342 |
Revenue from related party | 0 | 0 | 1,000,000 | 0 |
Less: allowances and refunds | -266,930 | 0 | -1,229,710 | 0 |
Net revenue | 167,518 | 1,574,820 | 499,288 | 2,820,342 |
Cost of revenue | 548,557 | 181,037 | 1,440,477 | 801,097 |
Gross profit | -381,039 | 1,393,783 | -941,189 | 2,019,245 |
Selling, general and administrative expenses | ' | ' | ' | ' |
Selling and marketing | 286,784 | 161,005 | 430,008 | 415,257 |
Research and development | 67,033 | 10,000 | 75,033 | 18,500 |
General and administrative | 783,415 | 661,451 | 1,345,115 | 1,354,133 |
Total selling, general and administrative expenses | 1,137,232 | 832,456 | 1,850,156 | 1,787,890 |
Income (loss) from operations | -1,518,271 | 561,327 | -2,791,345 | 231,355 |
Other income (expense), net | 11,501 | -5,787 | 25,153 | -6,195 |
Unrealized gain/loss from marketable securities | 26,511 | 0 | 26,511 | 0 |
Income (loss) before provision for income taxes | -1,480,259 | 555,540 | -2,739,681 | 225,160 |
Provision for income taxes | 0 | 90,060 | 0 | 90,060 |
Net income (loss) | ($1,480,259) | $465,480 | ($2,739,681) | $135,100 |
Earnings per share attributable to common stockholders | ' | ' | ' | ' |
Basic (in Dollars per share) | ($0.05) | $0.03 | ($0.09) | $0.01 |
Diluted (in Dollars per share) | ($0.03) | $0.02 | ($0.06) | $0 |
Weighted average shares outstanding | ' | ' | ' | ' |
Basic (in Shares) | 30,531,365 | 28,705,243 | 30,523,860 | 28,333,390 |
Diluted (in Shares) | 45,531,365 | 43,540,408 | 45,523,860 | 44,410,738 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Common Stock Subscribed [Member] | Retained Earnings [Member] | Total |
Balances at Dec. 31, 2012 | $6,000 | $27,367 | $0 | $1,150,673 | ($153,250) | ($331,669) | $699,121 |
Balances (in Shares) at Dec. 31, 2012 | 6,000,000 | 27,367,144 | ' | ' | ' | ' | ' |
Issuance of common stock, net of issuance costs | ' | 2,115 | ' | 4,484,426 | ' | ' | 4,486,541 |
Issuance of common stock, net of issuance costs (in Shares) | ' | 2,115,100 | ' | ' | ' | ' | ' |
Cancellation of preferred stock | -3,000 | ' | ' | 3,000 | ' | ' | ' |
Cancellation of preferred stock (in Shares) | -3,000,000 | ' | ' | ' | ' | ' | ' |
Proceeds from common stock subscribed | ' | ' | ' | -138,250 | 138,250 | ' | ' |
Issuance of warrants for acquisition of Vaporfection | ' | ' | ' | 1,166,000 | ' | ' | 1,166,000 |
Issuance of common stock for accounts payable | ' | 44 | ' | 119,509 | ' | ' | 119,553 |
Issuance of common stock for accounts payable (in Shares) | ' | 43,506 | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | ' | -556,655 | -556,655 |
Balances at Dec. 31, 2013 | 3,000 | 29,526 | 0 | 6,785,358 | -15,000 | -888,324 | 5,914,560 |
Balances (in Shares) at Dec. 31, 2013 | 3,000,000 | 29,525,750 | ' | ' | ' | ' | ' |
Issuance of common stock, net of issuance costs | ' | 486 | ' | 2,427,373 | ' | ' | 2,427,859 |
Issuance of common stock, net of issuance costs (in Shares) | ' | 485,830 | ' | ' | ' | ' | ' |
Proceeds from common stock subscribed | ' | ' | ' | ' | 15,000 | ' | 15,000 |
Net loss | ' | ' | ' | ' | ' | -2,739,681 | -2,739,681 |
Treasury stock | ' | ' | -1,209,600 | ' | ' | ' | -1,209,600 |
Treasury stock (in Shares) | ' | ' | -60,000 | ' | ' | ' | ' |
Balances at Jun. 30, 2014 | $3,000 | $30,012 | ($1,209,600) | $9,212,731 | $0 | ($3,628,005) | $4,408,138 |
Balances (in Shares) at Jun. 30, 2014 | 3,000,000 | 30,011,580 | -60,000 | ' | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities | ' | ' |
Net income (loss) | ($2,739,681) | $135,100 |
Adjustments to reconcile net income (loss) to net cash: | ' | ' |
Depreciation and amortization | 38,953 | 26,139 |
Allowances and refunds | 1,325,265 | 0 |
Profit on sale of the investments | -9,600 | 0 |
Value of securities received for services | -98,532 | 0 |
Unrealized gain on marketable securities held for resale | -26,511 | 0 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | -270,963 | 353,306 |
Loan receivable | 0 | -55,000 |
Inventories | -275,857 | -909,619 |
Prepaid expenses and other assets | -213,261 | -149,584 |
Accounts payable and accrued expenses | 193,384 | 186,494 |
Taxes payable | 0 | 90,060 |
Customer deposits | 269,352 | 0 |
Deferred revenue | 0 | -537,479 |
Net cash used in operating activities | -1,807,451 | -860,583 |
Cash flows from investing activities | ' | ' |
Issuance of note receivable | -40,000 | 0 |
Purchase of property and equipment, net | -28,818 | -193,593 |
Purchase of intangible assets | -166,184 | 0 |
Advances for investments | 0 | -1,200,000 |
Net cash used in investing activities | -235,002 | -1,393,593 |
Cash flows from financing activities | ' | ' |
Related party notes payable, net | 404,880 | -869,038 |
Payments on long term loan | 0 | -58,137 |
Short term loan, net | 76,738 | 0 |
Payments on notes payable | -75,000 | 0 |
Proceeds from issuance of common stock, net | 2,442,859 | 2,537,015 |
Net cash provided by financing activities | 2,849,477 | 1,609,840 |
Net increase in cash | 807,024 | -644,336 |
Cash, beginning of period | 168,003 | 1,026,902 |
Cash, end of period | 975,027 | 382,566 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 2,872 | 6,731 |
Cash paid for income taxes | 0 | 9,068 |
Non- cash transactions: | ' | ' |
Liabilities assumed for Vaporfection International, Inc. | 0 | 469,000 |
Common stock warrants issued for Vaporfection International, Inc. | $0 | $1,166,000 |
NOTE_1_BUSINESS_ORGANIZATION_N
NOTE 1 - BUSINESS ORGANIZATION, NATURE OF OPERATIONS | 6 Months Ended | |
Jun. 30, 2014 | ||
Disclosure Text Block [Abstract] | ' | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' | |
NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS | ||
Medbox, Inc. (the “Company”) was incorporated in the state of Nevada on June 16, 1977, originally as Rabatco, Inc., subsequently changing its name on May 12, 2000 to MindfulEye, Inc., and again on August 30, 2011 to Medbox, Inc. The Company, through its subsidiaries Prescription Vending Machines, Inc. (“PVM”), Medicine Dispensing Systems, Inc. (“MDS”), Medbox Rx, Inc. and Medbox Technologies, Ltd. (“MT”), is a leader in providing consulting services and patented biometrically controlled medicine storage and dispensing systems to the medical and retail industries. The Company, through its wholly owned subsidiary, Vaporfection International, Inc. (“VII”), sells a line of vaporizer and accessory products online and through distribution partners. The Company provides management oversight and compliance services for retail dispensaries and cultivation facilities through its Medbox Management Services, Inc. subsidiary. In addition, the Company procures real estate and enters into leases for retail dispensaries and cultivation centers through its real estate subsidiaries of Medbox Property Investments, Inc. and its wholly owned subsidiary, MJ Property Investments, Inc. The Company is headquartered in West Hollywood, California with offices in Arizona and Florida. | ||
On December 31, 2011, Medbox, Inc. entered into a Stock Purchase Agreement with PVM International, Inc. (“PVMI”). Pursuant to two separate closings held on January 1, 2012 and December 31, 2012, the Company acquired from PVMI all of the outstanding shares of common stock of (i) Prescription Vending Machines, Inc., (ii) Medicine Dispensing Systems, Inc. (our Arizona subsidiary), and (iii) Medbox, Inc. (our California subsidiary that is currently inactive) (these three listed subsidiaries are hereafter referred to as the “PVMI Named Subsidiaries”), in exchange for two million shares of the Company’s common stock and a $1 million promissory note. | ||
The transaction between Medbox, Inc. and PVMI is deemed to be a reverse acquisition, where Medbox, Inc. (the legal acquirer) is considered the accounting acquiree and the PVMI Named Subsidiaries (the legal acquiree) are considered the accounting acquirer. The assets and liabilities are transferred at their historical cost with the capital structure of Medbox, Inc. Medbox, Inc. is deemed a continuation of the business of PVMI Named Subsidiaries and the historical financial statements of PVMI Named Subsidiaries are the historical financial statements of Medbox, Inc. For accounting purposes, the reverse merger is treated as a recapitalization of Medbox, Inc. | ||
The Company’s subsidiary, Prescription Vending Machines, Inc. was incorporated in the state of California in 2008 and our subsidiary, Medicine Dispensing Systems, Inc. was incorporated in the state of Arizona in 2011. | ||
On March 22, 2013, the Company entered into a Securities Purchase Agreement with Vapor Systems International, LLC to acquire 100% of the outstanding common stock of VII in exchange for warrants to purchase 260,854 shares (before stock dividend) of the Company’s common stock. In addition, the Company agreed to provide up to $1,600,000 in working capital to VII at the Company’s sole discretion which included $175,000 paid to the inventor of certain patents including a warrant to purchase 5,000 shares (before stock dividend) of the Company’s common stock. This transaction was closed in April 2013. | ||
On December 9, 2013 Medbox formed Medbox Technologies Ltd (MT), a Canadian corporation to operate as a consulting sales and marketing operation in Canada. As of June 30, 2014 there was no activity for this company. | ||
On April 9, 2014, the Company formed six new subsidiaries, as follows: | ||
· | Medbox CBD, Inc., specializing in hemp-oil concentrates and development of pharmaceutical products derived from cannabis to produce and distribute products based upon lifting of federal prohibitions of such activities. | |
· | Medbox Property Investments, Inc., specializing in real property acquisitions and leases to dispensaries and cultivation centers. | |
MJ Property Investments, Inc. specializing in real property acquisitions and leases to retail stores and cultivation centers in the state of Washington. (This is a wholly owned subsidiary of Medbox Property Investments, Inc.) | ||
· | Medbox Management Services, Inc., specializing in dispensary management services to State licensed dispensaries for cultivation, dispensing, and marijuana infused products (MIPS). | |
· | Medbox Merchant Service, Inc., specializing in banking transactions with prepaid debit cards, convenience checks, and cash depository needs for operators. | |
· | Medbox Armored Transport, Inc., specializing in armored car transport of cash from dispensaries to participating banks. | |
· | Medbox Investments, Inc., specializing in investments and strategic partnerships in other public companies in the marijuana ancillary service sector that Medbox believes are viable and have growth potential. | |
In order to obtain the license for one of the Company’s clients the Company registered a nonprofit corporation Allied Patient Care, Inc. in the state of Oregon. | ||
NOTE_2_SUMMARY_OF_SIGNIFICANT_
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||||||||||||||
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||||||
The consolidated financial statements include the accounts of Medbox, Inc. and its wholly owned subsidiaries, PVM, MDS, VII, MT, Medbox Rx, Inc. (Rx), Medbox CBD, Inc., Medbox Property Investments, Inc., MJ Property Investments, Inc., Medbox Management Services, Inc., Medbox Merchant Service, Inc., Medbox Armored Transport, Inc., and Medbox Investments, Inc. All intercompany transactions have been eliminated. | ||||||||||||||||||||||||||
Medbox CBD, Inc., Medbox Property Investments, Inc., MJ Property Investments, Inc., Medbox Management Services, Inc., Medbox Merchant Service, Inc., Medbox Armored Transport, Inc. and Medbox Investments, Inc., represents additional subsidiaries included in the consolidated financial statements for the year 2014. | ||||||||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||||||||
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements as well as the reported expenses during the reporting periods. The Company’s significant estimates and assumptions include the valuation of the Company’s common stock used in the valuation of goodwill, accounts receivable and note receivable collectability, inventory, advances on investments, the valuation of restricted stock and warrants received from customers, the amortization and recoverability of capitalized patent costs and useful lives of long-lived assets, and income tax expense. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from these estimates. | ||||||||||||||||||||||||||
Concentrations of Credit Risk | ||||||||||||||||||||||||||
The Company maintains cash balances at several financial institutions in the Los Angeles, California area and Florida. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. At June 30, 2014 and December 31, 2013, the Company’s uninsured balances totaled $432,261 and $0, respectively. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. | ||||||||||||||||||||||||||
At June 30, 2014 and December 31, 2013, three (3) customers, one of which is a related party through the entity’s stock ownership in the Company (customer B) represented 78.0% and 37.5% of outstanding receivables, respectively. | ||||||||||||||||||||||||||
30-Jun-14 | January - June, 2014 | 31-Dec-13 | ||||||||||||||||||||||||
Customer | Accounts Receivable | Gross Revenue | Accounts Receivable | |||||||||||||||||||||||
Amount, $ | % | Amount, $ | % | Amount, $ | % | |||||||||||||||||||||
A | 586,824 | 47.6 | - | - | 700,000 | 37.5 | ||||||||||||||||||||
B | 200,000 | 16.2 | 1,000,000 | 57.8 | - | 0 | ||||||||||||||||||||
C | 175,000 | 14.2 | 175,000 | 10.1 | - | - | ||||||||||||||||||||
Subtotal | 961,824 | 78 | % | 1,175,000 | 67.9 | 700,000 | 37.5 | % | ||||||||||||||||||
Total, gross | 1,233,944 | 100 | % | 1,728,998 | 100 | 1,864,506 | 100 | % | ||||||||||||||||||
Advertising and Marketing Costs | ||||||||||||||||||||||||||
Advertising and marketing costs are expensed as incurred. The Company incurred advertising and marketing costs of $286,784 and $161,005 for the three months ended June 30, 2014 and 2013, and $430,008 and $415,257 for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Research and Development | ||||||||||||||||||||||||||
Research and development expenses are charged to operations as incurred. The Company incurred research and development costs of $67,033 and $10,000 for the three months ended June 30, 2014 and 2013, and $75,033 and $18,500 for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||||||||
Pursuant to ASC No. 825, Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying value of cash, accounts receivable, other receivables, inventory, accounts payable and accrued expenses and notes payable approximate their fair value due to the short period to maturity of these instruments. The Company’s marketable securities and related customer deposits require fair value measurement on a recurring basis as the Company has received advance payment of restricted stock in a publicly traded company for contracted services and received warrants for service provided to unrelated third party. The Company has no exposure to gain or loss on the increase or decrease in the value of the marketable securities received as a payment from customer as any shortfall in the ultimate liquidated value of the securities will be supplemented by additional restricted stock from the customer and any liquidation in excess above the Company’s billings will be returned to the customer. The securities received as a payment for services provided will be exposed to gains or losses following their initial evaluation as of the date the revenue was earned. | ||||||||||||||||||||||||||
Warrants and other financial assets received as a payment for the services provided are recorded as “Marketable securities” under the current assets if they are expected to be realized within 12 months. The Company uses the Black-Scholes model to measure the value of the warrants. At each reporting date the Company will reevaluate the value of marketable securities and record any changes in value to other income (expense) under “Unrealized gain or losses from marketable securities”. | ||||||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||||||
The Company applies the revenue recognition provisions pursuant to Accounting Standards Codification 605, Revenue Recognition (“ASC 605”) (formerly SAB Topic 13A), which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. The guidance outlines the basic criteria that must be met to recognize the revenue and provides guidance for disclosure related to revenue recognition policies. | ||||||||||||||||||||||||||
The Company recognizes revenue related to consulting fees based upon the terms of the contract. In general, the Company recognizes revenue when a milestone is reached in the contract such as submittal of the license application, awarding of a license or securing the location. In addition, if the contract includes the build out of the client location and the installation of Medbox dispensing machines then the remainder of the revenue is recognized when the facility is completed and available for move-in by the client. The contract terms are broken down in specific milestones with specific attributable revenue to be earned upon successful completion of the milestone terms (i.e. if a milestone is obtaining the license, the condition for the revenue to be recorded is after obtaining the license for the client and the Company will record a specified amount of revenue attributable to this milestone based on the contract). All milestones from the consulting agreements are considered to be substantive for revenue recognition and the revenue is recorded when the work/condition described is performed/achieved. Advance payments from clients in advance of work performed are recorded as customer deposits on the balance sheet. | ||||||||||||||||||||||||||
An allowance for bad debts is established for any customer who is deemed as possibly uncollectible. Equipment sales not associated with a consulting contract are recognized as the product is shipped and title passes. | ||||||||||||||||||||||||||
Provisions for estimated returns and allowances, and other adjustments are provided in the same period the related sales are recorded. The Company will at times allow customers to receive full refunds should regulatory events prevent the customer from being able to operate his contracted location. The provision for returns as well as an allowance for doubtful accounts will be included in the Company’s balance sheet as determined by management. For the year ended December 31, 2013 management determined that no allowances were necessary as there were no known events to create a basis for such provision. During the first quarter of 2014, due to changes in legislation in the San Diego market where the number of licenses were reduced from 130 to 32, the Company determined that it will not be able to perform all the contracts. As a result, the Company reduced revenue through a recording of a provision for sales allowances and refunds for the six months ended June 30, 2014 of $1,229,710. In addition, see Note 9. | ||||||||||||||||||||||||||
Revenue for services with a payment in form of warrants or other financial assets are recognized when the services are performed. The value of revenue is measured using the Black-Scholes model for warrants. | ||||||||||||||||||||||||||
Unrealized gain or loss from marketable securities occurs in the process of the reevaluation of the warrants or other financial assets after their initial recognition valuation. At each reporting date the Company reevaluates the value of marketable securities and reflects the change in the statement of operations under the caption “Unrealized gain or losses from marketable securities”. | ||||||||||||||||||||||||||
Cost of Revenue | ||||||||||||||||||||||||||
Cost of revenue consists primarily of expenses associated with the delivery and distribution of our products and services. These include expenses related to the manufacture of our dispensary units, construction expense related to the customer dispensary, site selection and establishment of licensing requirements, and consulting expense for the continued management of the dispensary unit build out, server and security equipment, rent expense, energy and bandwidth costs, and support and maintenance costs prior to when the client moves in. Cost of revenues also includes costs attributed to previously capitalized costs associated with the process of license procurement in targeted markets that are initially inventoried and then allocated among the licenses which the Company helps procure and charged to cost of revenue in the same period that the associated revenue is earned. In the case where it is determined that no licenses will be awarded to the Company or if the previously inventoried costs are in excess of the projected net realizable value of the sale of the licenses then the excess cost above net realizable value is written off to cost of revenues. In addition, cost of revenue related to our vaporizer line of products consists of direct procurement cost of the products along with costs associated with order fulfilment, shipping, inventory storage and inventory management costs. | ||||||||||||||||||||||||||
Basic and Fully Diluted Net Loss Per Share | ||||||||||||||||||||||||||
Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted average number of shares of common stock and, if dilutive, potential shares of common stock outstanding during the period from the potential 5 for 1 conversion feature of the Company’s Series A preferred stock outstanding. Potential shares of common stock consist of the incremental shares of common stock issuable upon the exercise of the Company’s 529,016 warrants (presented post stock dividend) to the sellers of VII as the likelihood of exercise is probable do to the low exercise price per share of $0.001 (using the if-exercised method). The computation of basic loss per share for the three month and six months ended June 30, 2014 and 2013 excludes potentially dilutive securities of 30,000 and 15,000 shares, respectively, because their inclusion would be antidilutive. | ||||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, the Company had 3,000,000 shares of Series A preferred stock outstanding with par value of $0.001 that could be converted into 15,000,000 shares of the Company’s common stock. | ||||||||||||||||||||||||||
Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. | ||||||||||||||||||||||||||
For the period ended | For the period ended | |||||||||||||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||||||||||||||
Financing Warrants to purchase common stock | 30,000 | 15,000 | ||||||||||||||||||||||||
Total potentially dilutive securities | 30,000 | 15,000 | ||||||||||||||||||||||||
Accounts Receivable and Allowance for Bad Debts | ||||||||||||||||||||||||||
The Company is subject to credit risk as it extends credit to our customers for work performed as specified in individual contracts. The Company extends credit to its customers, mostly on an unsecured basis after performing certain credit analysis. Our typical terms require the customer to pay a portion of the contract price up front and the rest upon certain agreed milestones. The Company’s management periodically reviews the creditworthiness of its customers and provides for probable uncollectible amounts through a charge to operations and a credit to an allowance for doubtful accounts based on our assessment of the current status of individual accounts. Accounts still outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts. As of December 31, 2013, the Company’s management considered all accounts outstanding fully collectible. During first quarter of 2014, due to changes in legislation in the San Diego market where the number of licenses were reduced from 130 to 32, the Company determined that it will not be able to perform all the contracts. As a result, the Company recorded allowances and refunds of $1,229,710. See also Note 9. In addition, during the second quarter of 2014, after a collectability review of our existing receivables the Company recorded an allowance for doubtful accounts in the amount of $145,000 as a part of general and administrative expense. | ||||||||||||||||||||||||||
Property and Equipment | ||||||||||||||||||||||||||
Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows: | ||||||||||||||||||||||||||
Vehicles | 5 years | |||||||||||||||||||||||||
Furniture and Fixtures | 5 years | |||||||||||||||||||||||||
Office equipment | 3 years | |||||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||||||
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. | ||||||||||||||||||||||||||
In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorizes. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. | ||||||||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||||||||
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | ||||||||||||||||||||||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. | ||||||||||||||||||||||||||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. | ||||||||||||||||||||||||||
Reclassifications | ||||||||||||||||||||||||||
Certain amounts from the 2013 consolidated financial statements have been reclassified to conform to the 2014 presentation. During the second quarter of 2014 the Company reclassified some items of product development costs related to VII’s miVape in the amount of $28,470 from Property and Equipment -“Product development” into the Intangible assets-“IP/Technology/Patents” | ||||||||||||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||||||||||||
There were various accounting updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, consolidated results of operations or cash flows. | ||||||||||||||||||||||||||
NOTE_3_ACQUISITION
NOTE 3 - ACQUISITION | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Business Combination Disclosure [Text Block] | ' | ||||
NOTE 3 – ACQUISITION | |||||
On March 22, 2013, the Company entered into a purchase agreement for 100% of the issued and outstanding common stock of Vaporfection International Inc. (“VII”) owned by Vapor Systems International LLC. The Company closed the transaction on April 1, 2014. The Company issued 260,854 warrants to shareholders of VII allowing them to purchase one (1) share of Medbox common stock at $.001 per share beginning April 1, 2014. These warrants were valued for the Company’s accounting purposes at $4.47 per share which represented the fair value of the Company’s common stock as determined by the Company’s independent appraiser. In addition, the Company assumed certain liabilities and a 10% convertible note of VII in the aggregate amount of approximately $470,000. The total value of the acquisition was approximately $1,635,000 and has been allocated in accordance with ASC 805 as per the Company’s independent valuation as follows: | |||||
Machinery & Equipment | $ | 70,000 | |||
IP and related technology | 287,000 | ||||
Amortizable intangible assets: | |||||
Customer contracts and related relationships | 314,000 | ||||
Trade name, trademark, and domain name | 46,000 | ||||
Non-compete covenants | 23,000 | ||||
Goodwill | 895,000 | ||||
Total assets acquired | 1,635,000 | ||||
Fair value of liabilities assumed | (469,000 | ) | |||
Net fair value | $ | 1,166,000 | |||
The amortizable intangible assets have useful lives not exceeding ten years and a weighted average useful life of seven years. No amounts have been allocated to in-process research and development and $895,000 has been allocated to goodwill. In addition, from the date of acquisition through March 31, 2014 and December 31, 2013, the liabilities assumed have been increased by approximately $10,000 and $195,000 respectively as they have been accrued or settled. No additional adjustments to Goodwill occurred in the three months ended June 30, 2014. Accordingly, $205,000 has also been allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and is not deductible for tax purposes. | |||||
In addition, to the above warrants the purchase agreement and associated consulting contract with the prior management company of the business unit calls for additional shares of common stock to be issued in the event that the performance of the business unit exceeds $11,818,140 of accumulated EBITBA profitability over the subsequent 4 year operating period. The performance payout is contingent upon future events and accordingly has the Company has treated the obtainment of that performance provision as being remote and consequently has not assigned any future value to the purchase price. | |||||
NOTE_4_INVESTMENTS
NOTE 4 - INVESTMENTS | 6 Months Ended |
Jun. 30, 2014 | |
Investments Schedule [Abstract] | ' |
Investment [Text Block] | ' |
NOTE 4 – INVESTMENTS | |
On February 8, 2013, the Company entered into an agreement with Bio-Tech Medical Software, Inc. which would allow the Company to purchase 833,333 shares of common stock which would represent 25% of Bio-Tech’s issued and outstanding shares of common stock for $1,500,000. The Company advanced $600,000 upon execution of this agreement for the right to purchase with the remaining balance of $900,000 due and payable in installments at various dates by August 25, 2013. On June 26, 2013, the Company notified Bio-Tech that it was canceling the agreements with them. | |
On February 27, 2014, the Company signed a settlement agreement, and in connection therewith, a second amended and restated technology license agreement with Bio-Tech. Pursuant to the second amended and restated technology license agreement, the Company received full licensed right to biometric inventory tracking technology for the term of five years with no additional monies due. All stock transfer between companies was canceled and rescinded. | |
On June 5, 2014 the Company entered into a sale agreement with an affiliate company owned by the co-founder of the Company for the sale of all Bio-Tech rights and claims and a contribution for legal costs of $4,800 in exchange for the return of 30,000 shares of the Company’s common stock with a fair value of $604,800. These shares are treated as treasury stock and are able to be reissued. | |
On March 12, 2013, the Company entered into an agreement with three members of MedVend Holdings LLC whereby the Company would acquire 50% of their equity interest in MedVend. The purchase price of the equity interest is $4,100,000 whereby the Company paid an advance of $300,000 upon execution of the contract for the right to purchase and another $300,000 was disbursed as an additional investment to MedVend Holdings LLC. In May 2013, the three members of MedVend Holdings LLC were named in a lawsuit by that entity’s minority shareholders alleging improper conveyance of the three members’ ownership interest in MedVend Holding LLC to the Company. Accordingly, also in May 2013, Medbox filed suit against MedVend Holdings, LLC and the three members of that entity that were involved in the transaction. | |
On June 5, 2014 the Company entered into a sale agreement with an affiliate company owned by the co-founder of the Company for the sale of all the MedVend rights and claims and a contribution for legal costs of $4,800 in exchange for 30,000 shares of the Company’s common stock with a fair value of $604,800. These shares are treated as treasury stock and are able to be reissued. | |
The shares of common stock received for the Bio-Tech and MedVend sales to the affiliate company are recorded as treasury stock at cost of $1,209,600. | |
NOTE_5_INVENTORIES
NOTE 5 - INVENTORIES | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory Disclosure [Text Block] | ' | ||||||||
NOTE 5 – INVENTORIES | |||||||||
Inventories are stated at the lower of cost or market value. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. | |||||||||
The consolidated inventories at June 30, 2014 and December 31, 2013 consist of: | |||||||||
Inventories | 30-Jun-14 | 31-Dec-13 | |||||||
Work in process and related capitalized costs | $ | 656,942 | $ | 878,956 | |||||
Deposits on dispensing machines | 347,194 | 138,423 | |||||||
Vaporizers and accessories | 456,675 | 193,575 | |||||||
Dispensing machines | 84,500 | 58,500 | |||||||
Total inventory | $ | 1,545,311 | $ | 1,269,454 | |||||
NOTE_6_PROPERTY_AND_EQUIPMENT
NOTE 6 - PROPERTY AND EQUIPMENT | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | ||||||||
NOTE 6 – PROPERTY AND EQUIPMENT | |||||||||
Property and equipment at June 30, 2014 and December 31, 2013 consists of: | |||||||||
Property and Equipment | 30-Jun-14 | 31-Dec-13 | |||||||
Office equipment | $ | 18,770 | $ | 17,192 | |||||
Furniture and fixtures | 74,404 | 73,567 | |||||||
Website development | 46,922 | 46,922 | |||||||
Product tooling | 50,503 | 24,100 | |||||||
190,599 | 161,781 | ||||||||
Less accumulated depreciation | (35,409 | ) | (21,123 | ) | |||||
Property and equipment, net | $ | 155,190 | $ | 140,658 | |||||
Product tooling costs are related to the tooling of a new product by VII. These tooling costs are accumulated and capitalized until the date of launching the new product which is expected to commence in the third quarter of 2014. | |||||||||
NOTE_7_INTANGIBLE_ASSETS
NOTE 7 - INTANGIBLE ASSETS | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||
NOTE 7 – INTANGIBLE ASSETS | |||||||||
The Company acquired certain intangible assets with its purchase of 100% of the outstanding common stock of VII on March 22, 2013. The Company accounts for intangible assets acquired in a business combination, if any, under the purchase method of accounting at their estimated fair values at the date of acquisition. Intangibles are either amortized over their estimated lives, if a definite life is determined, or are not amortized if their life is considered indefinite. | |||||||||
Intangible assets | 30-Jun-14 | 31-Dec-13 | |||||||
Distributor relationship | $ | 314,000 | $ | 314,000 | |||||
IP/technology/patents | 403,363 | 332,179 | |||||||
Domain names | 131,000 | 46,000 | |||||||
Non-compete covenants | 23,000 | 23,000 | |||||||
Subtotal | 871,363 | 715,179 | |||||||
Less accumulated amortization | (57,417 | ) | (32,750 | ) | |||||
Intangible assets, net | $ | 813,946 | $ | 682,429 | |||||
The estimated useful lives for significant intangible assets are as follows: | |||||||||
Distributor Relationship | 10 years | ||||||||
Domain Names | 10 years | ||||||||
IP/Technology/Patents | 10 years | ||||||||
Non-Compete covenants | 3 years | ||||||||
The Company’s management does not believe any impairment of intangible assets has occurred as of June 30, 2014. | |||||||||
NOTE_8_ACCOUNTS_AND_NOTES_RECE
NOTE 8 - ACCOUNTS AND NOTES RECEIVABLE | 6 Months Ended |
Jun. 30, 2014 | |
Receivables [Abstract] | ' |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' |
NOTE 8 – ACCOUNTS AND NOTES RECEIVABLE | |
Accounts receivables | |
As of June 30, 2014, accounts receivable, net of valuation adjustment related to the changes in San Diego legislation, totaling $1,113,944 represent receivables from clients of the Company’s subsidiary, PVM. The corresponding amount at December 31, 2013 was $1,864,506. | |
Periodically the Company assesses and reviews the receivables for collectability. As of December 31, 2013, the Company’s management considered all accounts outstanding fully collectible. As of June 30, 2014 due to changes in business environment and contractual covenants the Company established provisions for accounts receivables (valuation adjustment). During the second quarter of 2014, the Company determined that none of San Diego client’s receivables for the contracts signed prior to 2014 were collectable. In addition some Nevada clients could not perform under the contract and requested a settlement, one of the three had an outstanding receivable of $17,000. As the result the Company wrote off these receivables against the provision for sales returns and refunds in the total amount of $842,825 as of June 30, 2014. For further details see Note 9 –Allowances and refunds. | |
Notes Receivable | |
During December 2013, the Company entered into a multiple advance secured promissory note for $1,000,000 with a Canadian partner, all transactions with whom are considered to be on an arms-length basis. This note is due on December 10, 2018 and payable, together with interest at 5% per annum. As of June 30, 2014 and December 31, 2013 the outstanding balance of this note receivable was $155,000 and $115,000 respectively. | |
NOTE_9_ALLOWANCES_AND_REFUNDS
NOTE 9 - ALLOWANCES AND REFUNDS | 6 Months Ended |
Jun. 30, 2014 | |
Disclosure Text Block Supplement [Abstract] | ' |
Allowance for Credit Losses [Text Block] | ' |
NOTE 9 – ALLOWANCES AND REFUNDS | |
Sales Allowances and refunds | |
Due to changes in legislation in the San Diego market where the number of licenses being granted were reduced from 130 to 32, the Company reassessed the chances of performing its contracts with clients who opted for the San Diego market. Based on the reassessment, the Company identified that it would not be able to perform all the contracts due to the significant reduction in the number of available licenses in late March 2014. Also, during the second quarter of 2014, some Nevada clients could not proceed with the contract and requested a settlement in the form of a partial reimbursement. | |
As a direct result of the aforementioned, the Company recorded a provision for sales returns and refunds in the amount of $842,825 and recorded a direct reduction in revenue of $22,500 from a contract cancellation both of which were treated as deductions from sales revenue. In addition some of the contracts carried a refund provision. The refunds were estimated by the Company in the amount of $386,885 and accordingly a provision was created reducing sales revenue in 2014. | |
All provisions for accounts receivables were applied toward the liquidation of the uncollectable receivables during the second quarter of 2014, in the amount of $842,825. Also during the first quarter of 2014 the Company negotiated payments totaling $88,000 and paid out $71,945 from the provisions for refunds during the second quarter of 2014. As of June 30, 2014, the outstanding balance of the provision for refunds was $314,940, this balance is expected to be reimbursed to clients during the third quarter of 2014. | |
Provisions for sales allowances is disclosed as a separate line in the Consolidated Statements of Operations. | |
Allowance for doubtful accounts | |
During the first six months of 2014, the Company identified $145,000 of accounts receivable where management determined that collection was not likely and although the Company will make continued efforts to collect the full value of the various accounts receivable, the Company charged to bad debt expense $145,000. One account was written off in the second quarter of 2014 leaving a remaining balance of $120,000 as of June 30, 2014. | |
NOTE_10_MARKETABLE_SECURITIES_
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS | 6 Months Ended | |||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||
Marketable Securities And Customer Deposits [Abstract] | ' | |||||||||||||||||
Marketable Securities And Customer Deposits [Text Block] | ' | |||||||||||||||||
NOTE 10 – MARKETABLE SECURITIES AND CUSTOMER DEPOSITS | ||||||||||||||||||
Marketable securities | ||||||||||||||||||
Marketable securities of the Company represent the shares received as a payment from clients for services provided. As of June 30, 2014 and December 31, 2013 the fair value of these marketable securities was $321,043 and $184,800, respectively. | ||||||||||||||||||
As of June 30, 2014, the Company held as a deposit 7,000,000 restricted shares (issued on September 5, 2013) as payment for $300,000 in accounts receivable billed to a customer. The fair value of the shares as of June 30, 2014 and December 31, 2013 (with 12% discount because of restriction as of December 31, 2013) was $196,000 and $184,800. The value of these unliquidated shares is offset against the outstanding amounts owed to the Company up to $300,000 (the value of receivable of the client) until such time that the shares are liquidated and only at that time that the cash proceeds are used to pay off the receivable will any excess cash received be returned to the client in accordance with the contract. | ||||||||||||||||||
On May 19, 2014 the Company entered into an agreement with MJ Holdings, Inc., a publicly traded company that provides real estate financing and related solutions to licensed marijuana operators. The Company will market MJ Holdings' real estate financial products and offerings to its consulting clients and will direct all incoming real estate related opportunities to MJ Holdings. Under the agreement, the Company will receive 50% of management fees and profits realized from the real estate opportunities it presents, in addition to warrants to purchase shares in MJ Holdings. The initial term of the agreement is six months, and will renew automatically for successive one month terms, unless one of the parties notifies the other in writing of its the intention to terminate the agreement. During the six month period MJ Holdings, Inc. will issue to the Company 33,333 warrants of common stock on each month’s anniversary of the contract. As of June 30, 2014 the Company received two warrants for the services provided under the agreement. The following table represents the initial recognition value and subsequent adjustment as of reporting date: | ||||||||||||||||||
Initial | Recognition | Fair Value | Fair Value as of | |||||||||||||||
Warrants | Fair | Value | at Conversion | Gain or Loss | June, 30 2014 | |||||||||||||
Warrant #1 | $ | 95,866 | $ | (94,719 | ) | $ | (1,147 | ) | $ | - | ||||||||
Conversion of the Warrant #1 to 10,825 shares | - | 94,719 | (10,609 | ) | 84,110 | |||||||||||||
Warrant #2 | 2,666 | - | 38,267 | 40,933 | ||||||||||||||
Total | $ | 98,532 | $ | - | $ | 26,511 | $ | 125,043 | ||||||||||
At initial recognition the value of warrants is recorded as “Marketable securities” and revenue for services provided. Subsequent to initial recognition all valuation adjustments are reflected through other income (expense) as “Unrealized gain or losses from marketable securities”. In June 2014, warrant #1 was converted to 10,825 shares of MJ Holdings common stock through the cashless exercise option. The fair value of the shares as of June 30, 2014 was $84,110. The Company uses the published closing price of the stock to value the stock held by the Company. | ||||||||||||||||||
The Company uses a Black-Scholes model to measure the value of the warrants. The following data were introduced in the model in order to assess the value of the warrants assuming that the Company expects to keep the warrants for six months: | ||||||||||||||||||
Black-Scholes Calculator Data | Initial Valuation and Recognition | Fair Value as of | ||||||||||||||||
30-Jun-14 | ||||||||||||||||||
Warrant | #1 | #2 | #2 | |||||||||||||||
Stock price, $ | 8.69 | 4 | 7.77 | |||||||||||||||
Exercise price, $ | 6.41503521 | 8.454933 | 8.454933 | |||||||||||||||
Time to maturity, Years | 0.5 | 0.5 | 0.475 | |||||||||||||||
Annual risk-free rate, % | 0.05 | 0.05 | 0.07 | |||||||||||||||
Annualized volatility, % | 70 | 70 | 70 | |||||||||||||||
Black-Scholes Value per warrant, $ | 2.876 | 0.08 | 1.228 | |||||||||||||||
Number of warrants/shares | 33,333 | 33,333 | 33,333 | |||||||||||||||
Total value of warrants/shares, $ | 95,866 | 2,666 | 40,933 | |||||||||||||||
Customer deposits | ||||||||||||||||||
Advance payments from customers are recorded as customer deposits on the balance sheet. | ||||||||||||||||||
Customer deposits | 30-Jun-14 | 31-Dec-13 | ||||||||||||||||
Advance payments from customers | $ | 397,500 | $ | 127,550 | ||||||||||||||
Prepaid sales of vaporizers | 75,038 | 75,636 | ||||||||||||||||
Total customer deposits | $ | 472,538 | $ | 203,186 | ||||||||||||||
NOTE_11_SHORTTERM_DEBT
NOTE 11 - SHORT-TERM DEBT | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Short-term Debt [Text Block] | ' | ||||||||
NOTE 11 – SHORT-TERM DEBT | |||||||||
Short-term debt as of June 30, 2014 and December 31, 2013 consisted of: | |||||||||
Short-term debt | 30-Jun-14 | 31-Dec-13 | |||||||
Notes payable to unrelated third party | $ | - | $ | 75,000 | |||||
Notes payable to related party | 516,674 | 111,794 | |||||||
Short term loan payable | 76,738 | - | |||||||
Total short-term debt | $ | 593,412 | $ | 186,794 | |||||
Note payable to unrelated party was signed on March 22, 2013 and was due on April 22, 2014, bearing an interest rate of 10% per annum. The note was paid in full. | |||||||||
The notes payable to related parties bear no interest. | |||||||||
The short term loan represents the outstanding balance of the financing in the amount of $137,160 for the Directors’ & Officers’ liability insurance. The financing bears 4.25% interest and is payable in monthly payments of $15,511 for nine months with the first payment due on March 5, 2014 and the last payment due on November 5, 2014. | |||||||||
NOTE_12_PREPAID_EXPENSES_AND_O
NOTE 12 - PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Other Current Assets [Text Block] | ' | ||||||||
NOTE 12 – PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||||||||
Prepaid expenses and other currents assets as of June 30, 2014 and 2013 consisted of: | |||||||||
Prepaid expenses and other current assets | 30-Jun-14 | 31-Dec-13 | |||||||
Prepaid expenses: | |||||||||
Rent | $ | 21,951 | $ | 3,962 | |||||
Directors & officers insurance | 88,900 | ||||||||
Audit | 25,000 | 25,000 | |||||||
Financial consultants | 12,083 | 20,833 | |||||||
Business report | 30,000 | - | |||||||
Other vendors | 39,632 | 39,446 | |||||||
Other current assets- | |||||||||
Earnest money deposits | 140,000 | - | |||||||
Prepaid expenses and other current assets | $ | 357,566 | $ | 89,241 | |||||
Earnest money deposits consists of monies paid for opening escrow for the purchase of multiple properties to be used to develop retail dispensary or product cultivation facilities. | |||||||||
NOTE_13_RELATED_PARTY_TRANSACT
NOTE 13 - RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
NOTE 13 – RELATED PARTY TRANSACTIONS | |
The Company utilizes Vincent Chase Inc., which is a related party and 100% owned by a co-founder of the Company for management advisory and consulting services. During the six months ended June 30, 2014, the Company incurred $75,000 for these services at the rate of $12,500 per month. The rate was increased to $25,000 per month starting July 1, 2014. | |
During 2013, the Company issued two promissory notes payable to Vincent Chase Inc., on September 20, 2013 in the amount of $150,000 and on October 28, 2013 in the amount of $100,000. At December 31, 2013 the outstanding amount for the combined notes was $111,794. As of June 30, 2014 the aforementioned notes were repaid in full. | |
During the first six months of 2014, the Company issued three notes payable to PVM International Inc. (“PVMI”), a related party which is 100% owned by a co-founder of the Company in the amounts of $250,000, $100,000 and $500,000. These notes were subsequently partially repaid leaving $516,674 outstanding as of June 30, 2014. | |
During the first three months of 2014, the Company had sales to a related party and shareholder in the amount of $1,000,000. In addition, the same related party paid the Company $150,000 during the first three months of 2014 owed to the Company by an unrelated third party. | |
On July 9, 2014 the Company repaid $500,000 of the related party notes payable to PVMI. | |
On July 21, 2014, the Company paid $75,000 to PVMI as a partial payment for advances made by PVMI for escrow deposits used to secure properties for possible license acquisition in the San Diego market area. | |
On August 13, 2014, the Company issued a note payable to PVMI for $350,000 in exchange for cash received. | |
NOTE_14_STOCKHOLDERS_EQUITY
NOTE 14 - STOCKHOLDER'S EQUITY | 6 Months Ended |
Jun. 30, 2014 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity Note Disclosure [Text Block] | ' |
NOTE 14 – STOCKHOLDER’S EQUITY | |
Preferred Stock | |
In November 2011, the Company issued 6,000,000 shares of $0.001 par value Series A convertible preferred stock to the founder and a shareholder of the Company. This preferred stock can be converted to common stock at a ratio of 1 (one) share of Series A Preferred Stock to 5 (five) shares of common stock. In October 2012, 3,000,000 shares of Series A Preferred Stock were returned to the Company by the shareholder and reissued to the founder. In January 2013, the founder returned to the Company the 3,000,000 shares of Series A Preferred Stock and they were immediately cancelled. As of June 30, 2014, there are 3,000,000 shares of Series A Preferred Stock outstanding. | |
Common Stock | |
On June 5, 2014 the Company entered into two separate sale agreements with an affiliate company owned by the co-founder of the Company. One was for the sale of all Bio-Tech rights and claims and a contribution for legal costs of $4,800 in exchange for 30,000 shares of Company common stock with a fair value of $604,800 and another for the sale of all the MedVend rights and claims and a contribution for legal costs of $4,800 in exchange for 30,000 shares of Company common stock with a fair value of $604,800. These 60,000 shares of common stock are treated as treasury stock and are able to be reissued. | |
During the first quarter of 2014, the Company issued 485,830 shares of common stock at the price $5.00 per share, resulting in net cash proceeds of $2,427,859. | |
On December 19, 2013 the Company declared a 1:1 common stock dividend on each share of outstanding common stock. This stock dividend aggregating 14,762,875 restricted common shares was issued on February 3, 2014. Accordingly, the Company’s 2013 condensed consolidated financial statements have been retroactively stated to reflect the common stock dividend. | |
NOTE_15_COMMITMENTS_AND_CONTIN
NOTE 15 - COMMITMENTS AND CONTINGENCIES | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||||||
NOTE 15 – COMMITMENTS AND CONTINGENCIES | |||||||||
The Company leases property for its day to day operations and has recently begun leasing facilities for possible retail dispensary locations and cultivation locations as part of the process of applying for retail dispensary and cultivation licenses. | |||||||||
Office Leases | |||||||||
On August 1, 2011, the Company entered into a lease agreement for office space located in West Hollywood, California through June 30, 2017 at a monthly rate of $14,397. Starting July 1, 2014, the monthly rent increased by 3% to $14,828 per month. | |||||||||
In addition, the Company leases office facilities located at West Hills, California and Scottsdale, Arizona from unrelated third parties at a monthly rate of $1,300 and $1,420. The West Hills lease is on a month to month basis. The Arizona lease is a non-auto renewing lease with the most current agreement covering the period from May 1, 2014 to October 31, 2014. | |||||||||
At December 17, 2013 the Company’s subsidiary Vaporfection International Inc. entered into a 1 year non-cancelable office lease in Deerfield Beach, Florida. The lease started on January 1, 2014 at a monthly rate of $1,981. After December 31, 2014 the lease converts to a month to month basis. | |||||||||
The Company rents virtual offices/meeting spaces in Tokyo, New York, Toronto and Seattle on a month to month basis for an aggregate of approximately $390 per month. The payment is charged to rent expense as incurred. | |||||||||
Total rent expense under operating leases for the three months ended June 30, 2014 and 2013 was $52,129 and $29,893, and for the six months ended June 30, 2014 and 2013 was $103,602 and $43,914, respectively. | |||||||||
Retail/Cultivation facility leases | |||||||||
The Company’s business model of acquiring retail dispensary and cultivation licenses has made it important to acquire real estate either through lease arrangements or through purchase agreements in order to secure a possible license. On May 8, 2014, the Company entered into a lease agreement for five years with a monthly payment of $7,400 in order to apply for a license and build-out of a location for a client. | |||||||||
The following table is a summary of our material contractual lease commitments as of June 30, 2014: | |||||||||
Year Ending | Office Rent | Retail/Cultivation Facility Lease | |||||||
2014 | $ | 88,968 | $ | 44,400 | |||||
2015 | 177,936 | 88,800 | |||||||
2016 | 177,936 | 88,800 | |||||||
2017 | 88,968 | 88,800 | |||||||
2018 | - | 88,800 | |||||||
2019 | - | 29,600 | |||||||
Total | $ | 533,808 | $ | 429,200 | |||||
Real Estate Commitments | |||||||||
As part of the changes in the Company’s business model, the Company entered in various real estate purchase agreements at various times in order to allow the filing of retail dispensary or cultivation facility licenses in certain states and localities. These purchase agreements generally provide for a period of due diligence and a termination clause in the event that the Company is unable to obtain a license for its client. The agreements generally also provide for some monthly payment from escrow in order to compensate the real estate owner for the passage of time until the sale transaction is complete. Most of these payment releases from escrow are nonrefundable but applicable towards the purchase price if the Company decides to proceed with the purchase. The Company intends to close on the real estate where purchase agreements have been signed, or to seek partners to replace the Company on each property purchased. | |||||||||
During the six months period ended June 30, 2014 the Company deposited $140,000 into six escrow accounts in order to secure the purchase of real estate to be used for future retail/cultivation facilities with an aggregate purchase price of $4,639,000. The real estate purchase agreements have closing dates varying between July 18, 2014 and January 30, 2015. Two of the agreements were subsequently extended. | |||||||||
Other Commitments | |||||||||
The Company has an obligation to a prior manufacturer of VII products to purchase certain unused components after a certain period of time upon the completion of the purchase of the stock of VII. The amount the Company is now committed to purchase is approximately $56,000. | |||||||||
NOTE_16_SUBSEQUENT_EVENTS
NOTE 16 - SUBSEQUENT EVENTS | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Subsequent Events [Abstract] | ' | ||||||||||||
Subsequent Events [Text Block] | ' | ||||||||||||
NOTE 16 – SUBSEQUENT EVENTS | |||||||||||||
On July 9, 2014, the Company repaid $500,000 of related party notes payable to PVM International, Inc. | |||||||||||||
On July 19, 2014, the Company received the third warrant for 33,333 shares of common stock as a payment for services provided to MJ Holdings. The warrant was initially valuated at $53,866 using the Black Scholes model. | |||||||||||||
On July 21, 2014, the Company paid $75,000 to PVM International, Inc. as a partial payment for advances made by PVMI for escrow deposits used to secure properties for possible license acquisition in the San Diego market area. | |||||||||||||
On July 21, 2014, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with accredited investors (the “Investors”) pursuant to which the Company agreed to sell, and the Investors agreed to purchase, convertible debentures (the “Debentures”) in the aggregate principal amount of $3,000,000, in three tranches, each in the amount of $1,000,000. The initial closing under the Purchase Agreement, for Debentures in the aggregate principal amount of $1,000,000, occurred on July 21, 2014. The Debentures bear interest at the rate of 10% per year (half of which is due at issuance) and are convertible into common stock at a conversion price of $11.75 per share (subject to adjustment in the event of stock splits, stock dividends, and similar transactions, and in the event of subsequent sales of common stock at a lower purchase price (subject to certain exceptions)). Repayment of principal on the debentures, together with accrued interest thereon, is due in seven monthly installments, commencing six months from issuance. The Company may make such payments in cash (in which event the Company will pay a 30% premium) or, subject to certain conditions, in shares of common stock valued at 70% of the lowest volume weighted average price of the common stock for the 20 prior trading days. In connection with the Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to file a registration statement for the shares of common stock issuable upon conversion of, or payable as interest on, the Debentures, within 45 days of the initial closing date under the Purchase Agreement, and to have such registration statement declared effective within 120 days of the initial closing date. Subsequent closings under the Purchase Agreement, each for Debentures in the aggregate principal amount of $1,000,000, will occur, subject to customary closing conditions, within two days of the Company’s filing of a registration statement with the Securities and Exchange Commission under the Registration Rights Agreement, and within 2 days of the effective date of such registration statement. | |||||||||||||
On July 23, 2014, Mr. Guy Marsala was appointed to fill a vacancy in the board of directors and then was elected Chairman of the Board of Directors of Medbox, Inc. (the “Company”). Immediately afterwards, Dr. Bruce Bedrick resigned as President and Chief Executive Officer of the Company and Mr. Marsala was then appointed President and Chief Executive Officer of the Company. | |||||||||||||
In connection with Mr. Marsala’s election as President, Chief Executive Officer and Chairman, on July 23, 2014, the Company entered into an employment agreement with Mr. Marsala (the “Employment Agreement”). Pursuant to the Employment Agreement, the Company agreed to engage Mr. Marsala, and Mr. Marsala agreed to serve as the Company’s President, Chief Executive Officer and Chairman, for a two-year term, which term will automatically be extended for successive additional one-year terms, unless either party provides written notice to the other 90 days prior to the expiration of the initial term or any successive term, that Mr. Marsala’s engagement will not be extended. The Company agreed to pay Mr. Marsala a salary of $330,000 per year and to pay Mr. Marsala $2,500 per month for living expenses in the West Hollywood, California area. Mr. Marsala will also be entitled to an annual bonus of up to $250,000, including up to $125,000 in cash and up to $125,000 in equity of the Company, subject to performance criteria and objectives to be established by mutual agreement of the Board of Directors and Mr. Marsala within 90 days of the effective date of the Employment Agreement, and thereafter from time to time by the Board of Directors in consultation with Mr. Marsala. Mr. Marsala will also be entitled to an award of restricted stock units, to be issued within 90 days of the effective date of the Employment Agreement, under an equity incentive plan to be adopted by the Company, in the amount of the greater (by value) of 50,000 shares of common stock or $500,000 of common stock based on the volume weighted average price for the 30 day period prior to the date of the grant. The Company also agreed to make an equal stock award to Mr. Marsala on each anniversary date of the Employment Agreement. | |||||||||||||
The Company may terminate the Employment Agreement with or without Cause (as defined in the Employment Agreement) upon written notice to Mr. Marsala. In the event the Company terminates the Employment Agreement without Cause, Mr. Marsala terminates the Employment Agreement with Good Reason (as defined in the Employment Agreement), or the Employment Agreement is not renewed as a result of notice to Mr. Marsala provided 90 days prior to expiration of the initial or a renewal term, Mr. Marsala will be entitled to payment of 1.5 times his annual salary and payment of all remaining lease payments or lease breakage fees on living quarters in the West Hollywood area up to the sum of $2,500 per month, unless the Company takes over the lease, and provided that the Company’s Chief Financial Officer has had a reasonable opportunity to review and approve in writing any such lease or extension thereof or amendment or modification thereto in advance of Mr. Marsala binding himself thereto. Termination by the Company within 365 days of a Change of Control (as defined in the Employment Agreement) in the absence of Cause will conclusively be deemed a termination by the Company without Cause. | |||||||||||||
After June 30, 2014 the Company, through its operating subsidiaries, Medbox Property Investments, Inc. and MJ Property Investments, Inc. entered into seven additional real estate purchase agreements with an aggregated value of $13,565,000 and paid deposits of $378,000 into the escrow accounts. In addition to amounts already paid, the Company is expecting to pay an additional $82,000 into the escrow accounts for two of the aforementioned seven properties before August 31, 2014. The newly signed agreements have closing dates varying between December 11, 2014 and February 10, 2015. | |||||||||||||
In order to extend the closing date to October 18, 2014 on two of the real estate agreements previously signed during the second quarter of 2014, the Company paid an additional $35,000 on July 23, 2014, and will make three monthly rent payments not applicable towards purchase price in the amount of $3,200 per month starting July 18, 2014 for one of the agreements, and the Company paid an additional nonrefundable and not applicable toward purchase price fee of $15,000 for the second agreement. | |||||||||||||
On July 28, 2014, MJ Property Investments, Inc. entered into a promissory note secured by a deed of trust with a seller of a property anticipated to be used for development of a retail store in the state of Washington. The purchase price of the property was $399,000 of which $150,000 was paid on July 23, 2014, and the remaining promissory note of $249,000 bears interest of 12% and has six monthly interest-only payments of $2,490 due beginning August 1, 2014 and the principal fully due on January 30, 2015. In the event of a default, as defined, the interest rate increases to 18% and the note can be accelerated. | |||||||||||||
During July 2014 one of the real estate properties that MJ Property Investments, Inc. opened escrow on was foreclosed upon and the agreement was canceled and escrow money in the amount of $10,000 was reimbursed to the Company on July 28, 2014. | |||||||||||||
During July, MJ Property Investments, Inc. allowed the escrows to expire on two agreements with an aggregate purchase price of $2,500,000 and forfeited $100,000 in earnest money in order to negotiate more favorable terms for the purchases. | |||||||||||||
A summary of open real estate purchase transactions as of August 13, 2014 is represented in the table below: | |||||||||||||
Property | Purchase price | Initial closing date | Amount paid in escrow | Date escrow opened | |||||||||
1 | $ | 3,500,000 | 12/11/14 | $ | 100,000 | 7/25/14 | |||||||
2 | 3,650,000 | 1/5/15 | 100,000 | 7/21/14 | |||||||||
3 | 2,450,000 | 12/1/14 | 100,000 | 8/13/14 | |||||||||
4 | 790,000 | 1/1/15 | 30,000 | 8/12/14 | |||||||||
5 | 480,000 | 1/31/15 | 5,000 | 8/12/14 | |||||||||
6 | 2,100,000 | 2/10/15 | 33,000 | 8/13/14 | |||||||||
7 | 595,000 | 1/31/15 | 10,000 | 8/13/14 | |||||||||
8 | 695,000 | 10/18/14 | 10,000 | 6/28/14 | |||||||||
9 | 820,000 | 10/18/14 | 45,000 | 6/28/14 | |||||||||
Total | $ | 15,080,000 | $ | 433,000 | |||||||||
On July 22, 2014 Medbox Property Investments, Inc., entered into a new lease for a facility which will be used in the application process for both a dispensary and cultivation facility. The lease is payable monthly at a rate of $20,000 per month. The lease has a five year term, but is contingent upon license approval which allows for early termination of the lease after January 1, 2015 if the license is not granted. | |||||||||||||
On August 6, 2014, the board of directors approved the adoption of the 2014 Medbox, Inc. Equity Incentive Plan providing for the issuance of equity based instruments to employees, directors and consultants covering up to an initial total of 2,000,000 shares of common stock. | |||||||||||||
On August 13, 2014, the Company issued a note payable to PVMI for $350,000 in exchange for cash received. | |||||||||||||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||||||||||||
Consolidation, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Principles of Consolidation | ||||||||||||||||||||||||||
The consolidated financial statements include the accounts of Medbox, Inc. and its wholly owned subsidiaries, PVM, MDS, VII, MT, Medbox Rx, Inc. (Rx), Medbox CBD, Inc., Medbox Property Investments, Inc., MJ Property Investments, Inc., Medbox Management Services, Inc., Medbox Merchant Service, Inc., Medbox Armored Transport, Inc., and Medbox Investments, Inc. All intercompany transactions have been eliminated. | ||||||||||||||||||||||||||
Medbox CBD, Inc., Medbox Property Investments, Inc., MJ Property Investments, Inc., Medbox Management Services, Inc., Medbox Merchant Service, Inc., Medbox Armored Transport, Inc. and Medbox Investments, Inc., represents additional subsidiaries included in the consolidated financial statements for the year 2014. | ||||||||||||||||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Use of Estimates | ||||||||||||||||||||||||||
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the condensed consolidated financial statements as well as the reported expenses during the reporting periods. The Company’s significant estimates and assumptions include the valuation of the Company’s common stock used in the valuation of goodwill, accounts receivable and note receivable collectability, inventory, advances on investments, the valuation of restricted stock and warrants received from customers, the amortization and recoverability of capitalized patent costs and useful lives of long-lived assets, and income tax expense. Some of these judgments can be subjective and complex, and, consequently, actual results may differ from these estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from these estimates. | ||||||||||||||||||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Concentrations of Credit Risk | ||||||||||||||||||||||||||
The Company maintains cash balances at several financial institutions in the Los Angeles, California area and Florida. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. At June 30, 2014 and December 31, 2013, the Company’s uninsured balances totaled $432,261 and $0, respectively. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. | ||||||||||||||||||||||||||
At June 30, 2014 and December 31, 2013, three (3) customers, one of which is a related party through the entity’s stock ownership in the Company (customer B) represented 78.0% and 37.5% of outstanding receivables, respectively. | ||||||||||||||||||||||||||
30-Jun-14 | January - June, 2014 | 31-Dec-13 | ||||||||||||||||||||||||
Customer | Accounts Receivable | Gross Revenue | Accounts Receivable | |||||||||||||||||||||||
Amount, $ | % | Amount, $ | % | Amount, $ | % | |||||||||||||||||||||
A | 586,824 | 47.6 | - | - | 700,000 | 37.5 | ||||||||||||||||||||
B | 200,000 | 16.2 | 1,000,000 | 57.8 | - | 0 | ||||||||||||||||||||
C | 175,000 | 14.2 | 175,000 | 10.1 | - | - | ||||||||||||||||||||
Subtotal | 961,824 | 78 | % | 1,175,000 | 67.9 | 700,000 | 37.5 | % | ||||||||||||||||||
Total, gross | 1,233,944 | 100 | % | 1,728,998 | 100 | 1,864,506 | 100 | % | ||||||||||||||||||
Advertising Costs, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Advertising and Marketing Costs | ||||||||||||||||||||||||||
Advertising and marketing costs are expensed as incurred. The Company incurred advertising and marketing costs of $286,784 and $161,005 for the three months ended June 30, 2014 and 2013, and $430,008 and $415,257 for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Research, Development, and Computer Software, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Research and Development | ||||||||||||||||||||||||||
Research and development expenses are charged to operations as incurred. The Company incurred research and development costs of $67,033 and $10,000 for the three months ended June 30, 2014 and 2013, and $75,033 and $18,500 for the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||||||||||||
Pursuant to ASC No. 825, Financial Instruments, the Company is required to estimate the fair value of all financial instruments included on its balance sheets. The carrying value of cash, accounts receivable, other receivables, inventory, accounts payable and accrued expenses and notes payable approximate their fair value due to the short period to maturity of these instruments. The Company’s marketable securities and related customer deposits require fair value measurement on a recurring basis as the Company has received advance payment of restricted stock in a publicly traded company for contracted services and received warrants for service provided to unrelated third party. The Company has no exposure to gain or loss on the increase or decrease in the value of the marketable securities received as a payment from customer as any shortfall in the ultimate liquidated value of the securities will be supplemented by additional restricted stock from the customer and any liquidation in excess above the Company’s billings will be returned to the customer. The securities received as a payment for services provided will be exposed to gains or losses following their initial evaluation as of the date the revenue was earned. | ||||||||||||||||||||||||||
Warrants and other financial assets received as a payment for the services provided are recorded as “Marketable securities” under the current assets if they are expected to be realized within 12 months. The Company uses the Black-Scholes model to measure the value of the warrants. At each reporting date the Company will reevaluate the value of marketable securities and record any changes in value to other income (expense) under “Unrealized gain or losses from marketable securities”. | ||||||||||||||||||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Revenue Recognition | ||||||||||||||||||||||||||
The Company applies the revenue recognition provisions pursuant to Accounting Standards Codification 605, Revenue Recognition (“ASC 605”) (formerly SAB Topic 13A), which provides guidance on the recognition, presentation and disclosure of revenue in financial statements filed with the SEC. The guidance outlines the basic criteria that must be met to recognize the revenue and provides guidance for disclosure related to revenue recognition policies. | ||||||||||||||||||||||||||
The Company recognizes revenue related to consulting fees based upon the terms of the contract. In general, the Company recognizes revenue when a milestone is reached in the contract such as submittal of the license application, awarding of a license or securing the location. In addition, if the contract includes the build out of the client location and the installation of Medbox dispensing machines then the remainder of the revenue is recognized when the facility is completed and available for move-in by the client. The contract terms are broken down in specific milestones with specific attributable revenue to be earned upon successful completion of the milestone terms (i.e. if a milestone is obtaining the license, the condition for the revenue to be recorded is after obtaining the license for the client and the Company will record a specified amount of revenue attributable to this milestone based on the contract). All milestones from the consulting agreements are considered to be substantive for revenue recognition and the revenue is recorded when the work/condition described is performed/achieved. Advance payments from clients in advance of work performed are recorded as customer deposits on the balance sheet. | ||||||||||||||||||||||||||
An allowance for bad debts is established for any customer who is deemed as possibly uncollectible. Equipment sales not associated with a consulting contract are recognized as the product is shipped and title passes. | ||||||||||||||||||||||||||
Provisions for estimated returns and allowances, and other adjustments are provided in the same period the related sales are recorded. The Company will at times allow customers to receive full refunds should regulatory events prevent the customer from being able to operate his contracted location. The provision for returns as well as an allowance for doubtful accounts will be included in the Company’s balance sheet as determined by management. For the year ended December 31, 2013 management determined that no allowances were necessary as there were no known events to create a basis for such provision. During the first quarter of 2014, due to changes in legislation in the San Diego market where the number of licenses were reduced from 130 to 32, the Company determined that it will not be able to perform all the contracts. As a result, the Company reduced revenue through a recording of a provision for sales allowances and refunds for the six months ended June 30, 2014 of $1,229,710. In addition, see Note 9. | ||||||||||||||||||||||||||
Revenue for services with a payment in form of warrants or other financial assets are recognized when the services are performed. The value of revenue is measured using the Black-Scholes model for warrants. | ||||||||||||||||||||||||||
Unrealized gain or loss from marketable securities occurs in the process of the reevaluation of the warrants or other financial assets after their initial recognition valuation. At each reporting date the Company reevaluates the value of marketable securities and reflects the change in the statement of operations under the caption “Unrealized gain or losses from marketable securities”. | ||||||||||||||||||||||||||
Cost of Sales, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Cost of Revenue | ||||||||||||||||||||||||||
Cost of revenue consists primarily of expenses associated with the delivery and distribution of our products and services. These include expenses related to the manufacture of our dispensary units, construction expense related to the customer dispensary, site selection and establishment of licensing requirements, and consulting expense for the continued management of the dispensary unit build out, server and security equipment, rent expense, energy and bandwidth costs, and support and maintenance costs prior to when the client moves in. Cost of revenues also includes costs attributed to previously capitalized costs associated with the process of license procurement in targeted markets that are initially inventoried and then allocated among the licenses which the Company helps procure and charged to cost of revenue in the same period that the associated revenue is earned. In the case where it is determined that no licenses will be awarded to the Company or if the previously inventoried costs are in excess of the projected net realizable value of the sale of the licenses then the excess cost above net realizable value is written off to cost of revenues. In addition, cost of revenue related to our vaporizer line of products consists of direct procurement cost of the products along with costs associated with order fulfilment, shipping, inventory storage and inventory management costs. | ||||||||||||||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Basic and Fully Diluted Net Loss Per Share | ||||||||||||||||||||||||||
Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted average number of shares of common stock and, if dilutive, potential shares of common stock outstanding during the period from the potential 5 for 1 conversion feature of the Company’s Series A preferred stock outstanding. Potential shares of common stock consist of the incremental shares of common stock issuable upon the exercise of the Company’s 529,016 warrants (presented post stock dividend) to the sellers of VII as the likelihood of exercise is probable do to the low exercise price per share of $0.001 (using the if-exercised method). The computation of basic loss per share for the three month and six months ended June 30, 2014 and 2013 excludes potentially dilutive securities of 30,000 and 15,000 shares, respectively, because their inclusion would be antidilutive. | ||||||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, the Company had 3,000,000 shares of Series A preferred stock outstanding with par value of $0.001 that could be converted into 15,000,000 shares of the Company’s common stock. | ||||||||||||||||||||||||||
Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. | ||||||||||||||||||||||||||
For the period ended | For the period ended | |||||||||||||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||||||||||||||
Financing Warrants to purchase common stock | 30,000 | 15,000 | ||||||||||||||||||||||||
Total potentially dilutive securities | 30,000 | 15,000 | ||||||||||||||||||||||||
Receivables, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Bad Debts | ||||||||||||||||||||||||||
The Company is subject to credit risk as it extends credit to our customers for work performed as specified in individual contracts. The Company extends credit to its customers, mostly on an unsecured basis after performing certain credit analysis. Our typical terms require the customer to pay a portion of the contract price up front and the rest upon certain agreed milestones. The Company’s management periodically reviews the creditworthiness of its customers and provides for probable uncollectible amounts through a charge to operations and a credit to an allowance for doubtful accounts based on our assessment of the current status of individual accounts. Accounts still outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts. As of December 31, 2013, the Company’s management considered all accounts outstanding fully collectible. During first quarter of 2014, due to changes in legislation in the San Diego market where the number of licenses were reduced from 130 to 32, the Company determined that it will not be able to perform all the contracts. As a result, the Company recorded allowances and refunds of $1,229,710. See also Note 9. In addition, during the second quarter of 2014, after a collectability review of our existing receivables the Company recorded an allowance for doubtful accounts in the amount of $145,000 as a part of general and administrative expense. | ||||||||||||||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Property and Equipment | ||||||||||||||||||||||||||
Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The Company uses other depreciation methods (generally accelerated) for tax purposes where appropriate. The estimated useful lives for significant property and equipment categories are as follows: | ||||||||||||||||||||||||||
Vehicles | 5 years | |||||||||||||||||||||||||
Furniture and Fixtures | 5 years | |||||||||||||||||||||||||
Office equipment | 3 years | |||||||||||||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Income Taxes | ||||||||||||||||||||||||||
The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. | ||||||||||||||||||||||||||
In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorizes. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. | ||||||||||||||||||||||||||
Commitments and Contingencies, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||||||||
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. | ||||||||||||||||||||||||||
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. | ||||||||||||||||||||||||||
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. | ||||||||||||||||||||||||||
Reclassification, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Reclassifications | ||||||||||||||||||||||||||
Certain amounts from the 2013 consolidated financial statements have been reclassified to conform to the 2014 presentation. During the second quarter of 2014 the Company reclassified some items of product development costs related to VII’s miVape in the amount of $28,470 from Property and Equipment -“Product development” into the Intangible assets-“IP/Technology/Patents” | ||||||||||||||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||||||||||||
There were various accounting updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, consolidated results of operations or cash flows. |
NOTE_2_SUMMARY_OF_SIGNIFICANT_1
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | |||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | ' | |||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | 'At June 30, 2014 and December 31, 2013, three (3) customers, one of which is a related party through the entity’s stock ownership in the Company (customer B) represented 78.0% and 37.5% of outstanding receivables, respectively. | |||||||||||||||||||||||||
30-Jun-14 | January - June, 2014 | 31-Dec-13 | ||||||||||||||||||||||||
Customer | Accounts Receivable | Gross Revenue | Accounts Receivable | |||||||||||||||||||||||
Amount, $ | % | Amount, $ | % | Amount, $ | % | |||||||||||||||||||||
A | 586,824 | 47.6 | - | - | 700,000 | 37.5 | ||||||||||||||||||||
B | 200,000 | 16.2 | 1,000,000 | 57.8 | - | 0 | ||||||||||||||||||||
C | 175,000 | 14.2 | 175,000 | 10.1 | - | - | ||||||||||||||||||||
Subtotal | 961,824 | 78 | % | 1,175,000 | 67.9 | 700,000 | 37.5 | % | ||||||||||||||||||
Total, gross | 1,233,944 | 100 | % | 1,728,998 | 100 | 1,864,506 | 100 | % | ||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | 'Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share, because the effect of their inclusion would have been anti-dilutive. | |||||||||||||||||||||||||
For the period ended | For the period ended | |||||||||||||||||||||||||
30-Jun-14 | 30-Jun-13 | |||||||||||||||||||||||||
Financing Warrants to purchase common stock | 30,000 | 15,000 | ||||||||||||||||||||||||
Total potentially dilutive securities | 30,000 | 15,000 | ||||||||||||||||||||||||
Estimated Useful Lives [Member] | ' | |||||||||||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | ' | |||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | 'The estimated useful lives for significant property and equipment categories are as follows: | |||||||||||||||||||||||||
Vehicles | 5 years | |||||||||||||||||||||||||
Furniture and Fixtures | 5 years | |||||||||||||||||||||||||
Office equipment | 3 years |
NOTE_3_ACQUISITION_Tables
NOTE 3 - ACQUISITION (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | 'The total value of the acquisition was approximately $1,635,000 and has been allocated in accordance with ASC 805 as per the Company’s independent valuation as follows: | ||||
Machinery & Equipment | $ | 70,000 | |||
IP and related technology | 287,000 | ||||
Amortizable intangible assets: | |||||
Customer contracts and related relationships | 314,000 | ||||
Trade name, trademark, and domain name | 46,000 | ||||
Non-compete covenants | 23,000 | ||||
Goodwill | 895,000 | ||||
Total assets acquired | 1,635,000 | ||||
Fair value of liabilities assumed | (469,000 | ) | |||
Net fair value | $ | 1,166,000 |
NOTE_5_INVENTORIES_Tables
NOTE 5 - INVENTORIES (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory, Current [Table Text Block] | 'The consolidated inventories at June 30, 2014 and December 31, 2013 consist of: | ||||||||
Inventories | 30-Jun-14 | 31-Dec-13 | |||||||
Work in process and related capitalized costs | $ | 656,942 | $ | 878,956 | |||||
Deposits on dispensing machines | 347,194 | 138,423 | |||||||
Vaporizers and accessories | 456,675 | 193,575 | |||||||
Dispensing machines | 84,500 | 58,500 | |||||||
Total inventory | $ | 1,545,311 | $ | 1,269,454 |
NOTE_6_PROPERTY_AND_EQUIPMENT_
NOTE 6 - PROPERTY AND EQUIPMENT (Tables) (Property and Equipment [Member]) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Property and Equipment [Member] | ' | ||||||||
NOTE 6 - PROPERTY AND EQUIPMENT (Tables) [Line Items] | ' | ||||||||
Property, Plant and Equipment [Table Text Block] | 'Property and equipment at June 30, 2014 and December 31, 2013 consists of: | ||||||||
Property and Equipment | 30-Jun-14 | 31-Dec-13 | |||||||
Office equipment | $ | 18,770 | $ | 17,192 | |||||
Furniture and fixtures | 74,404 | 73,567 | |||||||
Website development | 46,922 | 46,922 | |||||||
Product tooling | 50,503 | 24,100 | |||||||
190,599 | 161,781 | ||||||||
Less accumulated depreciation | (35,409 | ) | (21,123 | ) | |||||
Property and equipment, net | $ | 155,190 | $ | 140,658 |
NOTE_7_INTANGIBLE_ASSETS_Table
NOTE 7 - INTANGIBLE ASSETS (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Finite-Lived Intangible Assets [Member] | ' | ||||||||
NOTE 7 - INTANGIBLE ASSETS (Tables) [Line Items] | ' | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | ||||||||
Intangible assets | 30-Jun-14 | 31-Dec-13 | |||||||
Distributor relationship | $ | 314,000 | $ | 314,000 | |||||
IP/technology/patents | 403,363 | 332,179 | |||||||
Domain names | 131,000 | 46,000 | |||||||
Non-compete covenants | 23,000 | 23,000 | |||||||
Subtotal | 871,363 | 715,179 | |||||||
Less accumulated amortization | (57,417 | ) | (32,750 | ) | |||||
Intangible assets, net | $ | 813,946 | $ | 682,429 | |||||
Estimated Useful Lives [Member] | ' | ||||||||
NOTE 7 - INTANGIBLE ASSETS (Tables) [Line Items] | ' | ||||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 'The estimated useful lives for significant intangible assets are as follows: | ||||||||
Distributor Relationship | 10 years | ||||||||
Domain Names | 10 years | ||||||||
IP/Technology/Patents | 10 years | ||||||||
Non-Compete covenants | 3 years |
NOTE_10_MARKETABLE_SECURITIES_1
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Tables) | 6 Months Ended | |||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||
Marketable Securities And Customer Deposits [Abstract] | ' | |||||||||||||||||
Marketable Securities [Table Text Block] | 'The following table represents the initial recognition value and subsequent adjustment as of reporting date: | |||||||||||||||||
Initial | Recognition | Fair Value | Fair Value as of | |||||||||||||||
Warrants | Fair | Value | at Conversion | Gain or Loss | June, 30 2014 | |||||||||||||
Warrant #1 | $ | 95,866 | $ | (94,719 | ) | $ | (1,147 | ) | $ | - | ||||||||
Conversion of the Warrant #1 to 10,825 shares | - | 94,719 | (10,609 | ) | 84,110 | |||||||||||||
Warrant #2 | 2,666 | - | 38,267 | 40,933 | ||||||||||||||
Total | $ | 98,532 | $ | - | $ | 26,511 | $ | 125,043 | ||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | 'The following data were introduced in the model in order to assess the value of the warrants assuming that the Company expects to keep the warrants for six months: | |||||||||||||||||
Black-Scholes Calculator Data | Initial Valuation and Recognition | Fair Value as of | ||||||||||||||||
30-Jun-14 | ||||||||||||||||||
Warrant | #1 | #2 | #2 | |||||||||||||||
Stock price, $ | 8.69 | 4 | 7.77 | |||||||||||||||
Exercise price, $ | 6.41503521 | 8.454933 | 8.454933 | |||||||||||||||
Time to maturity, Years | 0.5 | 0.5 | 0.475 | |||||||||||||||
Annual risk-free rate, % | 0.05 | 0.05 | 0.07 | |||||||||||||||
Annualized volatility, % | 70 | 70 | 70 | |||||||||||||||
Black-Scholes Value per warrant, $ | 2.876 | 0.08 | 1.228 | |||||||||||||||
Number of warrants/shares | 33,333 | 33,333 | 33,333 | |||||||||||||||
Total value of warrants/shares, $ | 95,866 | 2,666 | 40,933 | |||||||||||||||
Customer Advances And Deposits, Current [Table Text Block] | 'Advance payments from customers are recorded as customer deposits on the balance sheet. | |||||||||||||||||
Customer deposits | 30-Jun-14 | 31-Dec-13 | ||||||||||||||||
Advance payments from customers | $ | 397,500 | $ | 127,550 | ||||||||||||||
Prepaid sales of vaporizers | 75,038 | 75,636 | ||||||||||||||||
Total customer deposits | $ | 472,538 | $ | 203,186 |
NOTE_11_SHORTTERM_DEBT_Tables
NOTE 11 - SHORT-TERM DEBT (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Text Block [Abstract] | ' | ||||||||
Schedule of Short-term Debt [Table Text Block] | 'Short-term debt as of June 30, 2014 and December 31, 2013 consisted of: | ||||||||
Short-term debt | 30-Jun-14 | 31-Dec-13 | |||||||
Notes payable to unrelated third party | $ | - | $ | 75,000 | |||||
Notes payable to related party | 516,674 | 111,794 | |||||||
Short term loan payable | 76,738 | - | |||||||
Total short-term debt | $ | 593,412 | $ | 186,794 |
NOTE_12_PREPAID_EXPENSES_AND_O1
NOTE 12 - PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | ' | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | 'Prepaid expenses and other currents assets as of June 30, 2014 and 2013 consisted of: | ||||||||
Prepaid expenses and other current assets | 30-Jun-14 | 31-Dec-13 | |||||||
Prepaid expenses: | |||||||||
Rent | $ | 21,951 | $ | 3,962 | |||||
Directors & officers insurance | 88,900 | ||||||||
Audit | 25,000 | 25,000 | |||||||
Financial consultants | 12,083 | 20,833 | |||||||
Business report | 30,000 | - | |||||||
Other vendors | 39,632 | 39,446 | |||||||
Other current assets- | |||||||||
Earnest money deposits | 140,000 | - | |||||||
Prepaid expenses and other current assets | $ | 357,566 | $ | 89,241 |
NOTE_15_COMMITMENTS_AND_CONTIN1
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | 'The following table is a summary of our material contractual lease commitments as of June 30, 2014: | ||||||||
Year Ending | Office Rent | Retail/Cultivation Facility Lease | |||||||
2014 | $ | 88,968 | $ | 44,400 | |||||
2015 | 177,936 | 88,800 | |||||||
2016 | 177,936 | 88,800 | |||||||
2017 | 88,968 | 88,800 | |||||||
2018 | - | 88,800 | |||||||
2019 | - | 29,600 | |||||||
Total | $ | 533,808 | $ | 429,200 |
NOTE_16_SUBSEQUENT_EVENTS_Tabl
NOTE 16 - SUBSEQUENT EVENTS (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Subsequent Events [Abstract] | ' | ||||||||||||
Schedule of Real Estate Properties [Table Text Block] | 'A summary of open real estate purchase transactions as of August 13, 2014 is represented in the table below: | ||||||||||||
Property | Purchase price | Initial closing date | Amount paid in escrow | Date escrow opened | |||||||||
1 | $ | 3,500,000 | 12/11/14 | $ | 100,000 | 7/25/14 | |||||||
2 | 3,650,000 | 1/5/15 | 100,000 | 7/21/14 | |||||||||
3 | 2,450,000 | 12/1/14 | 100,000 | 8/13/14 | |||||||||
4 | 790,000 | 1/1/15 | 30,000 | 8/12/14 | |||||||||
5 | 480,000 | 1/31/15 | 5,000 | 8/12/14 | |||||||||
6 | 2,100,000 | 2/10/15 | 33,000 | 8/13/14 | |||||||||
7 | 595,000 | 1/31/15 | 10,000 | 8/13/14 | |||||||||
8 | 695,000 | 10/18/14 | 10,000 | 6/28/14 | |||||||||
9 | 820,000 | 10/18/14 | 45,000 | 6/28/14 | |||||||||
Total | $ | 15,080,000 | $ | 433,000 |
NOTE_1_BUSINESS_ORGANIZATION_N1
NOTE 1 - BUSINESS ORGANIZATION, NATURE OF OPERATIONS (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended |
Mar. 22, 2013 | Dec. 31, 2012 | Mar. 22, 2013 | |
Inventor of Certain Patents [Member] | PVM International Inc. (PVMI) [Member] | Vaporfection International Inc. [Member] | |
Vaporfection International Inc. [Member] | |||
NOTE 1 - BUSINESS ORGANIZATION, NATURE OF OPERATIONS (Details) [Line Items] | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | ' | 2,000,000 | 260,854 |
Notes Issued | ' | $1,000,000 | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | 100.00% |
Other Commitments, Description | ' | ' | 'In addition, the Company agreed to provide up to $1,600,000 in working capital to VII at the Company's sole discretion which included $175,000 paid to the inventor of certain patents including a warrant to purchase 5,000 shares (before stock dividend) of the Company's common stock. This transaction was closed in April 2013. |
Contributed Contribution Commitment | ' | ' | 1,600,000 |
Other Commitment | $175,000 | ' | ' |
Class of Warrant or Rights, Granted | 5,000 | ' | ' |
NOTE_2_SUMMARY_OF_SIGNIFICANT_2
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' | ' | ' |
Cash, FDIC Insured Amount | $250,000 | ' | $250,000 | ' | ' |
Cash, Uninsured Amount | 432,261 | ' | 432,261 | ' | 0 |
Advertising Expense | 286,784 | 161,005 | 430,008 | 415,257 | ' |
Research and Development Expense | 67,033 | 10,000 | 75,033 | 18,500 | ' |
Sales Returns and Allowances, Goods | 266,930 | 0 | 1,229,710 | 0 | ' |
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants (in Shares) | ' | ' | 529,016 | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per Item) | 0.001 | ' | 0.001 | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | ' | ' | 30,000 | 15,000 | ' |
Preferred Stock, Shares Outstanding (in Shares) | 3,000,000 | ' | 3,000,000 | ' | 3,000,000 |
Provision for Doubtful Accounts | ' | ' | 145,000 | ' | ' |
Property, Plant and Equipment, Transfers and Changes | 28,470 | ' | ' | ' | ' |
Series A Preferred Stock [Member] | ' | ' | ' | ' | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' | ' | ' |
Preferred Stock, Conversion Basis | ' | ' | '5 for 1 conversion feature | ' | ' |
Preferred Stock, Shares Outstanding (in Shares) | 3,000,000 | ' | 3,000,000 | ' | 3,000,000 |
Preferred Stock, No Par Value (in Dollars per share) | $0.00 | ' | $0.00 | ' | $0.00 |
Convertible Preferred Stock, Shares Issued upon Conversion (in Shares) | 15,000,000 | ' | 15,000,000 | ' | 15,000,000 |
Warrant [Member] | ' | ' | ' | ' | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 30,000 | 15,000 | 30,000 | 15,000 | ' |
Legislation Change in San Diego [Member] | ' | ' | ' | ' | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' | ' | ' |
Sales Returns and Allowances, Goods | $842,825 | ' | $842,825 | ' | ' |
Legislation Change in San Diego [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' | ' | ' |
Number of Licenses, Available | ' | ' | 130 | ' | ' |
Legislation Change in San Diego [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ' | ' | ' | ' | ' |
Number of Licenses, Available | 32 | ' | 32 | ' | ' |
NOTE_2_SUMMARY_OF_SIGNIFICANT_3
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedules of Concentration of Risk, by Risk Factor (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | ' | ' |
Accounts Receivable Amount | $1,113,944 | $1,864,506 |
Customer A [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Accounts Receivable Amount | 586,824 | 700,000 |
Concentration Risk, Percentage | 47.60% | 37.50% |
Customer A [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 0.00% | ' |
Gross Revenue Generated | 0 | ' |
Customer B [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Accounts Receivable Amount | 200,000 | 0 |
Concentration Risk, Percentage | 16.20% | 0.00% |
Customer B [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 57.80% | ' |
Gross Revenue Generated | 1,000,000 | ' |
Customer C [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Accounts Receivable Amount | 175,000 | 0 |
Concentration Risk, Percentage | 14.20% | 0.00% |
Customer C [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 10.10% | ' |
Gross Revenue Generated | 175,000 | ' |
Customer A, B and C [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Accounts Receivable Amount | 961,824 | 700,000 |
Concentration Risk, Percentage | 78.00% | 37.50% |
Customer A, B and C [Member] | Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 67.90% | ' |
Gross Revenue Generated | 1,175,000 | ' |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Accounts Receivable Amount | 1,233,944 | 1,864,506 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration Risk, Percentage | 100.00% | ' |
Gross Revenue Generated | $1,728,998 | ' |
NOTE_2_SUMMARY_OF_SIGNIFICANT_4
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Total potentially dilutive securities | ' | ' | 30,000 | 15,000 |
Warrant [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Total potentially dilutive securities | 30,000 | 15,000 | 30,000 | 15,000 |
NOTE_2_SUMMARY_OF_SIGNIFICANT_5
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Property, Plant and Equipment, Estimated Useful Lives | 6 Months Ended |
Jun. 30, 2014 | |
Vehicles [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated Useful Life | '5 years |
Furniture and Fixtures [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated Useful Life | '5 years |
Office Equipment [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated Useful Life | '3 years |
NOTE_3_ACQUISITION_Details
NOTE 3 - ACQUISITION (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 22, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
NOTE 3 - ACQUISITION (Details) [Line Items] | ' | ' | ' | ' |
Goodwill | ' | $1,100,037 | ' | $1,090,037 |
Vaporfection International Inc. [Member] | ' | ' | ' | ' |
NOTE 3 - ACQUISITION (Details) [Line Items] | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Description | 'The Company issued 260,854 warrants to shareholders of VII allowing them to purchase one (1) share of Medbox common stock at $.001 per share beginning April 1, 2014. | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | 260,854 | ' | ' | ' |
Fair Value Assumptions, Exercise Price (in Dollars per share) | $4.47 | ' | ' | ' |
Business Combination, Consideration Transferred, Liabilities Incurred | 470,000 | ' | ' | ' |
Business Combination, Consideration Transferred | 1,635,000 | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years | ' | ' | ' |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | '7 years | ' | ' | ' |
Goodwill | 895,000 | ' | ' | ' |
Increase (Decrease) in Other Accounts Payable and Accrued Liabilities | ' | ' | 10,000 | 195,000 |
Goodwill, Period Increase (Decrease) | ' | $205,000 | ' | ' |
Business Combination, Contingent Consideration Arrangements, Description | 'In addition, to the above warrants the purchase agreement and associated consulting contract with the prior management company of the business unit calls for additional shares of common stock to be issued in the event that the performance of the business unit exceeds $11,818,140 of accumulated EBITBA profitability over the subsequent 4 year operating period. | ' | ' | ' |
NOTE_3_ACQUISITION_Details_Sch
NOTE 3 - ACQUISITION (Details) - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 22, 2013 | Mar. 22, 2013 | Mar. 22, 2013 | Mar. 22, 2013 | Mar. 22, 2013 |
IP and Related Technology [Member] | Customer Relationships [Member] | Trademarks and Trade Names [Member] | Noncompete Agreements [Member] | Vaporfection International Inc. [Member] | |||
Vaporfection International Inc. [Member] | Vaporfection International Inc. [Member] | Vaporfection International Inc. [Member] | Vaporfection International Inc. [Member] | ||||
NOTE 3 - ACQUISITION (Details) - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Machinery & Equipment | ' | ' | ' | ' | ' | ' | $70,000 |
Intangible assets | ' | ' | 287,000 | 314,000 | 46,000 | 23,000 | ' |
Goodwill | 1,100,037 | 1,090,037 | ' | ' | ' | ' | 895,000 |
Total assets acquired | ' | ' | ' | ' | ' | ' | 1,635,000 |
Fair value of liabilities assumed | ' | ' | ' | ' | ' | ' | -469,000 |
Net fair value | ' | ' | ' | ' | ' | ' | $1,166,000 |
NOTE_4_INVESTMENTS_Details
NOTE 4 - INVESTMENTS (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 05, 2014 | Jun. 05, 2014 | Feb. 27, 2014 | Feb. 08, 2013 | 12-May-13 | Feb. 08, 2013 | 12-May-13 | 12-May-13 | 12-May-13 |
Founder [Member] | Founder [Member] | Bio-Tech Medical Software [Member] | Bio-Tech Medical Software [Member] | Bio-Tech Medical Software [Member] | Bio-Tech Medical Software [Member] | MedVend Holdings LLC [Member] | MedVend Holdings LLC [Member] | MedVend Holdings LLC [Member] | |||
Bio-Tech Medical Software [Member] | MedVend Holdings LLC [Member] | Maximum [Member] | Maximum [Member] | Amount Paid Upon Execution of the Contract [Member] | Amount Disbursed as an Additional Investment [Member] | ||||||
NOTE 4 - INVESTMENTS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment, Authorized Shares Availble for Purchase (in Shares) | ' | ' | ' | ' | ' | ' | ' | 833,333 | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | 50.00% |
Investment, Purchase Price | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | $4,100,000 |
Equity Method Investment, Additional Information | ' | ' | ' | ' | ' | 'The Company advanced $600,000 upon execution of this agreement for the right to purchase with the remaining balance of $900,000 due and payable in installments at various dates by August 25, 2013. On June 26, 2013, the Company notified Bio-Tech that it was canceling the agreements with them. | ' | ' | ' | ' | 'In May 2013, the three members of MedVend Holdings LLC were named in a lawsuit by that entity's minority shareholders alleging improper conveyance of the three members' ownership interest in MedVend Holding LLC to the Company. Accordingly, also in May 2013, Medbox filed suit against MedVend Holdings, LLC and the three members of that entity that were involved in the transaction. |
Payments to Acquire Trading Securities Held-for-investment | ' | ' | ' | ' | ' | 600,000 | ' | ' | 300,000 | 300,000 | ' |
Licensing Agreement, Term | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' |
Legal Fees | ' | ' | 4,800 | 4,800 | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Shares (in Shares) | ' | ' | 30,000 | 30,000 | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Value | ' | ' | 604,800 | 604,800 | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock, Value | $1,209,600 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTE_5_INVENTORIES_Details_Sch
NOTE 5 - INVENTORIES (Details) - Schedule of Inventory, Current (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Inventory [Line Items] | ' | ' |
Work in process and related capitalized costs | $656,942 | $878,956 |
Inventory | 1,545,311 | 1,269,454 |
Deposits on Dispensing Machines [Member] | ' | ' |
Inventory [Line Items] | ' | ' |
Inventory | 347,194 | 138,423 |
Vaporizers and Accessories [Member] | ' | ' |
Inventory [Line Items] | ' | ' |
Inventory | 456,675 | 193,575 |
Dispensing Machines [Member] | ' | ' |
Inventory [Line Items] | ' | ' |
Inventory | $84,500 | $58,500 |
NOTE_6_PROPERTY_AND_EQUIPMENT_1
NOTE 6 - PROPERTY AND EQUIPMENT (Details) - Schedule of Property, Plant and Equipment (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $190,599 | $161,781 |
Less accumulated depreciation | -35,409 | -21,123 |
Property and equipment, net | 155,190 | 140,658 |
Office Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 18,770 | 17,192 |
Furniture and Fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 74,404 | 73,567 |
Website Development [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 46,922 | 46,922 |
Product Development [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $50,503 | $24,100 |
NOTE_7_INTANGIBLE_ASSETS_Detai
NOTE 7 - INTANGIBLE ASSETS (Details) (Vaporfection International Inc. [Member]) | Mar. 22, 2013 |
Vaporfection International Inc. [Member] | ' |
NOTE 7 - INTANGIBLE ASSETS (Details) [Line Items] | ' |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
NOTE_7_INTANGIBLE_ASSETS_Detai1
NOTE 7 - INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | $871,363 | $715,179 |
Less accumulated amortization | -57,417 | -32,750 |
Intangible assets, net | 813,946 | 682,429 |
Distribution Rights [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | 314,000 | 314,000 |
Patented Technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | 403,363 | 332,179 |
Internet Domain Names [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | 131,000 | 46,000 |
Noncompete Agreements [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Intangible assets, gross | $23,000 | $23,000 |
NOTE_7_INTANGIBLE_ASSETS_Detai2
NOTE 7 - INTANGIBLE ASSETS (Details) - Schedule of Finite-Lived Intangible Assets, Estimated Useful Life | 6 Months Ended |
Jun. 30, 2014 | |
Distribution Rights [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets, estimated useful lives | '10 years |
Internet Domain Names [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets, estimated useful lives | '10 years |
IP and Related Technology [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets, estimated useful lives | '10 years |
Noncompete Agreements [Member] | ' |
Finite-Lived Intangible Assets [Line Items] | ' |
Intangible assets, estimated useful lives | '3 years |
NOTE_8_ACCOUNTS_AND_NOTES_RECE1
NOTE 8 - ACCOUNTS AND NOTES RECEIVABLE (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
NOTE 8 - ACCOUNTS AND NOTES RECEIVABLE (Details) [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Net, Current | $1,113,944 | ' | $1,113,944 | ' | $1,864,506 |
Sales Returns and Allowances, Goods | 266,930 | 0 | 1,229,710 | 0 | ' |
Note Receivable, Face Amount | ' | ' | ' | ' | 1,000,000 |
Note Receivable, Stated Interest Rate, Percentage | ' | ' | ' | ' | 5.00% |
Notes, Loans and Financing Receivable, Net, Noncurrent | 155,000 | ' | 155,000 | ' | 0 |
Notes, Loans and Financing Receivable, Net, Current | 0 | ' | 0 | ' | 115,000 |
Legislation Change in San Diego [Member] | ' | ' | ' | ' | ' |
NOTE 8 - ACCOUNTS AND NOTES RECEIVABLE (Details) [Line Items] | ' | ' | ' | ' | ' |
Accounts Receivable, Gross | 17,000 | ' | 17,000 | ' | ' |
Sales Returns and Allowances, Goods | $842,825 | ' | $842,825 | ' | ' |
NOTE_9_ALLOWANCES_AND_REFUNDS_
NOTE 9 - ALLOWANCES AND REFUNDS (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Negotiated Payments [Member] | Legislation Change in San Diego [Member] | Legislation Change in San Diego [Member] | Legislation Change in San Diego [Member] | Legislation Change in San Diego [Member] | Legislation Change in San Diego [Member] | ||||||
Legislation Change in San Diego [Member] | Maximum [Member] | Minimum [Member] | Minimum [Member] | ||||||||
NOTE 9 - ALLOWANCES AND REFUNDS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Licenses, Available | ' | ' | ' | ' | ' | ' | ' | ' | 130 | 32 | 32 |
Allowance for Doubtful Accounts Receivable, Write-offs | $22,500 | ' | $22,500 | ' | ' | ' | $22,500 | ' | ' | ' | ' |
Estimated Refund Provision | ' | ' | ' | ' | ' | ' | ' | 386,885 | ' | ' | ' |
Sales Returns and Allowances, Goods | 266,930 | 0 | 1,229,710 | 0 | ' | ' | 842,825 | 842,825 | ' | ' | ' |
Customer Refund Liability, Current | 314,940 | ' | 314,940 | ' | 0 | 88,000 | 314,940 | 314,940 | ' | ' | ' |
Customer Refundable Fees, Refund Payments | 71,945 | ' | 71,945 | ' | ' | ' | 71,945 | ' | ' | ' | ' |
Allowance for Doubtful Accounts Receivable, Period Increase (Decrease) | ' | ' | 145,000 | ' | ' | ' | 145,000 | ' | ' | ' | ' |
Allowance for Doubtful Accounts Receivable | $120,000 | ' | $120,000 | ' | ' | ' | ' | ' | ' | ' | ' |
NOTE_10_MARKETABLE_SECURITIES_2
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) (USD $) | 6 Months Ended | 0 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | 19-May-14 | Jun. 30, 2014 | |
MJ Holdings [Member] | MJ Holdings [Member] | |||
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) [Line Items] | ' | ' | ' | ' |
Marketable Securities, Current | $321,043 | $184,800 | ' | ' |
Marketable Securities, Number of Shares Held as Deposit (in Shares) | 7,000,000 | ' | ' | ' |
Marketable Securities, Value of Shares Held as Customer Deposit | 300,000 | ' | ' | ' |
Fair Value Inputs, Discount Rate | 12.00% | ' | ' | ' |
Marketable Securities, Restricted, Current | 196,000 | 184,800 | ' | ' |
Investment, Percentage of Profits Realized from Investment | ' | ' | 50.00% | ' |
Investment, Term of Investment | ' | ' | '6 months | ' |
Class of Warrant or Right, Outstanding (in Shares) | ' | ' | ' | 33,333 |
Class of Warrant or Rights, Granted (in Shares) | ' | ' | ' | 2 |
Class of Warrant or Rights, Exercised (in Shares) | ' | ' | ' | 10,825 |
Marketable Securities, Equity Securities | ' | ' | ' | $84,110 |
NOTE_10_MARKETABLE_SECURITIES_3
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) - Schedule of Marketable Securities (USD $) | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | ||||
Jun. 30, 2014 | 19-May-14 | Jun. 30, 2014 | 19-May-14 | Jun. 30, 2014 | Jun. 19, 2014 | Jun. 30, 2014 | 19-May-14 | |
Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Convertible Debt Securities [Member] | Convertible Debt Securities [Member] | |||
Warrant #1 [Member] | Warrant #1 [Member] | Warrant #2 [Member] | Warrant #2 [Member] | |||||
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) - Schedule of Marketable Securities [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant Fair Value | $125,043 | $98,532 | $0 | $95,866 | $40,933 | $2,666 | $84,110 | $0 |
Gain or Loss | 26,511 | ' | -1,147 | ' | 38,267 | ' | -10,609 | ' |
Fair Value at Conversion | $0 | ' | ($94,719) | ' | $0 | ' | $94,719 | ' |
NOTE_10_MARKETABLE_SECURITIES_4
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) - Schedule of Marketable Securities (Parentheticals) (Convertible Debt Securities [Member]) | 1 Months Ended |
Jun. 30, 2014 | |
Convertible Debt Securities [Member] | ' |
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) - Schedule of Marketable Securities (Parentheticals) [Line Items] | ' |
Conversion of the Warrant, shares | 10,825 |
NOTE_10_MARKETABLE_SECURITIES_5
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (MJ Holdings [Member], USD $) | 0 Months Ended | 6 Months Ended | ||
19-May-14 | Jun. 19, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Warrant #1 [Member] | Warrant #2 [Member] | Warrant #2 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' | ' | ' |
Warrant | '#1 | '#2 | '#2 | ' |
Stock price, $ | $8.69 | $4 | $7.77 | ' |
Exercise price, $ | $6.42 | $8.45 | $8.45 | ' |
Time to maturity, Years | '6 months | '6 months | '173 days | ' |
Annual risk-free rate, % | 0.05% | 0.05% | 0.07% | ' |
Annualized volatility, % | 70.00% | 70.00% | 70.00% | ' |
Black-Scholes Value per warrant, $ | $2.88 | $0.08 | $1.23 | ' |
Number of warrants/shares (in Shares) | 33,333 | 33,333 | 33,333 | 33,333 |
Total value of warrants/shares, $ (in Dollars) | $95,866 | $2,666 | $40,933 | ' |
NOTE_10_MARKETABLE_SECURITIES_6
NOTE 10 - MARKETABLE SECURITIES AND CUSTOMER DEPOSITS (Details) - Customer Advances and Deposits, Current (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Customer Advances and Deposits, Current [Abstract] | ' | ' |
Advance payments from customers | $397,500 | $127,550 |
Prepaid sales of vaporizers | 75,038 | 75,636 |
Total customer deposits | $472,538 | $203,186 |
NOTE_11_SHORTTERM_DEBT_Details
NOTE 11 - SHORT-TERM DEBT (Details) (USD $) | 0 Months Ended | 6 Months Ended | ||
Mar. 22, 2013 | Mar. 22, 2013 | Jun. 30, 2014 | Mar. 22, 2013 | |
Notes Payable, Other Payables [Member] | Related Party Notes Payable [Member] | D&O Insurance Financing [Member] | D&O Insurance Financing [Member] | |
NOTE 11 - SHORT-TERM DEBT (Details) [Line Items] | ' | ' | ' | ' |
Debt Instrument, Issuance Date | 22-Mar-13 | ' | ' | ' |
Debt Instrument, Maturity Date | 22-Apr-14 | ' | 5-Nov-14 | ' |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | 0.00% | ' | 4.25% |
Debt Instrument, Face Amount | ' | ' | ' | $137,160 |
Debt Instrument, Frequency of Periodic Payment | ' | ' | 'monthly | ' |
Debt Instrument, Periodic Payment | ' | ' | $15,511 | ' |
Debt Instrument, Term | ' | ' | '9 months | ' |
NOTE_11_SHORTTERM_DEBT_Details1
NOTE 11 - SHORT-TERM DEBT (Details) - Schedule of Short-term Debt (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Schedule of Short-term Debt [Abstract] | ' | ' |
Notes payable to unrelated third party | $0 | $75,000 |
Notes payable to related party | 516,674 | 111,794 |
Short term loan payable | 76,738 | 0 |
Total short-term debt | $593,412 | $186,794 |
NOTE_12_PREPAID_EXPENSES_AND_O2
NOTE 12 - PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Prepaid expenses: | ' | ' |
Rent | $21,951 | $3,962 |
Directors & officers insurance | 88,900 | 0 |
Audit | 25,000 | 25,000 |
Financial consultants | 12,083 | 20,833 |
Business report | 30,000 | 0 |
Other vendors | 39,632 | 39,446 |
Other current assets- | ' | ' |
Earnest money deposits | 140,000 | 0 |
Prepaid expenses and other current assets | $357,566 | $89,241 |
NOTE_13_RELATED_PARTY_TRANSACT1
NOTE 13 - RELATED PARTY TRANSACTIONS (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 3 Months Ended | |||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jul. 01, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Oct. 28, 2013 | Sep. 20, 2013 | Jun. 30, 2013 | Jul. 21, 2014 | Jul. 09, 2014 | Aug. 12, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | |
Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Founder [Member] | Related Party and Shareholder [Member] | |||||
Vincent Chase Inc. [Member] | Vincent Chase Inc. [Member] | Vincent Chase Inc. [Member] | Vincent Chase Inc. [Member] | Vincent Chase Inc. [Member] | Vincent Chase Inc. [Member] | Vincent Chase Inc. [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | ||||||
Subsequent Event [Member] | Annual Advisory and Consulting Service Fee [Member] | Monthly Advisory and Consulting Service Fee [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Related Party Note Payable #1 [Member] | Related Party Note Payable #2 [Member] | Related Party Note Payable 3 [Member] | |||||||||||
Monthly Advisory and Consulting Service Fee [Member] | |||||||||||||||||||
NOTE 13 - RELATED PARTY TRANSACTIONS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity Method Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | $1 | ' |
Related Party Transaction, Amounts of Transaction | ' | ' | ' | ' | 25,000 | 75,000 | 12,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150,000 |
Number of Promissory Notes | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | 150,000 | ' | ' | ' | 350,000 | 250,000 | 100,000 | 500,000 | ' | ' |
Due to Related Parties, Current | ' | ' | ' | ' | ' | ' | ' | 111,794 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 516,674 | ' |
Revenue from Related Parties | 0 | 0 | 1,000,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 |
Repayments of Related Party Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $75,000 | $500,000 | ' | ' | ' | ' | ' | ' |
NOTE_14_STOCKHOLDERS_EQUITY_De
NOTE 14 - STOCKHOLDER'S EQUITY (Details) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | |||||||
Feb. 03, 2014 | Dec. 19, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 05, 2014 | Jun. 05, 2014 | Nov. 30, 2011 | Dec. 31, 2012 | Jan. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
Founder [Member] | Founder [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Common Stock Issuance [Member] | |||||||
Bio-Tech Medical Software [Member] | MedVend Holdings LLC [Member] | Stock Issued to Founder and Shareholder [Member] | Stock Issued to Shareholder [Member] | Stock Issued to Founder [Member] | ||||||||||
NOTE 14 - STOCKHOLDER'S EQUITY (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | 485,830 |
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | ' | ' | $0.00 | ' | ' | $0.00 | ' | ' | $0.00 | ' | ' | ' | ' | ' |
Convertible Preferred Stock, Terms of Conversion | ' | ' | ' | ' | ' | ' | ' | ' | 'converted to common stock at a ratio of 1 (one) share of Series A Preferred Stock to 5 (five) shares of common stock | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Shares | ' | ' | ' | ' | ' | ' | 30,000 | 30,000 | ' | 3,000,000 | ' | ' | ' | ' |
Stock Repurchased and Retired During Period, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' |
Preferred Stock, Shares Outstanding | ' | ' | 3,000,000 | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | 3,000,000 | 3,000,000 | ' |
Legal Fees (in Dollars) | ' | ' | ' | ' | ' | ' | $4,800 | $4,800 | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Value (in Dollars) | ' | ' | ' | ' | ' | ' | 604,800 | 604,800 | ' | ' | ' | ' | ' | ' |
Treasury Stock, Shares | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of Stock, Price Per Share (in Dollars per share) | ' | ' | ' | ' | $5 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Common Stock (in Dollars) | ' | ' | $2,442,859 | $2,537,015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,427,859 |
Dividends Payable, Nature | ' | 'declared a 1:1 common stock dividend on each share of outstanding common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock Dividends, Shares | 14,762,875 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NOTE_15_COMMITMENTS_AND_CONTIN2
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | ||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jul. 01, 2014 | Aug. 01, 2011 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 17, 2013 | |
Office Lease, West Hollywood, California [Member] | Office Lease, West Hollywood, California [Member] | Office Facilities Lease, West Hills, California [Member] | Office Facilities Lease, Scottsdale, Arizona [Member] | Virtial Office Lease, Tokyo, New York, Seattle and Toronto [Member] | Retail/Cultivation Facility Lease [Member] | Vaporfection International Inc. [Member] | |||||
Subsequent Event [Member] | |||||||||||
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease Expiration Date | ' | ' | ' | ' | ' | 30-Jun-17 | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense, Minimum Rentals | ' | ' | ' | ' | ' | $14,397 | $1,300 | $1,420 | $390 | $7,400 | $1,981 |
Operating Lease, Rent Increase, Percent | ' | ' | ' | ' | 3.00% | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | 52,129 | 29,893 | 103,602 | 43,914 | 14,828 | ' | ' | ' | ' | ' | ' |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '1 year |
Description of Lessee Leasing Arrangements, Operating Leases | ' | ' | ' | ' | ' | ' | ' | ' | 'month to month basis | ' | ' |
Escrow Deposits Related to Property Sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | 140,000 | ' |
Payments to Acquire Real Estate | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4,639,000 | ' |
NOTE_15_COMMITMENTS_AND_CONTIN3
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Future Minimum Rental Payments for Operating Leases (USD $) | Jun. 30, 2014 |
Office Lease [Member] | ' |
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Future Minimum Rental Payments for Operating Leases [Line Items] | ' |
2014 | $88,968 |
2015 | 177,936 |
2016 | 177,936 |
2017 | 88,968 |
2018 | 0 |
2019 | 0 |
Total | 533,808 |
Retail/Cultivation Facility Lease [Member] | ' |
NOTE 15 - COMMITMENTS AND CONTINGENCIES (Details) - Schedule of Future Minimum Rental Payments for Operating Leases [Line Items] | ' |
2014 | 44,400 |
2015 | 88,800 |
2016 | 88,800 |
2017 | 88,800 |
2018 | 88,800 |
2019 | 29,600 |
Total | $429,200 |
NOTE_16_SUBSEQUENT_EVENTS_Deta
NOTE 16 - SUBSEQUENT EVENTS (Details) (USD $) | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||||||||||||
Jul. 21, 2014 | Jul. 09, 2014 | Aug. 12, 2014 | Jul. 23, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 23, 2014 | Jul. 23, 2014 | Jul. 23, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 21, 2014 | Jul. 19, 2014 | Jul. 23, 2014 | Aug. 13, 2014 | Jul. 28, 2014 | Jul. 23, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 23, 2014 | Jul. 22, 2014 | Aug. 06, 2014 | Jun. 30, 2014 | |
Founder [Member] | Founder [Member] | Founder [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Chief Executive Officer [Member] | Extension Agreement [Member] | Extension Agreement #2 [Member] | Convertible Debt [Member] | Convertible Debt [Member] | Convertible Debt [Member] | Convertible Debt [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | MJ Holdings [Member] | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Annual Salary [Member] | Living Expenses [Member] | Annual Bonus [Member] | Annual Cash Bonus [Member] | Annual Equity Bonus [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | MJ Holdings [Member] | Medbox Porperty Investments, Inc. and MJ Property Investments, Inc. [Member] | Medbox Porperty Investments, Inc. and MJ Property Investments, Inc. [Member] | MJ Property Investments, Inc. [Member] | MJ Property Investments, Inc. [Member] | MJ Property Investments, Inc. [Member] | MJ Property Investments, Inc. [Member] | MJ Property Investments, Inc. [Member] | Medbox Property Investments, Inc. [Member] | |||
PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | PVM International Inc. (PVMI) [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Medbox Porperty Investments, Inc. and MJ Property Investments, Inc. [Member] | Medbox Porperty Investments, Inc. and MJ Property Investments, Inc. [Member] | Debt Instrument, Tranche One [Member] | Debt Instrument, Tranche Two [Member] | Debt Instrument, Tranche Three [Member] | Maximum [Member] | ||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||
NOTE 16 - SUBSEQUENT EVENTS (Details) [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of Related Party Debt | $75,000 | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Rights, Granted (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Class of Warrant or Rights, Fair Value Granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53,866 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 1,000,000 | 1,000,000 | 3,000,000 | ' | ' | ' | ' | 249,000 | ' | ' | ' | ' | ' | ' |
Proceeds from Convertible Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | 12.00% | ' | ' | 18.00% | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $11.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Frequency of Periodic Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'seven monthly installments, commencing six months from issuance | ' | ' | ' | ' | 'six monthly | ' | ' | ' | ' | ' | ' |
Debt Instrument, Payment Terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The Company may make such payments in cash (in which event the Company will pay a 30% premium) or, subject to certain conditions, in shares of common stock valued at 70% of the lowest volume weighted average price of the common stock for the 20 prior trading days. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Terms of Conversion Feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'common stock issuable upon conversion of, or payable as interest on, the Debentures, within 45 days of the initial closing date under the Purchase Agreement, and to have such registration statement declared effective within 120 days of the initial closing date. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employment Agreement, Term | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other Commitments, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'term will automatically be extended for successive additional one-year terms, unless either party provides written notice to the other 90 days prior to the expiration of the initial term or any successive term | 'three monthly rent payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other Commitment | ' | ' | ' | 330,000 | 2,500 | 250,000 | 125,000 | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Mr. Marsala will also be entitled to an award of restricted stock units, to be issued within 90 days of the effective date of the Employment Agreement, under an equity incentive plan to be adopted by the Company, in the amount of the greater (by value) of 50,000 shares of common stock or $500,000 of common stock based on the volume weighted average price for the 30 day period prior to the date of the grant. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee Agreement, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'entitled to payment of 1.5 times his annual salary and payment of all remaining lease payments or lease breakage fees on living quarters in the West Hollywood area up to the sum of $2,500 per month, unless the Company takes over the lease, and provided that the Company's Chief Financial Officer has had a reasonable opportunity to review and approve in writing any such lease or extension thereof or amendment or modification thereto in advance of Mr. Marsala binding himself thereto. Termination by the Company within 365 days of a Change of Control (as defined in the Employment Agreement) in the absence of Cause will conclusively be deemed a termination by the Company without Cause. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Real Estate Purchase Agreements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to Acquire Real Estate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,000 | 15,000 | ' | ' | ' | ' | ' | ' | 13,565,000 | 399,000 | 150,000 | ' | 2,500,000 | ' | ' | ' | ' |
Escrow Deposit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 378,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated Future Escrow Payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 82,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense, Minimum Rentals | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' |
Debt Instrument, Periodic Payment, Interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,490 | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Jan-15 | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Earnest Money Deposits Outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($100,000) | $10,000 | ' | ' | ' | ' |
Lessee Leasing Arrangements, Operating Leases, Term of Contract | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' |
NOTE_16_SUBSEQUENT_EVENTS_Deta1
NOTE 16 - SUBSEQUENT EVENTS (Details) - Schedule of Real Estate Properties (Retail Site [Member], USD $) | 0 Months Ended |
Aug. 13, 2014 | |
Real Estate Properties [Line Items] | ' |
Purchase Price | $15,080,000 |
Amount Paid to Escrow | 433,000 |
Property 1 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 3,500,000 |
Initial Closing Date | '12/11/2014 |
Amount Paid to Escrow | 100,000 |
Date Escrow Opened | '07/25/2014 |
Property 2 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 3,650,000 |
Initial Closing Date | '01/05/2015 |
Amount Paid to Escrow | 100,000 |
Date Escrow Opened | '07/21/2014 |
Property 3 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 2,450,000 |
Initial Closing Date | '12/01/2014 |
Amount Paid to Escrow | 100,000 |
Date Escrow Opened | '08/13/2014 |
Property 4 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 790,000 |
Initial Closing Date | '01/01/2015 |
Amount Paid to Escrow | 30,000 |
Date Escrow Opened | '08/12/2014 |
Property 5 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 480,000 |
Initial Closing Date | '01/31/2015 |
Amount Paid to Escrow | 5,000 |
Date Escrow Opened | '08/12/2014 |
Property 6 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 2,100,000 |
Initial Closing Date | '02/10/2015 |
Amount Paid to Escrow | 33,000 |
Date Escrow Opened | '08/13/2014 |
Property 7 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 595,000 |
Initial Closing Date | '01/31/2015 |
Amount Paid to Escrow | 10,000 |
Date Escrow Opened | '08/13/2014 |
Property 8 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 695,000 |
Initial Closing Date | '10/18/2014 |
Amount Paid to Escrow | 10,000 |
Date Escrow Opened | '06/28/2014 |
Property 9 [Member] | ' |
Real Estate Properties [Line Items] | ' |
Purchase Price | 820,000 |
Initial Closing Date | '10/18/2014 |
Amount Paid to Escrow | $45,000 |
Date Escrow Opened | '06/28/2014 |