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So whereas Oct earnings were $5.6M it can be pretty safe to say Nov(guess)will be at least $5.0M that alone when up against 135m O/S would put us somewhere around .0075 EPS for the next quarter already WITH JUST 2 MONTHS
Just think about it
I agree to just do a reverse split to move a company to a large exchange can be counter productive. The only good time is when there is a large cash flow and revenue records reporting.
In the case with scrc I would say there needs to be more Q's of positive earnings and expanded business operations.
So at this time I wouldn't support a reverse split.
if everything is true the market cap on the OTC can grow just fine
Though moving it with a 1 for 40-50 split would be doable, a 3 for 1 split at .40 would be more of a sound base
Posts should be about helping this company and pushing it forward
The Q for Q4 will be out in Feb of 2015
What happened in the 3Q in 2013 is this as compared to 3Q 2014, this is all that most investors are concerned about not Joey Z
As I stated earlier most care about the company making them a profit for which this company is doing.
I believe most don't care about Joey Z and the core they DID not drive this company into a 10q 3rd quarter EPS OF .011 [or did they? (that's a joke)]
So lets talk more about SCRC THE COMPANY and less about this Joey Z
I think most of the posters here care more about the performance of SCRC, not Joey Z.
It's pity we see so much targeted hate and scrutiny by one person,
but he does not look at the real numbers
and new amendments this company had flourish too!!!
Gotta tip my head to bob and his team, big turnaround!
I learned something from JOSEPH ZAMPETTI re: SCRC today!
I learned that if you add the words "I spoke to a substantial shareholder today" in front of a sentence that includes the same mis-statements, bad math, and revisionist history that you have already been called on the carpet for yourself, that it will magically make these statements true, LOL...
LOL, he has been around as long as I have, and we respectfully do not see eye-to-eye on anything re: SCRC, in particular my views that JOEY Z and the CORE PIPE-holders are criminals and con artists who have destroyed SCRC's sp over the past 18 months and that their advice to SCRC investors and potential investors over the past 18 months has been not only toxic but self-serving... ...do your own DD on this individual if you wish...
I hope that you did not buy in during the P&D last year. If so, I hope you have been able to navigate thru the volatility and find a way to lower your cost basis rather than simply hold thoughout this entire time. The individual of which you speak, like many others who were self-professed CORE PIPE-holders and associates of JOSEPH ZAMPETTI, had accomplished his short-term objective long ago...
GLTU
how was main avenue financed?
On January 29, 2014, Implex, which is owned by our legal counsel and related party, Richard C. Fox, entered into a stock purchase agreement to acquire from MAVP, located in Clifton, New Jersey, for $550,000.
The payment of the purchase price of $550,000 is as follows: The initial installment payment of $475,000 was made via a $175,000 payment directly from the Company on Implex’s behalf and $300,000 in borrowings obtained by Implex
Subsequently in October 2014, the Implex ownership interest in MAvP was transferred to the Company for no additional consideration
Oh, my… …so JOSEPH ZAMPETTI and his CORE PIPE-holders are now touting that “between Seaside and the PIPE shares, that there is only about 6M shares left in the overhang that needs to be flushed thru”, and that only Satan himself would try to deceive the market by claiming that the number of shares in the overhang is 30M -- so they are declaring the waters to be safe and warmly invite anyone with money to come in for a swim because the water’s fine! Just ignore the sign that states that you are on Amity Island, LOL…
Very interesting number, if I do say so myself.
Interesting Reason #1
Approx 20M of the 22M shares of .05 PIPE stock have already unlocked since the first tranches of these unlocked in the beginning of JUL-2014. And approx 2M of Seaside’s 5M shares have still yet to flush thru IMO (due primarily to the higher pricing of these tranches relative to the .06x pricing of the shares that likely have flushed thru).
So this means that by JOEY Z’s and the CORE PIPE-holders own estimation, 16M PIPE shares have been dumped already. 20M – 16M = 4M unsold. 4M unsold + 2M belonging to Seaside still unsold = 6M in the overhang, according to JOEY Z.
But how can this be (shock!) if JOEY Z and the CORE PIPE-holders are holding their shares in a vault and don’t intend to sell a single share???
Approx 30M shares have traded since the first tranches of the .05 PIPE stock unlocked, so over half of the volume over the past 4.5 months have been related to dumping by the CORE PIPE-holders. Just think of where the sp would be if the supply of shares had been cut by more than half over the past 4.5 months… …the historical tape bears this out as well as it can be seen where the heavy liquidations have occurred in correlation with the unlocking.
Interesting Reason #2
As we all know, anyone can spout off a number and insist that it is true. Me? I prefer to simply go by the SEC filings. So let’s go read the filings with our friend “Math”, shall we? So, according to the SEC filings, the following represent the dilution that has occurred since Q2’14 began. Why the beginning of Q2’14? I chose this timeframe because prior to this period, whenever restricted stock unlocked, we would fairly quickly see the associated liquidation occur in the market within the following days. However, something happened in Q2’14 where this stopped occurring. My theory is that because the sp tanked big time during this period and so all the financiers who held shares were now underwater and had no desire to sell until their desired profit levels can be realized when the sp rose again. So, without further ado, here is the summary of dilution that has hit the float since 4/1/14 but for which no clear signs of liquidation have occurred yet:
Priced at .0665 --- 756,400 shares (this does NOT belong to Seaside)
Priced at .09x ----- 3,490,005 shares
Priced at .10x ----- 1,826,366 shares
Priced at .11x ----- 3,646,761 shares
Priced at .12x ----- 4,587,573 shares
Priced at .13x ----- 1,388,227 shares
Priced at .14x ----- 3,097,564 shares
Priced at .15x ----- 836,724 shares
Priced at .16x ----- 1,003,442 shares
Priced at .17x ----- 1,900,262 shares
Priced at .18x ----- 170,073 shares
Priced at .19x ----- 953,378 shares
Priced at .20 ------- 937,321 shares
Priced at .2765 ---- 597,756 shares
And what does this total come out to? Over 25M shares that are still lurking in the float, most likely because of their higher price levels, which will consistently provide pushback and blow headwinds into any runup once you get into the mid-teens (as we’ve seen on multiple occasions already over the past few months). This is because the mid-teens is the level at which the lowest priced shares listed above will realize profit levels that can begin satisfying the financiers who hold them. So in the absence of a major catalyst (or P&D – hint, hint) that can generate a boatload of liquidity, it will be a while before all these shares flush thru. And, as I’ve stated multiple times, until the dilutive impact of these shares flush thru, there will continue to be a divergence between company operational success and shareholder success as the sp will continue to be out of sync with and not be reflective of SCRC’s operational results.
Does it mean “DON’T BUY!” No, of course not. There is plenty of data in the public space that warrants a reasonable speculative thesis for SCRC. However, does it also mean “HOLD BUT NEVER TAKE PROFITS!” Similarly, the answer is once again an emphatic NO.
And, keep in mind that the share count numbers I listed above do NOT include ANY of the shares belonging to either the CORE PIPE-holders (~22M shares) or Seaside (~5M shares). According to JOSEPH ZAMPETTI and the CORE PIPE-holders, there is approx 6M combined shares between the PIPE and Seaside out of the original combined 27M shares that are still lurking in the overhang. No way to verify this, but just for giggles let’s take what they say at face value, so we can take this 6M and add it to the 25M+ shares listed above, and we arrive at 31M+ shares that are still clogging the SCRC toilet waiting for Roto-Rooter to come and flush them thru…
31M shares. Yes, I'm sure JOEY Z knows by now that the devil is very much in the details...
Use this info however you wish. Time a proper entry to stake out a long position. Trade around the predictable volatility that this roadmap provides. I don’t care. Just be smart, arm yourself with real facts, and make yourselves some money instead of simply being pawns used to make money for JOSEPH ZAMPETTI and his fellow criminal CORE PIPE-holders…
Saw this from JOEY Z out in the public space again:
There has been rampant discussion of an ave of .50. Well thats just very silly as correct me if Im wrong but SCRC traded quite a few shares at .10 to .15 before its SHORT TERM ASCENT TO .50. The level of desperation is increasing as he can no longer talk the stock in. In addition there were only 2 days that SCRC traded at $1.00. It is always stated that over 18 months ago that scrc went from $1 to .08 cents. I guess it never went from .10 to 1.00 it just went straight down from 1 to .10.
I, along with others, was told that maybe we should leave SCRC and go for a cheaper penny stock. The latter of your comment is accurate.
Food for thought:
Those who are long SCRC should ask yourself this question: How do you determine gains? You base it off of your avg cost basis, right? So, to that end, everyone’s gain at any particular sp level is a different amount and is based upon their individual cost basis, no?
So if you bought into SCRC at various levels of the P&D last year and held all your shares in a vault the way that JOSEPH ZAMPETTI and the CORE PIPE-holders claim to have done, then let’s assume your avg cost basis is .50. When the sp bottoms out at .08, your basis doesn’t simply disappear and magically become .08, does it? Of course not. If you held the way that JOSEPH ZAMPETTI and the CORE PIPE-holders encouraged you to do and claim to have done themselves, then your cost basis remains at .50. The only folks whose cost basis gets erased and re-set are those who dumped and “rinsed and repeated” by scooping up more shares at the bottom… …OR dumped while claiming to have held while encouraging others to buy AND had their cost basis re-set via being given either 0.00 or 0.05 PIPE shares (and for most of these illustrious con artists they were given both 0.00 and 0.05 PIPE shares).
Why is this important to keep in mind? Because if anyone truly held their .50 basis shares, they would NEVER view a modest bump in the sp from .08 to .11-.12 as a 37.5 to 50% gain – they would view it as simply a modest ho-hum 6-8% “recovery”, because it only reduced their losses from 84% to 76-78%. Only those who dumped their higher cost shares (or received so many 0.00 and 0.05 shares that their basis effectively dropped to the .05 neighborhood) would speak glowingly of where the sp is currently at when – in theory, had they truly held all their shares – they would still be down 76-78%.
In particular, this is further illustrated by how JOSEPH ZAMPETTI and his fellow criminal CORE PIPE-holders speak of “not being satisfied with 37.5-50% gains” and holding their shares in a vault because they are looking for a 10-bagger when the sp hits near $1 and higher next year as they are touting. Think about this for just half of a nano-second.
Would anyone with a .50 basis consider a sp level of .11-.12 to be a 37.5-50% gain? And would anyone with a .50 basis even think of a sp of $1 as being a “10-bagger” or more? No and no. Only those with a basis of .05 would even consider .50 to be a 10-bagger. For those with a basis of .50, they would only see this as breaking even.
No one with a true cost basis of .50-1.00 would even dream of a 10-bagger at this time. That would require the sp to go from .12 to the 5.00-10.00 levels by 2015 according to the touts – touts that, if you look back over the past year or so, always seem to include the timeline of “just a few more months” or “next quarter” before KABOOM time… …just long enough but not too long to entice holders to keep on holding. Any talk of “10-baggers” by the next few quarters or even by the time the calendar turns to 2016 is logically only from those shareholders who hold shares with a cost basis around or under .10-ish. Definitely not by anyone who truly has a basis of .50-ish.
So ask yourselves this:
How can JOSEPH ZAMPETTI and his CORE PIPE-holders have held all those shares that they claim to have purchased when they loaded up during the epic P&D last year (if you go by all the thousands of touts they made, they bought nearly everyday as the sp ran up to $1 – heck, based on their claims of buying, they would have owned twice the O/S count by now, LOL)… …but yet be so giddy when the sp goes from .08 to .11-.12 and how they look forward to 10+-bags when the sp creeps up towards $1 again?
The answer is: They can’t do both. It is physically and mathematically impossible.
The only way that an investor’s brain will ever permit him/her to view and speak of the current sp level of .11-.12 as a 50% gain or even a double is if their “vault” holds shares that possess an avg cost basis of .05-.08 and NOT a cost basis of anywhere remotely close to .50 or higher or even .20.
So how does JOSEPH ZAMPETTI and his CORE PIPE-holders get an avg cost basis of .05-.08 if they claimed to have “backed up the truck” and loaded up when the sp levels were astronomically higher? Only two possible answers to that: (1) They lied and never bought when they claimed to, but were simply trying to create a buying frenzy so OTHERS would buy, and/or (2) They dumped either all or most of their shares, and are lying now about having held everything.
Don’t get me wrong, there is nothing wrong with trading in and out of a position when it is clear that fairly predictable volatility is coming. And there is nothing wrong with talking your book. Heck, most of what gets touted on public forums is BS anyways. But what is very very wrong and despicable (in fact, I believe Dante has a special ring in H-E-Double-Hockey-Sticks for folks who prey on others like this) is for JOSEPH ZAMPETTI and his CORE PIPE-holders to actively lie to people and hound them to only buy/add/hold and discourage trading/selling/de-risking when they are actively violating SEC laws and failing to disclose their conflict of interest and letting their victims know that they have not only been compensated by SCRC to pump the stock but that they are also the holders of the approx 30M shares of 0.00 and 0.05 stock that is diluting into the float.
As I have stated many times, trading and being a long are NOT mutually exclusive. It is juvenile and reeks of ulterior motives to suggest that someone is not a long because they don’t “hold their shares in a vault w/o ever selling or trading”. Only someone looking for YOU to provide bid support and float lockdown would EVER suggest that. Ask any financial advisor and w/o exception they will tell you that when you play in pennyland (or with any speculative investment of any size on any exchange), the wisest approach is to periodically take profits off the table and play the natural ebbs and flows that are always more pronounced with penny stocks.
This approach enables you to have many more options available to you that all enable you to minimize risk and preserve capital: (1) You can de-risk and remove all your original capital and only ride free shares risk free, which is actually the approach I have taken with SCRC and many other penny stocks; (2) You can re-invest your profits and parlay them into even more shares; or (3) You can simply exit temporarily when bearish conditions or negative catalysts rear their ugly heads and then come back in for the same bankroll at lower prices later. Simply holding thru hell or high water is suicidal in pennyland and anyone who suggests it should be viewed with extreme skepticism as either someone with an ulterior motive or as someone who is simply clueless – in either case, they are not worth following and taking seriously.
GLTA…
So does anyone know if they are going to do any press announcing they had their first profitable qtr? It's great the Q is out but unless someone knows or was looking for it there are many, many investors out there that just don't know about SCRC.
I concur that it is nice to see a more widely known and respected Pr firm representing us.
Just another piece of the puzzle going in place.
I see one board member, Brian Anderson, selling -- and he does routinely , but i don't see other Board Members (you say ALL) selling like you say. Please let me know where you see this. I see filings saying that they received stock -- listed as an "A" transaction (ACQUIRED) not a "D" transaction (DISPOSED). Maybe I am missing it somewhere.
Thanks for the help and explanation.
LOL, yet another gem from good ol’ JOEY Z: SCRC is to be considered a bona fide investment that should not be traded.
It certainly can be if several more criteria are met, as I have outlined many times in the past. But if SCRC is, and has been, a bona fide long-term hold for the past 18 months the way JOEY Z and the CORE PIPE-holders have been touting, then riddle me this:
Why do they keep dumping all their 0.00 and 0.05 stock as soon as they come off restriction as they have been doing non-stop for just about a year now? And why do SCRC insiders, in particular ALL the members of the Board of Directors, always (and continue to) dump all the shares they receive every quarter like clockwork if the sp was expected to shoot to the moon either imminently or even in the next 6-12-18-24 months?
Hmmm, curiouser and curiouser… …I guess whatever it takes to get other gullible retail joes to provide “float lockdown” and bid support while they dump their 0.00 and 0.05 shares so that they don't have competition while they trade and flip their shares, LOL…
Transparency is so hard to be found in OTC stocks. But scrc is making it so visible
Great that you found this information.
I don't know for sure but there appears to be someone here who is touting a lot of stuff sounding like he knows what they are saying. Sounds like a short if you ask me.
Why is anyone bringing Adam Brosius into the conversation? Who is he and why is there a problem? Some seem to attack a lot of people without any proof. Now all of a sudden Adam Brosius.
What proof does anyone have about or against him? Probably none as usual.
I'm glad they announced EPS and that they have cash in the bank. I am still wondering where are the buyers? For news of a BB stock making money and just coming off of a decent Q that there would be some serious buying going on.
ScripsAmerica, Inc. (OTCBB: SCRC) today announced that it will host a conference call at 10 a.m. Eastern Time, Wednesday, December 3, 2014…
Gregory FCA
Joe Hassett, 610-228-2110
joeh@gregoryfca.com
So I see that JOSEPH ZAMPETTI is desperately still trying to convince the new sheeple that he and the CORE are heroes and saints to risk everything by purchasing 20-25M shares of .05 PIPE stock from BS Schneiderman:
One other point. Back in january when the PP started there was NO EVIDENCE THAT COMPOUNDING WAS GOING TO BE SUCCESSFUL OR NOT. It was completely UNTESTED SO ANYONE WHO PUT IN ADDITIONAL FUNDS MADE A BET ON THEIR BELIEF SYSTEM IN BOB S. Guys who put in their hard earned $ to help the company at that point deserve kudos in fact all the kudos there was no ENORMOUS #S IN JAN FEB OR MARCH. I give the core a lot of credit as I can assure you if we wrote notes we would be sitting 95% lower than today that is a fact!
DILUTION UPDATE:
The next tranches of dilutive restricted stock that is scheduled to become free-trading and dilute into the float are:
2,000,000 shares priced at .11 unlocks on 11/19/14
393,095 shares priced at .10 unlocks on 11/23/14
93,000 shares priced at .12 unlocks on 11/29/14
IMO, the .10 and .11 shares will likely get dumped once the sp hits the .14-.15 levels again…
Lo and behold, JOSEPH ZAMPETTI and his gang of fellow criminal CORE PIPE-holders are spreading even more mis-information into the public space by touting that “the water is safe, so come on in!” because there is only 8M more shares in the overhang that needs to be flushed thru.
So now let us once again wander over to the non-fiction side of the library and pull out all of SCRC’s SEC filings over the past year, shall we? As anyone can see if they take the time to tally up all the dilutive transactions, just since Q2’14 on thru today, 11/15/14, there have been approx 42M shares of restricted stock that have unlocked and diluted into the float. About half of these belong to the CORE PIPE-holders in the form of their .05 PIPE stock (again, these are just the shares that have unlocked and become free trading; there are still much more that are still on restriction).
About 75% of the remaining shares are priced at .11 or higher – and why is this significant? Because based upon the lack of volume and indicators of liquidation in the days/weeks following the unlocking of these respective shares, it became highly likely to safely conclude that these shares did not flush thru and that the owners of these shares are waiting for higher sp levels in order to break even and/or sell at more acceptable profit levels.
In addition, I would suspect that based on the volume vis-à-vis when the shares unlocked, that perhaps only half of the .05 PIPE stock has been liquidated.
Seaside also holds almost 5M shares of deeply discounted stock that is priced anywhere from .06 to .0744 to .105, and I would suspect that at least half of this has been liquidated as well.
So do the math yourself and you can see that there is much much more than 8M shares left in the overhang. And the prices of many of these shares in the low-to-mid-teens virtually guarantees that there will be heavy downward pressure on the sp if and when it runs up into the high teens and low-.20’s, as this represents the typically acceptable profit level that these financiers look for when they accept restricted stock.
And, on top of all this, there is still over 7M shares of restricted stock that is still locked up as of today, and these will continue to unlock and dilute into the float tranche by tranche between now and Q1’15.
As I’ve been saying for quite some time now, there is and has never been any rush to buy into SCRC so long as dilution reigns supreme. Once the overwhelming majority of the dilution flushes thru, then the results of company operations will begin to be more readily reflected in the sp and company success will then be more visibly reflected in the success of shareholders as well.
LOL, oh boy, so I see that good ol’ JOEY Z and his CORE PIPE-holders are once again claiming credit for saving SCRC by heroically risking all to finance SCRC with a million bucks in exchange for approx 25M shares of .05 PIPE stock.
Funny thing is that they used to tout the same mantra even here, but yet – inexplicably – none of them would ever answer this question that was posed to them repeatedly:
Please explain why SCRC offering .05 PIPE stock that is not only discounted more deeply than any convert note in the history of SCRC, but is also immediately dilutive the moment the ink is dry on the deal, is better for shareholders than if SCRC simply entered into more convert notes? After all, convert notes are cheaper and include conversion prices that are much less discounted than what was offered in the PIPE transaction. Also, convert notes do not become dilutive UNTIL SCRC fails to pay upon maturity and the noteholder converts – and with all this cash coming in from Main Ave, SCRC would have been plenty able to paydown these convert notes and PREVENT ANY DILUTION FROM HAVING OCCURRED AT ALL.
Every knowledgeable CFO knows that convert notes are toxic and deadly when a company has no meaningful revenues and cash flows; HOWEVER, every knowledgeable CFO also knows that convert notes become very attractive debt financing instruments when a company IS generating revenues and cash flows.
It is utterly laughable to hear JOEY Z continue to spout off about how he “personally knows of many investors who would have bailed SCRC if SCRC had inked even one more convert note”.
No, the PIPE deal was a sweetheart deal and part of a larger “under the table” quid pro quo between BS Schneiderman and JOSEPH ZAMPETTI et al, make no mistake about it. After all, just look back to the original pairing of this fine couple: Back in 2013, BS Schneideman hired JOSEPH ZAMPETTI to promote and pump the living daylights out of SCRC stock for approx 45 consecutive days. The going market rate for professional well-connected LEGITIMATE promoters is approx $5k/day, so for the full 45 days, this promo job should have cost SCRC (and us, as shareholders) no more than approx $250k. Now go back thru SCRC’s historical SEC filings and if you add up everything paid out to JOSEPH ZAMPETTI and his harem of CORE PIPE-holders, you will arrive at approx 6M zero-cost-basis shares that were valued and EXPENSED by SCRC at over $2.5M. That’s a hell of a hit to our earnings, folks. Now why would BS Schneiderman pay $2.5M for services from a criminal amateur when a legitimate professional would have only cost $250k??? To say there is still something unholy and unbeknownst about this relationship between JOSEPH ZAMPETTI and BS Schneiderman would be the understatement of the year.
And speaking of questions that JOSEPH ZAMPETTI and his CORE PIPE-holders dance around and refuse to answer…
Why would JOEY Z possibly not want to let folks know that he and his CORE PIPE-holders were compensated to pump SCRC and were the holders of millions of shares at the time that they were actively recruiting new buyers and encouraging existing shareholders to add more?
Why did JOEY Z and his CORE PIPE-holders all but disappear from the public space following the epic P&D last year – and only surface to begin encouraging others to buy/add (but discourage trading/selling) right when their restricted stock just so happened to unlock and become free-trading?
What possible alternative explanation could there be as to how JOEY Z and his CORE PIPE-holders could be “holding every share they own in a vault for years” – but yet, every single time that they had tranches of 0.00 and 0.05 shares unlock and become free-trading, massive liquidation would coincidentally begin appearing over the next several days that would crater the sp down each and every time?
What could have possibly been the investment thesis supporting their incessant touts encouraging anyone and everyone to “BUY NOW (OR ADD MORE IF YOU ALREADY OWN SHARES)” and “HOLD YOUR SHARES” during Q4’13 and Q1’14 when the sp was not only experiencing a bearish trend, but was in the midst of unprecedented dilution, and all the technical indicators were bearish? Could it have been that it was their own 0.00 stock that just so happened to be unlocking that was motivating them to find buyers thru hell or high water??? Hmmm…
And, quite possibly the most important question: Does JOEY Z and his CORE PIPE-holders realize that on the platform that they currently control and operate as a homebase for their pumping activities, that a new “view” is tallied each time a user comes back to the main page and so one person can rack up potentially a dozen or two views on a single visit – and that it is clear that many CORE PIPE-holders visit countless times 24/7 to stroke each other, each time racking up a dozen or so views, and so it is literally only the same dozen or two CORE PIPE-holders who are responsible for 90% of these “views”??? Too funny…
Just had a chance to glance thru the freshly minted Q…
As expected, SCRC reported net consolidated positive earnings for the first time, so this is indeed an important milestone. So far, with the negligible impact of the new insurance coverage restrictions thru the first full month of OCT, it seems likely that SCRC has turned the corner and that this profitability that we see in Q3 will not be a one-time occurrence but will be a recurring event. So this is a good thing, no question about it. That being said, if SCRC is indeed on the verge of graduating from “development stage enterprise” to full blown “operating company”, then it needs to start focusing on building shareholder value as things such as growing revenues, controlling expenses, minimizing dilution, maintaining a reasonable capital structure, and behaving reputably will be what the Street will now be looking at insofar as formulating its investment thesis for TUTs to decide whether to jump on board the SCRC bandwagon or not. And so, to that end, here are some interesting observations I noted in the Q…
Main Ave
As the crown jewel of SCRC, we of course must start with this. The Q discloses that during Q4 (which means very recently over the past 45 days), SCRC somehow acquired 100% of Main Ave. This is VERY significant, but NOT for the reason that most believe and are touting: Remember, as a VIE, SCRC was already claiming and reporting 100% of Main Ave revenues and expenses, so this new ownership interest will have ZERO IMPACT on what SCRC gets to recognize or report going forward. The important aspect of this is that if SCRC now legally owns 100% of Main Ave, then this means that SCRC no longer needs to rely on a potentially shaky and controversial claim of VIE status in order to claim all of Main Ave’s revenues. IMO, this eliminates a big part of the risk of what the upcoming year-end independent audit may have potentially raised as an issue – which, for many other microcap companies that attempted to claim VIE status on unrelated entities, many of them ended up being required by their auditors to re-state their financials and exclude the revenues associated with the VIE companies. So this is a very big millstone to have removed from around our necks, IMO.
OVERALL THOUGHTS: Excellent development.
Liquidity
For the first time, SCRC’s disclosure statement no longer states that “Mgmt believes that the Company’s cash flow from operations… …MAY NOT be sufficient to support the working capital requirements, debt service, and operating expenses…”
In the just-issued Q3’14 10Q, the disclosure now states for the first time: “Mgmt believes that the Company’s cash flow from operations… …WILL be sufficient to support the working capital requirements, debt service, and operating expenses thru September 30, 2015”
This is very good to see. Why? Because although SCRC does not address the new insurance coverage restrictions directly, they have gone on record in a SEC filing effectively stating that they do not believe that the new insurance restrictions that will completely kick in on 1/1/15 will materially impact Main Ave – otherwise, they would not be able to make the statement that they believe that cash flow from operations will be sufficient to carry them thru at least 9/30/15.
OVERALL THOUGHTS: Excellent development.
RapiMed Launch
SCRC discloses the following: “We do not anticipate launching RapiMed in the US within the next 15 months”.
This continues to be a dumpster fire. No, that is too gentle. It is a dumpter that caught fire while on a freight train that became part of a train wreck. This now means 2016 at the very earliest. SCRC had initially touted a 2013 launch with the highly touted reason being that it would take advantage of the current void in the US market caused by the competing product by J&J being taken off the shelves, and therefore gaining consumer traction and loyalty before J&J’s reformulated quick-dissolve children’s product came back onto store shelves in Q4’14 (anytime now).
But what makes this such harsh news is because RapiMed was touted as being able to bring in as much revenues as Main Ave, and so it will be a major focal point of any of the deep-pocketed TUTs who may have been intrigued by SCRC’s presentation at the recent SeeThruEquity conference. And as I mentioned in a prior post, the stale and obsolete content that SCRC lazily put together in its presentation deck will come back and bite us in the arse as many of the claims will be easily researched by the TUTs as being false. And as it pertains to RapiMeds, the claim SCRC made in the presentation was that RapiMed would launch during Q4’14 (i.e. any day now).
OVERALL THOUGHTS: Very very bad. Thank goodness we have Main Ave running on all cylinders…
Rapimed Launch in Hong Kong
SCRC discloses that as of the 11/14/14 issue date of the 10Q, it still has NOT shipped any RapiMed product related to the initial $200k purchase order that it had received from Forbes (its JV partner responsible for sales/distribution in Hong Kong). And as we know, SCRC itself PR’d early this year that it had received regulatory approval from Hong Kong already and that it was free to begin selling RapiMed in Hong Kong. So, once again, this can only mean that in spite of the claims of “hundreds” and “thousands” of retail locations and hospital/pharmacy networks, there is apparently not one single business in Hong Kong that is interested in carrying RapiMed.
This also raises the issue concerning the inventory of finished product that continues to sit. Although they have been sitting for under 1 year (but getting close to 1 year), the question that no one knows the answer to is this: What is the shelf life of RapiMed? The reason this is important because in the US, the typical practice of retailers is to only stock medicines on store shelves that are a MINIMUM of 12 months away from their expiration date. Once meds of any kind become set to expire in LESS than 12 months, the lion’s share of retailers will remove them from the shelves. So, what this means is that if the shelf life of RapiMed is something like 5 or more years from the date of manufacture, then no problem. BUT, if the shelf life is 2 years, then in 6 months, even if the product is not expired, it will be un-sellable to SCRC’s customers because THEY won’t be able to sell it to the end-consumer due to it now expiring in less than 12 months. And so if RapiMed won’t launch in the US until 2016, then if the current inventory is slated for US store shelves, then even a 3-year shelf life will render the current inventory un-sellable. But again, the key question that I don’t know the answer to is: What is the shelf life of RapiMed once it is manufactured?
OVERALL THOUGHTS: Very very bad, especially considering how SCRC, along with its paid whores, ZAMP, FITZY, and many of the other CORE PIPE-holders, kept touting how China and Hong Kong were starving for “trustworthy American products”...
Revenue Recognition
On page 8, SCRC discloses that for Main Ave, it does NOT recognize any revenues UNTIL the patient actually RECEIVES the product – not simply when it is shipped to the patient, but when the patient RECEIVES it. This occurs when Main Ave receives confirmation that the shipment has been received by the parcel courier, be it USPS/FedEx/UPS/whatever. Any Rx which has been shipped BUT which the patient has yet to confirm receipt, AND for which Main Ave may have already received payment from the insurance company is recorded as Deferred Revenue (which, BTW, is the appropriate accounting treatment under US GAAP as they have not yet “earned” the revenues).
So… ...now let’s go over to page 30, which includes a disclosure that is consistent with the disclosures that SCRC has made in prior Q’s. Here, SCRC states that it recognizes revenues for Main Ave WHEN THE Rx IS SHIPPED. This is what SCRC has always stated in the past. And this is VERY different than what they are saying above on page 8.
On SCRC’s balance sheet, we see a Deferred Revenue liability of $418,540. This means that SCRC has already received payment of this amount for product that it still owes to customers; and that, as a liability, this means that $418k of the $1.2M in cash doesn’t really belong to SCRC yet. It is not a big issue as the presumption is that all (or close to all) of the Rx’s will eventually be received, thereby releasing the liability, and that this will end up being nothing more than a timing issue.
However, the conflicting disclosures describing how SCRC recognizes revenues for a business segment that is responsible for almost 100% of its revenues reflects poorly on SCRC and will be a red flag to TUTs who are doing their DD. It really is an embarrassment, especially considering that the CFO apparently has a Corp Controller helping him, so for a sloppy SEC filing to get past both of them is quite pathetic.
OVERALL THOUGHTS: Not good, as it will give knowledgeable market participants the impression that SCRC is managed by a bunch of incompetent boobs – and since SCRC has now stepped into the spotlight via the SeeThruEquity conference, it really needs to make sure it always puts its best foot forward now. Note to Bob/Jeff -- Reminding TUTs of Gates & Ballmer: good. Reminding TUTs of Abbott & Costello: bad…
WRx
This continues to crash and burn. SCRC’s commissions revenue, which are based on gross margins, continue to freefall, this time falling an additional 50% from Q2 ($37,858 vs $74,713).
And what makes this worse is that SCRC represented to the TUTs at the SeeThruEquity conference (via the slide in the presentation deck) that WRx was expected to generate $1M for SCRC within its first 12 months. Uhhh, WRx has generated barely $200k and it has already been “live” for over 15 months now, and its business is only getting worse. The veracity of what SCRC represented to them in the presentation can and will be easily verified by the TUTs when they do their DD, so SCRC will have more egg on its face when they realize the truth re: WRx.
Fortunately, Main Ave and RapiMeds are the two big reasons to invest in SCRC, so WRx shouldn’t be a dealbreaker from a fundamental perspective; however, it will only hurt SCRC’s credibility as TUTs will now begin questioning SCRC’s other assertions/claims with more scrutiny – and, believe you me, there will be no happy ending if the TUTs dig too deeply into SCRC…
OVERALL THOUGHTS: Not good, but thank goodness it’s immaterial…
PIMD
Here we have another apparent self-contradiction within the Q. First, SCRC states the following: “Although founded approx 4 years ago, PIMD has had no sales but has the necessary licenses for operations…”. However, later on, SCRC presents unaudited financials for PIMD that reflect $65,900 in revenues w/a net loss of $28,900.
Again, similar to the revenue recognition self-contradiction discussed above, we have another example of poor QC in preparing and reviewing this SEC filing – a clear breakdown that tells the market that SCRC either has no clue how to implement SOX or they don’t give a crap about it.
Another interesting thing about PIMD that folks need to remember is that SCRC only gets a modest mgmt fee from PIMD… …HOWEVER, because (just like SCRC did with Main Ave) SCRC once again claimed PIMD to be another VIE, SCRC gets to consolidate and report 100% of PIMD revenues and expenses. Reason this is interesting is because now we need to wait for the independent auditor’s report for the 10K to verify that SCRC applied the VIE status properly to PIMD so that SCRC won’t have to pull PIMD numbers back out and re-state 2014 financials as a result. The good thing is that PIMD is so immaterial at this point in time that even if this did happen, it wouldn’t impact the financials all that much.
OVERALL THOUGHTS: Mixed. Good to see PIMD up and running, but will reserve judgment on its materiality and impact until we can see a full complete quarter’s worth of activity next quarter. Bad to see more sloppy disclosures and statements being made in a formal SEC filing… …and bad to see that PIMD is already a money losing segment…
Debt
All debt categories have decreased since 6/30/14!!! Although the amount of paydowns have been modest, the balances due is moving in the right direction – and more importantly, NO NEW DEBT HAS BEEN ENTERED INTO DURING Q3, BE IT TERM LOANS OR CONVERT NOTES!!!
OVERALL THOUGHTS: Very very excellent development!!!
A/P
General A/P and Accruals shot up 5-fold from $139k @ 6/30/14 to $714k @ 9/30/14. I could not discern any disclosures or details explaining what day-to-day expenses are sitting around unpaid and why they are not getting paid. I hope it was not part of an effort to delay paying bills until AFTER 9/30/14 just so that SCRC can show-off $1.2M worth of cash on the balance sheet.
OVERALL THOUGHTS: Worrisome, but impossible to pinpoint anything specific to be worried about due to the lack of transparency and details about what exactly comprises this liability. Could be nothing at all. But the 5-fold jump is certainly eye-opening to see…
.05 PIPE Financing
Well, BS Schneiderman just couldn’t help himself to another cash grab that involved another F-U to shareholders. More PIPE shares were apparently issued during Q3. The bright side to this train wreck, though, is that there were only three additional PIPE sales totaling approx another 1.1M shares. What was interesting was that one of these tranches was priced at .07 whereas the others were all priced at the same .05 as all the other PIPE sales from prior quarters.
OVERALL THOUGHTS: Disgusted. But I suppose I should be thankful that BS Schneiderman didn’t slither down my chimney and wisk away my firstborn child under the cover of darkness while I slept at night… …although it is a tad difficult sleeping with a knife in my back…
G&A Expenses and Share-Based Comp and Other Expenses
G&A Expenses and Other Expenses have remained steady compared to Q2, so it is good to see that these are remaining under control. And Share-Based Comp has decreased significantly from $735k in Q2 to $135k in Q3. This was expected due to the increase in cash from operations available to pay for services in cash instead of with shares of stock.
OVERALL THOUGHTS: Good to see…
Selling Expenses
Surprisingly, SCRC disclosed in the Q3 Q that sales commissions payable to the sales force for Main Ave shot up from 30-50% in Q2 to 45-65% in Q3. That is a big jump. And the numbers bear this unfortunate truth out. Q2’s selling expenses came out to 45% and Q3’s come out to 65%.
JOSEPH ZAMPETTI and his CORE PIPE-holders would like everyone to know that he and “many deep pocketed potential investors” would be fine with this expense going up to 75% and that this development (like every development, whether good or bad for SCRC) is reason to buy more shares.
Well, for the rest of us who don’t have the luxury of feeding off of the teats of SCRC with 0.00 and 0.05 stock, we should all be aware that this increase of 20% from 45% to 65% cost us approx $2.9M in earnings. Instead of $1.5M in net income for the quarter, we would have had $4.4M. This surge in selling expenses sliced off about 2/3rds of what SCRC’s net income should have otherwise been.
Oh, and just for giggles, I ran the scenarios again for the full-year assuming a $67M annual revenue run-rate and using this wonderful 75% that SCRC’s resident criminals are suggesting is bullish, and it results in SCRC losing out on an additional $20M worth of net income. That is wonderful indeed. That will do wonders for any P/E (price-earnings) ratio that the Street may want to award to our sp. No one will give SCRC a multiple based simply on topline revenues if SCRC cannot demonstrate an ability to generate acceptable profits from these revenues. That is why Price-Earnings multiples (not Price-Revenues) are the prevalent metrics on the Street.
OVERALL THOUGHTS: Very very bad.
Cash Flow
For the first time, SCRC is reporting positive cash flow for the period. BUT, what is most important about this is not the overall cash flow; rather, it is that the “Cash Flow from Operations” segment is providing positive cash flow. Any company can generate positive overall cash flow by doing capital raise after capital raise (which would show up in the “Cash Flow from Financing Activities” segment), so it is good to see that SCRC’s operations is finally self-sufficient cash-wise.
OVERALL THOUGHTS: Excellent development.
Dilution
3.57M additional shares were issued during Q3. 1.1M of these were the PIPE shares that were discussed above. 1.6M shares were for a “consultant” (LOL, hmmm…). The rest were for a variety of other services.
From a price perspective, of these 3.57M shares issued, 1.1M were PIPE shares priced mainly at .05 (with a tranche priced at .07). 400k were priced at .09. 69k were priced at .10. 20k were priced at .13. 1.5M were priced at .14. And 447k were priced at .15. So almost half were given out to folks who have effectively cut in front of us in line.
In addition, SCRC discloses that approx 440k shares have already been issued during the first half of Q4’14. This is also much less than what has historically been issued during the first half of prior quarters in the Subsequent Events section of the Q. So Q4 is starting off on a decent note as well in this regard.
OVERALL THOUGHTS: Mixed, but a bit more good than bad. Surely, it is not good to see more PIPE shares issued, but compared to prior quarters, it was much less. And the overall share issuance of 3.57M is much less than what we have historically seen w/SCRC (20M shares issued in Q4’14, 32M shares issued in Q1’14, 9M shares issued in Q2’14, and now 3.6M shares issued in Q3’14).
Earnings Per Share
Folks should be aware that up to this point in time, because SCRC was always operating at a loss, common stock equivalents were never included in any EPS calcs. However, now that SCRC is generating profits, folks need to begin including these common stock equivalents in computing a fully-diluted EPS. These are comprised of warrants, options, convert notes, and convertible preferred stock. Per SCRC’s disclosures in the Q, these common stock equivalents total almost an additional 25.5M shares of common stock on top of the published O/S count.
OVERALL THOUGHTS: None. It is what it is. I just thought that this may be something that retail investors may want to become aware of, since heaven knows that JOSEPH ZAMPETTI and the other criminal CORE PIPE-holders would never mention it, LOL...
Reason why I asked you how do you know SeeThruEquity.
Because I know the organization very well. They provide the bridge between microcaps and institutional investors.
90% who attend SeethruEquity conferences are private equity firms, ventures, family offices, "real" research analysis, B/D, hedge funds and high networth Investors. And these companies who present are filtered prior. Most are quality companies, however, its up the institution to determine overall if this is an investment opportunity, regardless what SeeThruEquity writes in their research report.
If an institution has an interest, they provide them a term sheet and do a through due diligence process before a penny is ever given to the company.
Yes, the presenting company has to pay to present - its not free. Venue itself is a cost and SeethruEquity charges to provide the needed service to these companies.
I do like Scrips, saw there presentation I just need to do further DD on them.
"New To The Street" Is Back on the Street, Go SCRC!!
Did anyone notice the name ADAM BROSIUS in the presentation deck as being one of the members of SCRC's "leadership team"?
Those familiar with pennyland should recognize this name. If not, then how about BLACK CAT CONSULTING, the firm Adam owns?
Adam's reputation is not too dis-similar from that of JOSEPH ZAMPETTI. In fact, Black Cat Consulting was one of the named promoters along with JOSEPH ZAMPETTI that SCRC disclosed in its SEC filings as having been compensated with 0.00 cost basis stock in exchange for providing "investor relations-related consulting services" during the epic P&D last year.
I guess it's true what they say about birds of a feather flocking together... ...this should REALLY give market participants the warm fuzzies about what BS Schneiderman's true intentions are...
Questions concerning SCRC:
[Q:]
Will SeeThruEquity issue an analyst report to initiate coverage on SCRC that will contain a quote from a SeeThruEquity exec to provide the appearance of legitimacy and independence as well as provide a liberal price target of many hundreds of percents higher than where the sp currently stands?
[A:]
It “depends”.
[Q:]
Will the market know that SeeThruEquity will likely have been compensated by SCRC to issue such as “analyst report”?
[A:]
It “depends”.
[Q:]
Will SeeThruEquity be able to generate any meaningful buyers from their conference?
[A:]
It “depends”.
[Q:]
Will the upcoming 10Q disclose that BS Schneiderman has stopped stabbing shareholders in the back via continued issuances of deeply discounted PIPE stock?
[A:]
It “depends”.
[Q:]
Will the upcoming 10Q disclose that SCRC has finally delivered its inventory of RapiMeds product? Or has Forbes still not yet found any interested buyers in Hong Kong (the Beverly Hills of China) and so we are still stuck with the original inventory from the one and only Purchase Order from long ago?
[A:]
It “depends”.
[Q:]
Will Main Ave continue to show growth in JAN-2015 when the final block of large employers transition to the new insurance restrictions re: coverage for compounded Rx’s?
[A:]
It “depends”.
[Q:]
Will BS Schneiderman ever climb out of bed w/known criminals such as JOSEPH ZAMPETTI and his harem of fellow CORE PIPE-holders?
[A:]
It “depends”. But likely “no”.
[Q:]
Will JOSEPH ZAMPETTI and the other CORE PIPE-holders ever realize that if they truly care about SCRC, that they will just shut the f-up and climb into the same cave that SEAN FITZGIBBONS is now hiding in, because their pumps and touts are so juvenile and cheesy (not to mention obvious) that they only serve to cause legitimate potential investors to have pause when they see the types of games being not only played but sanctioned by the CEO himself?
[A:]
It “depends”. But likely “no”.
[Q:]
Will JOSEPH ZAMPETTI and many of his fellow CORE PIPE-holders ever offer up an explanation as to why they decided to violate SEC laws and not disclose their compensation from SCRC for providing promotional services, and to let retail investors know that the stock they were encouraging others to buy was their own free stock (and now additional .05 PIPE stock) that they were looking to dump?
[A:]
It “depends”. But likely “no”.
[Q:]
Will the SEC ever climb out of its backlog and determine that the magnitude and/or nature of the crime that was committed by JOSEPH ZAMPETTI and many of his CORE PIPE-holders w/SCRC is worth pursuing?
[A:]
It “depends”.
[Q:]
Will JOSEPH ZAMPETTI, SEAN FITZGIBBONS, and the other CORE PIPE-holders who received free shares for promoting SCRC stock have to spend the rest of their lives looking over their shoulder since – although there is a statute of limitation on the criminal prosecution of SEC violators – there is NO statute of limitations on conducting an investigation and forcing violators to disgorge profits?
[A:]
It “depends”. One can hope this will be the case…
[Q:]
Will JOSEPH ZAMPETTI and SEAN FITZGIBBONS eventually trade cigarettes instead of stocks as a result of their crimes against SCRC’s shareholders?
[A:]
It “depends”. Again, one can hope…
[Q:]
Should they be prosecuted, will JOSEPH ZAMPETTI and SEAN FITZGIBBONS be able to amicably decide on who gets to be the groom and who gets to be the bride?
[A:]
This one is tricky. It may ride on which professional sports team wins that day – either the Celtics or the Blackhawks. Truly a toss up. The only appropriate answer is: “Ultra Depends”…
The more I look over the investor presentation deck, the more red flags it raises.
First off, this was a very unprofessional looking presentation. Serious companies will not hesitate to spend $10k or so on an IR firm to create something professional, both the look of it as well as the content. This looks like a PowerPoint 101 class project by interns. We know BS Schneiderman loves spending shareholder money on stock promotion -- heck, he has spent countless millions just on JOSEPH ZAMPETTI and the CORE PIPE-holders for "investor relations-related consulting services" already, so a measly $10k or so should have been nothing more than a drop in the bucket -- not to mention a worthwhile investment...
Second, look at the following blurb re: RapiMeds:
ScripsAmerica’s initial focus will be on a Pediatric analgesic 80mg and 160mg orally disintegrating rapid
dissolve tablets, which are currently under development with a market rollout scheduled for 2014.
Estimate $1M in sales the first 12 months
I don't know how much it would have helped releasing it yesterday morning but I tend to agree that it should've been done.
How do you know about SeeThruEquity?