SOURCE: Medbox

Medbox

January 09, 2015 09:15 ET

Medbox Founder Votes to 'Lean-Out' Director and Officer Compensation

Founder Announces Formation of "Board Advisory Committee" and Key Additions to Board

LOS ANGELES, CA--(Marketwired - Jan 9, 2015) - P. Vincent Mehdizadeh - Founder and Majority Shareholder of Medbox, Inc. (OTCQB: MDBX) filed a written consent action with the Securities and Exchange Commission that added 4 new directors with key industry experience in the disciplines of consulting, technology, and security. In addition, the company unveiled its Board Advisory Committee.

"We are taking the company back to what made us successful in the first place, keeping a lean budget, capitalizing on our industry best patents, targeting key endeavors, communicating with shareholders, and being able to react quickly to regulatory changes as new opportunities present themselves," stated Vincent Mehdizadeh, Founder and Majority Shareholder, at Medbox. "The action taken today will allow the company the freedom to operate again with all hands on deck." 

Mehdizadeh clarified that the prior independent board members have all been asked to return, at their discretion, either on the board of directors at their regular salaries or on the board advisory committee at a far reduced fee. The existing CEO and CFO, Guy Marsala and Doug Mitchell, have been asked to return as consultants to the company to make the transition as seamless as possible. The company's former Vice-President, Matthew Feinstein, shall be interim President until a replacement can be sourced. Feinstein will then return to his role as Vice-President.

"We spent millions last year in director and officer compensation and while their impressive backgrounds in combination with the risk factors inherent to the industry we operate in might warrant such compensation, the company is better off reducing overhead and making a push this year to get profitable again. We have one newly elected independent director at present and have confirmed at least another independent joining the company by the end of January along with any of the prior independent directors looking to return to the company in that capacity." 

The new look board is as follows:

Matthew Feinstein 

Matthew Feinstein began consulting for Medbox in June 2013, and was promoted to Vice President in February 2014. He also served as a director of the Company from April 2014 until October 2014. Mr. Feinstein was Operational Supervisor at Redbox from 2009 until 2011. He was subsequently recruited to become Director of Operations at minuteKEY, a self-service key duplicating kiosk company from 2011 to 2012. Mr. Feinstein earned an undergraduate degree in Political Science at the University of California, Berkeley.

David Trecek 

Mr. Trecek is a thirteen-year veteran of the security & surveillance industry. He is a seasoned C-Level manager who has designed and deployed enterprise class video surveillance systems for various national gaming providers such as Mandalay Bay, Bellagio, Harrah's, Lakes Entertainment, and multiple Native American tribes. He also managed the contract to deploy smaller footprint systems for the YUM! Brands portfolio: (KFC, Pizza Hut, Taco Bell) and their respective franchisees.

Mr. Trecek is well versed in the areas of video surveillance, access control, alarm monitoring, remote video, voice, data and telecom. 

Jaime Ortega 

Jaime Ortega first started with the Company in 2010 during its early stages of corporate development. He was the Company's Field Service Manager overseeing day-to-day operations for Medbox machine maintenance and point-of-sale software updates with the company's information technology developer. Mr. Ortega has over 10 years' experience with computer repair, networking and software feature implementation. He helped to establish every Medbox dispensary location, as well as train employees and operators on key industry insight and knowledge.

P. Vincent Mehdizadeh 

P. Vincent Mehdizadeh founded Medbox's main subsidiary, Medicine Dispensing Systems, in February 2008. He commenced operations for that company in 2010, and in December of 2011 sold that company to what became Medbox, Inc. Mr. Mehdizadeh served as senior consultant from December 2012 until May 10, 2013 for Medbox, Inc. and then transitioned to Chief Operations Officer and Board Chairman for Medbox, Inc. through May of 2014. Mr. Mehdizadeh was responsible for creating the 2 main patents behind the company's technology, helping to assemble the talented management team at Medbox, and also developing the concept behind the business models driving revenue for the company.

"The newly elected board is serving at a fraction of what was being paid to our prior board. I feel we have also added key industry experience and knowledge where it is needed most, on the board," stated Matthew Feinstein. "In addition, we have a fantastic Board Advisory Committee that we feel will help us improve as a company."

The Board Advisory Committee consists of a tax/financial expert, marijuana industry experts, a retired police chief, and a pharmacy industry expert. Their background and relevant experience is listed as follows:

Mario Cerreto, CPA

A graduate from the University of California Santa Cruz, Mario has over 6 years professional experience. Mario launched his career in accounting with Price Waterhouse & Coopers, LLP an international professional services Firm. There he led financial statement audits and reviews of publicly traded companies, developed and implemented key internal control procedures, and acquired technical accounting exposure to IPOs, debt restructuring, and revenue recognition projects. Mario transitioned to an Internal Audit role within the largest Non-Profit Healthcare Organization in Southern California, where he acquired significant experience in business process analysis and compliance. Then Mario joined a boutique accounting Firm in San Diego where he specialized in consulting and tax planning for small businesses and individuals, including Medical Marijuana dispensaries. Mario then established New Era CPAs, a full service Firm dedicated to the medical marijuana community. Mario specializes in include strategic tax planning and compliance projects while managing the day to day operations of the Firm. 

Dr. Robert Melamede, Scientist and Industry Expert

Dr. Melamede has a Ph.D. in Molecular Biology and Biochemistry from the City University of New York. He retired as Chairman of the Biology Department at University of Colorado, Colorado Springs in 2005, where he continues to teach. Dr. Melamede is recognized as a leading authority on the therapeutic uses of cannabinoids, and has authored or co-authored dozens of papers on a wide variety of scientific subjects. Dr. Melamede also serves on the Scientific Advisory Board of Americans for Safe Access, the Unconventional Foundation for Autism, The World Aids Institute, Board Tim Brown Foundation (The Berlin Patient), Phoenix Tears Foundation, and regularly consults with professional and lay persons around the world regarding cannabis and health issues. He also served as a director of Newellink Inc, a Colorado-based company specializing in cancer research.

Edward M. Merrick, Jr., Retired Police Chief

Mr. Merrick has a distinguished 39 year law enforcement career and is a retired Chief of Police for the City of Plainville Massachusetts. Mr. Merrick rounds out the committee and is Instrumental in developing security protocols in all phases and components of a medical marijuana dispensary operation; including physical perimeter and interior security for grow and dispensary operations, product security to prevent theft or diversion and transportation and delivery security protocols.

Luke Kleyn, R.Ph. Chief Operating Officer-KMR Pharmacy Advisors

Mr. Kleyn is a Registered Pharmacist with more than 36 years of leadership experience in the pharmacy industry. He is known, in the marketplace, for developing innovative strategies to optimize growth, financial outcomes and improved operations while mitigating risk. He was Regional Vice President of PBM Sales & Service and Vice President of Clinics for the Walgreen Company. Mr. Kleyn was the primary architect for Walgreen's 90-Day Retail strategy and was responsible for many emerging strategies including the launch of On-Site Pharmacies at Medical Centers & Specialty Clinics and the launch of Walgreen's Take Care Clinics (now Healthcare Clinics).

Currently, Mr. Kleyn is the Chief Operating Officer with KMR Pharmacy Advisors. KMR provides independent pharmacy consulting, with specific focus on all aspects of pharmacy, for Retail Pharmacies, Hospitals, Medical Centers, PBM's and Managed Care Organizations. He has developed highly customized solutions for his clients and understands the unique complexities inherent with the growth, financial, operational and risk management related to pharmacy. Mr. Kleyn has agreed to join the Medbox Board of Directors and will be appointed as an independent director in late January.

Mehdizadeh also addressed the proposed restatement set into motion by current management referenced in the company's 8-K of December 30, 2014. He stated, "We will be evaluating the impact of the proposed $403,000 of revenue being shifted from 2013 to the first 2 quarters of 2014 by hiring a qualified 3rd party accounting firm that will have the benefit of having all available information prior to making any conclusions as to whether, in their professional opinion, restatements should occur based on GAAP, relevancy, and materiality. New management will then communicate the findings to the shareholders and either restate or confirm prior financials accordingly. We believe this is the most proficient route based on the fact that the company's prior CFO and current auditor have disagreed with management's position on the matter and have stated that revenue was recognized correctly." 

To view the full text of the consent action as filed with the SEC, please visit the company's OTC Markets page, by clicking here.

About Medbox, Inc:

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

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