OK, let's follow up the analysis of worst case for dilution by Ray (O/S doubling) with an analysis of how obtainable certain sales figures are.

Right now, sales were reported at $5.6 M in the quarter ending March (mostly to distributors), and for the quarter just ended, hints are that it's up quite a bit, perhaps to the $7 to 8 M range.

Is the increase reasonable? Yes, when you consider that:
1) It's a full quarter of sellling online
2) They introduced HealthEnrich, which sold well.

I believe the international distribution and sales picked up in that quarter, as well.

Now, since much of the sales were to distributors, and most of that hasn't made it to store shelves yet, we certainly haven't seen end-user sales at that level yet. When shelves are stocked, can they sustain $7.5 M per quarter in sales, for $30 M / year revenues?

Let's break it down.
With 91 days per quarter, that's just under $82,500 per day.

Let's assume Snorenz is the big seller (it has a long history and good name recognition already), with StemIntense and HealthEnrich lagging, but gaining over time. The breakdown might look like this:

Snorenz: $45,500 / day
StemIntense: $20,000 / day
HealthEnrich: $17,000 / day

Now, I chose those numbers a little bit so the math would come out easy, but I imagine they could be close to the right proportions once product is on shelves. Snorenz is $10 a bottle, StemIntense is $20 a bottle, and HealthEnrich is $17.

This works out to 4550 units of Snorenz and 1000 units each of the other 2 per day.
How much is that per state? (assuming no foreign sales!)

91 bottles of Snorenz and 20 bottles each of the other 2, per state, per day. Obviously, the biggest states (California, NY, Texas, Florida, Illinois, etc.) would have to sell 3 to 6 times that to make up for the smaller ones.

So, do these numbers seem possible and even likely? I say yes, if they get into the shelves of half of the big chains, and you throw in internet orders, it's very attainable. Add in international sales and it becomes even easier.

Hey, if Walgreens.com can list this copycat product
with bad reviews and twice the cost on their website, then we can certainly get good sales of the original, proven, product (with good reviews) in stores and online.

So to me, $30M / year is an easy target to hit, and should only grow as the newer products get wider credibility, recognition and distribution, and international shipments pick up. I haven't even mentioned the value of the lactose intolerance patent.

As mentioned before, with a Price/Sales of 1, this would justify a PPS of at least 4 cents, or at least 2 cents in even the worst-case Ray fully diluting scenario, for at least an 8 to 16 fold increase from current prices.

Even if you're a cynic, and you believe there's a 50% chance that the O/S will double to the worst case 1.5B, for current prices to be justified, they'd have to be selling < 10 bottles of Snorenz and only 2 bottles of the other 2 products, per state, per day, with no international sales, and no long-term growth in sales. I just don't believe, given all the Snorenz copycats out there on shelves worldwide, that their max potential is so incredibly low.

The much more likely scenario is that they've been telling us the truth, and are just very aggressive and talkative, making all our timeline expectations too hopeful, making the delays in "proof" & "legitimacy" milestones seem frustratingly bad, while the revenue keeps right on rolling in. So to me, the probability of a huge increase in share price is much greater than the probability of a huge drop in share price from these levels.

Hmm, this board has 434 followers, and @Medgeninc on Twitter has 3393 followers, so I can imagine that after releasing that "cover all bases" update, they could get over 500 emails per day.

It shows that there are a lot of eyes on this with a lot of interest in it.

Well, perhaps a voice of reason, but definitely a voice of humor, which is welcome.

OK, you've put enough out there to put some fear in people, and I'm certainly at least asking myself some questions. So let's see how bad this really could be.

IF you assume that Ray is lying when he said he only has those shares as an insurance policy to ensure he gets his loan back, and you believe that he WILL convert everything he can, what would happen? Firstly, it would only be half the shares that you stated:

Reading the latest reports, you see that the conversion price would be .0001, not the earlier .00005. So, that could lead to as many as 780M new shares. Right now there are 732M shares. So that would bring the total to just over 1.5 billion shares (or just under 1.5B after current bought back shares are retired) which is right at the authorized share total.

In other words, it could double the number of shares.

So, if that's the one thing wrong, and you believe in the potential of their products and the lactose patent deal, and that revenues should be at least 30M for the year (a reasonably conservative projection), then the company would have 2 cents of revenue per share, even if fully diluted to 1.5B shares.

With a P/S of 1 (a very conservative value), that would justify a share price of at least 2 cents, so you're still looking at an 8-fold increase from current levels.

So, we're back to just worrying about whether the products are legit (we have plenty of confirmation that they are) and are selling well (we need some more confirmation of that, but might soon get it).

Could this be the "almost identical" product which Nick was talking about?
I checked the shelf of my local CVS and found it there, then searched online and found it at drugstore.com, too.

http://www.drugstore.com/snorestop-extinquisher-homeopathic-anti-snoring-oral-spray/qxp70234?catid=183130

It has different ingredients, but the same "spray" idea.

Thanks for sending those snapshots. I see where you see that now.

It reminds me of my last job, where I often created MS documents from a template with the company's standard formatting. It always showed the creator of the template as the author of the document, even though I was the one who wrote it all.

Could that be what's going on here?

You said about Ray:

Care to tell us how you know this? Some people around here are sticklers for confirmation, you know.



I've looked at the letters and don't see his name. Where do you see it?

That exact paragraph from the reports was discussed at length months ago. Emails were exchanged with Ray and Nick about it, and posted. Obviously if they're scamming, they'll say whatever they have to say, but in my judgement, their explanation made sense.

There are some restrictive terms on those notes. Go back and find the old posts to get the full story.

Welcome, all the newcomers since yesterday. Not sure why the sudden influx of newcomers but I hope you can join us in making a lot of money by going long. There's lots of good DD that's been posted here over the last several months.

...and all good legit businesses need real bait. The question is how to tell the difference.

Brian, I'm dizzy trying to make sense of your post. A little punctuation would help, to tell us where the sentences end.

Exactly. Hmm. That's 9 dollars and 50 cents worth. The commission must have pushed the real per share cost into to .0030's, so, effectively, nobody bought in the teens!

Because of past experience with stores pulling product after being inundated with calls to verify that they had it.

He probably feels confident enough in his foothold now that he can risk a store or two getting angry with him, and desperate enough with the stock price situation that he's willing to take that risk now more than in the past.

I have not yet had time to watch and read those links, but I will. I appreciate you sending them.

Forgive me for assuming that the passage you posted was the one upon which you had based your conclusions.

Thanks for that link. That is good news for honest people.

"primary" is not the same as "exclusive", yet it seems you interpret her statement to mean "exclusive".

Can you provide a link to this SEC Roundtable video? I like to check things out firsthand and form my own opinion.

Does it clarify whether the policy of not meeting with issuers is about any topic, or just about whether the chill should be lifted? In Nick's case he was inquiring about timelines, not the interpretation of his paperwork, so perhaps that policy doesn't apply to this case.

I agree with you that I think Nick thought the update would be interpreted as positive.

I think what he's learning is similar to what every politician learns at some point: If you make statements about things where you can't give verfiable specifics to back them up yet, so you have to be vague, your opponents will jump on the chance to spin it in their favor.

I think he'll soon learn that it's better to talk less, be patient, set unrealistically long timelines to make it easier to meet or beat them, and report on your successes only when they've happened, not in advance when they're still uncertain.

Yes, you're right, it's good to have healthy skepticism. What do you know for sure, and what do you not know? I constantly ask myself what I really know for sure here. I did order some product to see if it is real and will help. So I know that StemIntense is real, and seems to work, and a lot of others here that I trust are real people have said the same.

There is plenty of historical evidence that Snorenz is real and was wildly popular worldwide fro 2005 through 2008 before they stopped making it. Look at all the copycat products worldwide, some of which even tried to steal the Snorenz name. I'm asking some friends with snoring problems to try it so I see firsthand.

So, I'm not buying the idea that this is all a scam. 

You can interpret delays 2 ways:
1) either it's a legit business that hasn't yet learned to keep quiet about timelines, or leave a lot of buffer room in expectations of timelines, so that when inevitable unexpected business delays happen, most outsiders won't even know there's a problem and they still meet the time expectations, or
2) it's not a legit business, and they're just trying to string people along as long as possible.

Which is more likely? If it were the 2nd case, why would there be such frequent communication from NIck, with such specific hope for aggressive timelines? It just doesn't make sense that that's what someone would do if they were trying to cover up something that isn't legit for as long as possible.

Nick's flaw is that he's so eager and impatient for success, that as a communicative kind of guy he just can't keep things patiently to himself. In the long run it's a good thing to have a CEO who's impatient for success and a great communicator, but in the short term it's hurting because he can't keep himself from dropping hints as to what he thinks is about to be great success.

I've been in software development, and I've learned that there are almost always unexpected delays and barriers, so you have to raise your estimates from the start to account for that. I think Nick's learning that the hard way now.

My interpretation of yesterday's update is that it's the sign of an eager CEO who's desperate to get good news to people, before he's allowed to give specifics. So, he tells us as much as he can, without specifics, rather than having to wait a long time without telling anything at all (as he probably should).

Unfortunately, for the short-term at least, lack of specifics makes it easy for some to let their imaginations fill in the gaps with worst case scenarios.

Everyone must use their own judgement while reading between the lines, but I believe Nick's update is believable. 

Yes, that's correct, or to put it another way, the chill is meaningless when they uplist, because it just can't exist for companies that are up at that level.

Actually, I'm really confident and excited, not mad, that the price is holding strong in its channel, despite the increase in gloom and doom chatter since yesterday's update.

I think it's a good sign for the future that the price is only slightly down and has held a strong base through this.

That gave me a nice chuckle. Things are getting entertaining around here.

Gee, look at all the panic selling (spoken in bored, sarcastic tone) in the last hour and a half. All of $3000 worth sold. Price not budging. Not even a new low for the last week.

Ho hum.

Yes, it makes sense, because MDIN has the patent, so they're in the position of strength.

Why do people continue to insist that there was ever a timeline or deadline or promise for the chill to come off by a certain date? Everyone knows that it was never under Nick's control, so he was only speculating and hoping out loud. The only part you can complain about is that he thought "out loud" about when it might happen.

Dangus, this is an excellent summary.

Anyone doing good DD will see that the bit about a similar product on the shelves is completely likely. To me, that part of the update is completely believable. After all, look at what happened with foreign distribution.

In 2005 and 2007, Med Gen was on a roll, with Snorenz becoming a huge worldwide hit:
In New Zealand: http://www.businesswire.com/news/home/20061115005179/en/Med-Gens-Snorenz-Hit-Zealand
In Australia:
http://www.businesswire.com/news/home/20051128005701/en/Australian-Distributor-Promote-Med-Gens-Patented-Snoring
In Asia:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agRBpV.jPRiU

Then after the 2008 market downturn and some bad moves, they had no money to continue operations, and shut down, but of course, they had a loyal following of customers who wanted Snorenz!

This inspired knock-offs to be created to fill the void, such as "Silence" as shown here in Australia: http://www.chemistwarehouse.com.au/product.asp?id=55705&pname=Silence+Anti-Snoring+Spray+50ml

or "Quies" in Europe: http://www.amazon.com/Quies-the-Anti-snoring-Spray-70ml/dp/B005GKXN9Y

or "Snoreeze" in Europe, originally a blatant copy called "Snorenz" before being forced to change its name. Just go to http://www.snorenze.co.uk and see it switch over to www.snoreeze.com.

All this is proof that there's demand for this very popular product, a demand that never went away!

Of course, in the US, it's not surprising that there was a knock-off created to fill the void, but in the US, Med Gen is going to have patent protection more strongly on their side, so everything Nick said today is completely believable and even likely. The knock-off would rather cut a deal than go through litigation and/or pay a fine and go out of business. Med Gen needs the distribution capacity and retail relationships. A deal is a creative solution which greatly benefits both parties.

He did state that the 6 cents was just a random number.

I think he wants to hold out for at least 10 cents, and I think he can get it.

All he has to do is wait for results to come in, and the stock price to go up, and the bidding wars to go on long enough.

I certainly would like any buyout to happen next summer if possible, so if there's forced liquidation, my gains will be long-term (lower tax rate) instead of short-term. Anybody know how that works?

Those tweets were pretty good. Interesting that you see them as misleading. The only ones which were perhaps too specific and optimistic were the projections of 7 million units, and later 17 million units, and those may have been reasonable projections at the time, and might still turn out to be not far off.

They were also described as projections, nothing more.

I've seen penny stock CEOs of other companies make even more overly-optimistic projections, and fail to meet those projections despite great growth, without a hint of an SEC investigation. Intentional deception might be a crime, but optimism is not.

He's probably got deals with a lot more than 4 of the chains mentioned in the Pro-Forma. Are all of the ones you mentioned in the top 12 retailers? Probably most are, but the number 4 was discussing only the top 12.

Also, was the Pro-Forma talking about signed deals, or only deals under negotiation, or verbal offer? His statement today was about signed deals. Signed, done, definite. Were there any SIGNED deals at the time of his first Pro-Forma?

In other words, the devil's in the details. This could either be a sign of forward progress or backwards progress, depending on the state of the deals at the two times.

Perhaps he just hasn't reached the SIGNING stage with the other 8.
Could he still be in negotiations for deals with the other 8 of the top 12?

Where did you get this idea?

Read the email from Nick more carefully. They GOT THE CASH. The product was shipped to distributors. Product out the door. Cash in the door. That's real revenue!

The only reason they legally have to call it "deferred" is that it could be returned, and they'd have to refund money for any returns. The actual amount returned will be a small percentage, probably < 5%.

So how can you say it never occurred?

I'm quickly catching up on a week's worth of postings after a week "cut off from the world" in Yellowstone with family, bison and geysers.

I see that nobody answered this question:

The answer is that they update once a day, and it's at unpredictable times.
Generally, it seems to be about midday, perhaps 1pm to 3pm Eastern time, but sometimes it's not until Midnight.

When they DO update, it's for the day 2 or 3 days before, so now on July 8th it's showing data for the end of July 5th. You can find out what date it's for by looking at the chart for "Daily Global Rank Trend", which in Alexa's new layout [they switched it up on me while I was away ] is under the section "What are this site's historical traffic trends?".

The last date shown on that chart is the date the data are for.

Anyone see this yet?

http://www.rxzone.us/product.cfm/rx/medicine/cough--coldnbsp//Snorenz-Spray-Dispenser-2-Oz-60-ml-705988.html

You really think the tweets are the primary driving force behind the PPS staying low? I think a lot of us can think of a lot of more likely reasons. Of course, we've already discussed them a lot, so I won't go over it again.

I agree with everything you say. That's why, when I hear Nick and Ray saying the quarter will beat the previous quarter, I expect it will be only by a small amount, meaning a total of about 7 million, and that much of that will come from Europe. Increased internet sales will help a bit, too, to make up for reduced domestic retail store orders.

Anyone reading posts like this, and thinking there might be billions of shares out there, should do their DD by reading the quarterly reports.

To save you time, here's the relevant paragraph from the March 31st report:

Just after that it explains all the actions which changed the SS up until the March 31 filing date, which left us at 402M shares outstanding and 239 M in the float.

In early June, Nick issued this letter describing all the changes since the quarterly report:
http://medgeninc.com/66138.pdf

So, THAT'S THE ENTIRE HISTORY of how you get from billions of shares out there to today's share structure. The "billions of shares" issued were condensed by a 1:30 reverse split down to under 400M shares, and now we're at about double that mostly due to the lactose intolerance patent license deal. So, NO, those billions of shares are not still out there. They were "condensed" 3 years ago. They are NOT hiding out there and being secretly dumped on the market.

Maybe they interpreted the instructions differently, such as thinking some info was optional?
Maybe there was miscommunication?

Whatever, I'm not too worried. Perhaps someone made a mistake, but I don't think it implies bad things about the company's prospects long-term.

Either way, being current should mean more $$ for us, or in other words:

"Currency means currency"!

Just some humor to pass the time until we're current!

Thanks for doing the DD, Fill!

stockhero, I don't know if I'd say that so definitively. I'd say we have a good chance to be current this week, and an excellent chance by next week.

Think about it, they got the email yesterday. Maybe they don't respond until today. Maybe the OTC checks it on Friday and finds one more thing to ask about, and one more round trip of communication puts us into the middle of next week. It's possible.

Thanks for the info, Chugit.

So, it seems there is a copycat in Europe, which I suppose is both a good and bad thing. Bad because it eats into our potential revenues, but good in that it lends us legitimacy. Perhaps when MDIN stopped production here for a couple years, somebody jumped in to fill the void over there, since the product was popular?

So the battle over the name would mean that we're selling under the name "Snorenz" even over in Europe, right?

I'll agree with you on that.

I don't think he has intended to mislead, but he has. I think he's still learning some things about PR. All that will come with more experience.

I'm trying to verify, or at least get some sense of European sales right now.

One thing I've found is a "Snoreeze" product line which looks like a repackaged Snorenz, but I haven't yet got confirmation that it's the same thing.

Here's the REAL pattern:

In January, it traded mostly in the .002s, with dips to .0016.
In February, it traded mostly in the .002s, with dips to .0013.

For the last month, it has traded mostly in the upper .002s, with dips to .0022/.0023.

So the base is getting higher and more solid.
A more solid base means a higher liftoff.