ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

Overall, I think that Gregory FCA did a good job with this PR and presented SCRC as favorably as it could given the circumstances.

That being said, spinning in order to present as good a picture as possible to the Street is one thing (and is SOP for ALL public companies, so in this regard, it is not a good or a bad thing -- just understand that this is what is going on), but retail shareholders here should be sure to sift thru this PR and be able to distinguish spin from reality.

For example...

Will Report Preliminary Fiscal 2014 Revenues of over $31 Million and Profitable Second Half of Year
Now Projecting First Quarter 2015 Net Income of over $400,000 on Revenues of more than $9.5 Million

Notice how the PR avoids comparing Q1'15 to Q4'14.

And notice how the PR simply throws out this $31M revenue number and describes it as "Fiscal 2014" so as to make the $9.5M of Q1'15 revenues look more impressive (i.e. hoping that newbies will see "WOW! $9.5M quarterly means $38M annually, which is an over 25% increase over the $31M from 2014!!!").

BUT, the reality is that almost all of this $31M in Fiscal 2014 revenues occurred in Q3'14 and Q4'14, so the true analysis would be comparing the $62M run rate that this $31M should TRULY be representing on an annual basis to the $38M annual run rate that the $9.5M of Q1'15 revenues would be representing. And in this light, it is not favorable.

Furthermore, notice also that it simply states that Fiscal 2014 was "profitable" without saying that Q3'14 itself earned $1.5M or what Q4'14 earned (which SCRC knows by now what it was, and that it was higher than Q3's $1.5M). IMO, this was in order to NOT show an unfavorable comparison to the measly $400k in net income for Q1'15.

Again, not faulting Gregory FCA for this as they are doing their job by presenting SCRC in as favorable a light as possible, but just sharing w/retail folks here what is fact vs fiction and what is spin vs reality...


As another example...

As of December 31, 2014, it is anticipated that the Company will have

over $1.3 million in working capital, an approximately $3 million

improvement in liquidity over the course of fiscal 2104. In addition, the

Company has a $4 million working capital line of credit

Notice that it provides zero guidance on working capital CURRENTLY. There is a reason why balance sheet data is presented as to what the balance is ON THE LAST DAY OF THE QUARTER, because telling folks how much cash or A/R or A/P or the O/S count was 3 months ago is useless -- the market wants to know how much you have NOW. And it is a virtual certainty that SCRC's working capital even as of 2/28/15 is much lower than it was at 12/31/14.

Notice also that it is still touting the broad $4M LOC from Triumph, but WITHOUT disclosing (not that it has to disclose this, but it is important for shareholders to know this) the fact that the amount of this LOC that they are legally entitled to draw down is only 85% of Main Ave's A/R balance. So if Main Ave's MAR numbers drop to say $2M, and let's say half of it is in A/R (due to the time it takes to both fill a Rx as well as to receive payment from the insurance company), then this means that this "$4M" LOC is in reality only $850k.

And as I stated in a prior post, if SCRC had drawn down MORE than this already, then it will need to immediately pay it down so that the net remaining outstanding balance does not exceed this $850k. And in this regard, we know that SCRC already disclosed that it had already drawn down on the LOC and used some of this credit line to pay off some debt (i.e. replaced debt with debt, so simply shuffling deck chairs, but saving some dough due to lower interest rate on the new debt)

The reality is that this LOC is currently of no incremental value to SCRC as the low A/R balance for Main Ave combined with the fact that SCRC has already drawn down on it to pay off other debt simply means that there is hardly anything left for SCRC to draw down on to use for anything of substance -- at least not until Main Ave numbers significantly increase...


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The absence of any new updates on the two LOI's tells us that it is still in process. And re: these potential partial equity acquisitions, folks need to keep in mind that if the amount of the LOC that is available to be tapped into is now virtually ZERO, and the amount of cash on hand for SCRC is rapidly dwindling due to rapidly declining revenues... ...then one must ask this question: WHAT IS THE MOST LIKELY WAY THAT SCRC CAN PAY FOR THESE ACQUISITIONS, EVEN IF THEY ARE ONLY PARTIAL ACQUISITIONS? Retail shareholders would be wise to be prepared for anything in this regard.

The absence of any mention re: RapiMed tells us that they have likely still not shipped the original order to Hong Kong AND (more importantly), they have yet to even make any sales in Hong Kong (because if they did, not only would the product be in Hong Kong by now, but it would have been offloaded and shipped to the end-customer as well).

Also notable is the absence of any mention of the partnerships with either Jungle Jim's and United Apothecary.