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Well pharma, I'm happy to be educated. Of course...
I believe I pointed out that the majority, $24M in fact of AR's are non-current. Due to the nature of their business, that number is an estimate. Non-current means the collection timetable is greater than 12 months outs.
My point with regard to assets is that, while assets have increased, the majority of these assets are in the form of long-term, liquid assets which affect cash flow, and short-term planning. Secondly, there is still no CAPEX.
When you speak of assets, you need to compare short-term to short-term. Current to current. That comparison will lead you to what I am seeing, which is $12M in current assets, against $29M in current liabilities. There is the stark truth. Current liabilities (in the next 12 months) are more than twice that of anticipated earnings. And this growing divergence has also become a trend.
At some point, this bubble will burst if this trend continues.
Renegotiating with NHS will reduce this by 10%-20% maybe... PXYN will need to either finance the rest coming due, or issue shares to cover. If they can't do either, I expect they will file for C11.
There's some good in the Q, but I think PXYN needed to hit this one out of the ballpark and in that regard, they failed. Most of their assets are tied up in receivables, the bulk of which are long-term (12 months or more). There's $24M sitting there in non-current AR's. What does that even mean these days? Who knows what the realized gain will be -we know it won't be anytime soon. Need I say that PXYN has no capital assets...
I actually cringed when I saw liabilities. Granted, PXYN may be able to negotiate a lower marketing fee; and therefore reduce the $13M in accrued marketing they're probably required to report -but they're not receiving much from the NHS pre-approved income anymore, anyway, so it's all a bit meaningless right now.
Based on the numbers, it appears PXYN may be falling back on their traditional WC channel to keep things afloat, but we all know this is a flawed business model, the snake eating it's tail scenario. WC is a supplemental revenue stream at best; a stopgap when required, but not something to base a business on -perhaps NexGen can save them here.
And layoffs are layoffs guys.
Sometimes I question whether PXYN (Ed Kurtz) actually reviews the notes that get annotated in the Q's. There are no Earnings Calls and so these reports are the only facts we get to craft forward guidance -a crude effort at best.
Unless PXYN knocks something out of the park soon, I see us trading at .002 before the K is reported next April. Concerns of the company filing Chapter 11 need to be considered now. They've stated their pre-approved billings are essentially on hold until further notice. Yes, not-in-line:
PXYN reported $5.3M in pre-approved, gross revenue ending Sep 2015, $3.5M in pre-approved AR's, and $1.5M in pre-approved marketing fees. Based on this data, we can see that the pre-approved revenue channel is really, quite insignificant for the totality of 2015.
This rest is non pre-approved business; I assume WC from Products for Doctors. PfD does seem to be spinning up in the way that everyone had hoped NHS would and this is likely why the business remains afloat. As long as they PXYN can leverage NexGen they can probably make money, but we're now circling back to our original concerns 6 months after the merger, on whether the WC model is viable (sustainable) by itself -IMO still no.
Why discuss a Chapter 11 then? It's because we're back to a 1 revenue channel business. If that evaporates the way TPS, and apparently NHS is doing, PXYN falls apart. PXYN is in a much less favorable position now with the share structure, unfavorable liabilities, a working capital deficit that's growing exponentially, the TPS lawsuit, and failing NHS contract.
PXYN has circled back to the beginning, but with way more baggage this time around.
2. Legitimate company? Yes, that also looks about so.
How can they both be true?
This wouldn't be a scheme, if not for the transfer of wealth that's been engineered by the CEO. We see it all the time in penny stocks, but 99% of those companies are unprofitable. The difference between those companies and PXYN is that PXYN has achieved margin; yet has still elected to cash in their common shareholders in lieu of arranging the equitable distribution of profit. An ethical company would have ensured the integrity of common, the payback of preferred (initial investors) through profit (arranged buybacks); and through those two means, the healthy value generation of stock.
Instead, PXYN has elected through use of crudeness, to cash in their common shareholders to payback preferreds. It's a violation of trust on both sides. I would speculate that they had no intention of returning value through profit from the beginning. This is a crude, 1980's business mentality, that centers on archaic profit maximization models for the enrichment of a few.
And don't be fooled gang. This hurts everyone, the common and preferred alike.
PXYN isn't a scam. They're just a greedy company operating without a moral compass. Unethical is the word everyone should be using.
We will continue to seek lower lows irregardless of fundamentals because this is the value model that's been put in place. Preferreds have been given no choice. They must exit and drive the price lower while doing so. This is the only option they've been given and PXYN is on record that they will not buy back common stock to support the price.
I give them some respect for addressing the share structure issue with candid analysis; i agree with you that they state no new information.
My takeaway from whoever wrote the article is that they are attempting to sell a story.
1. They urge PXYN to negotiate a mass conversion. I actually like this strategy; I've seen it work just recently with a big board company -my only issue with this now is that a.) we trade on the OTC and b.) PXYN isn't buying back shares. Which means we're more likely to R/S sooner rather than later. If the goal is to unlock the value in common, I suppose that's one way to get there. While I no longer expect PXYN to perform a buyback (I now also believe they intend to R/S at some point down the road), I do see that common has many, many months ahead of them before such an R/S can take place, likely another 24 months at least. My concern is that any such negotiated conversion would not be reported, as is typical of the OTC, until the conversion ends (and in PXYN's case, perhaps not at all). As it stands now, there are still opportunities to unlock value in common as we trade lower. A mass conversion IMO would only serve to flood the market and accelerate us to market bottom (.0001).
Praxsyn is a growth company and while the preferred shares will convert into a considerable amount of common stock, those who purchased the preferred have incurred significant risk in doing so, and thus deserve a handsome reward if the company should work.
2. I got the feeling Preferred holders are behind this article. I'm not sure what it is, perhaps the tone; perhaps the mention of Preferreds in the quote above? Heh. But it seemed to me an article designed to sell common shareholders on the idea that we shouldn't be scared of conversion pressure. As many of you know, persistent dilution in the OTC is typically the death knell of a ticker. Preferreds of course will need someone to buy those conversions. At any rate, fundamentals will remain irrelevant, at least until conversions are complete.
This seems to be an attempt to positively spin the conversion pressure we've been witness to lately.
The one saving grace with regard to this article is the mention of NexGen's collections efforts. I remain bullish on this channel. I've seen collection companies grow exponentially, in very short order and I've stated numerous times, NexGen is the key. Time will prove me right.
Not really. It's deficient in critical analysis; mainly subjective opinion written in narrative fashion without facts to support conjecture.
They use the phrase, we believe, frequently, and follow the usage with opinion. When they do throw out numbers, they're conclusions on profit and revenue are incorrect. They quote numbers directly out of the Quarterly reports, without dissecting and computating their assumptions to support their assertions.
There's also a lot of spelling and grammatical mistakes, which someone else pointed out.
This is obviously a hack job put together for an ulterior purpose.
I would give credit due, if I could. This article is something you would see written here on ihub, or a penny blog. Not a credible source of review from an esteemed, established firm.
Site is United States based, But The Real Location Is Being Hidden
Last refreshed November 7, 2015, 3:26 pm Number times viewed :4
Website: globesmallcap.com Title: Globe Small Cap
Domain Age: 195 Days Website Speed: Average Website Value: $359.67
Owner: DOMAIN PRIVACY SERVICE FBO REGISTRANT Owner Address: 1958 SOUTH 950 EAST Owner City: PROVO Owner Postcode: 84606 Phone Number: +1.8017659400 Phone Type: geographic :Provo, UT Qwest Corporation Email:
Owner Country : Hidden Website Location : United States
Notes:- Alert Result: The owner of the website is using a service to hide their identity Alert Result: This website is 195 Days old Alert Result: The website expected life (365 days) is relatively short.
Someone left a comment on the bottom which reads such:
Beware!!!!!
This operation is being run by convicted felons who extort public companies into paying for their services. If a company declines their service they immediate write a barrage of negative articles and blogs in an attempt to suppress the share price and scare potential investors away. One individual is a fugitive living in Israel.
As an added note, my firewall at work refuses to pass the website through. No warning, just immediate censorship; usually a good indication of something nefarious.
PXYN's been so beaten down the past year that bulls can't believe a rally when they see one. Everyone's waiting in breathless anticipation for the bottom to collapse.
The share structure is out of control at this point; is the primary inhibitor of growth IMO, and it appears Ed has no intentions of implementing any sort of corrections to reign this in.
He's allowed bears to set the narrative, expends no effort to combat such narrative, and continues to assert (via his IR) that fundamentals will steer the PPS into corrective territory.
Almost 2 years of failure doesn't appear to impress upon him the failed state of such strategy. It appears that he'd rather set his house on fire and repeat the definition of crazy, than come around and adhere to common sense.
Even his preferreds are exiting en masse, likely writing off losses for tax season. Ed has a fiduciary commitment to return cash to his initial investors and can't even seem to do that.
I continue to assert that Ed makes a decent Operational manager, and is a complete failure as a public CEO.
well, should be pretty volatile up to Q3. all bets are off after the report. It's a 5 month winter and without fundamental support from the company in the form of price support or progress, I see this trading down to .002 by the new year.
would seem to be the case. We've treated the preferreds like the boogyman lately but honestly they're probably just trying to remunerate what they can get from their initial investment; from a grossly mishandled public execution.
I think it's Lose/Lose for everyone here and the CEO stubbornly refuses to admit he's at fault.
Pshhh. Ed has no integrity. He's butchered his common, thrown us to the wolves. We're on our own guys. Trade this smart. There is no long-term play anymore on PXYN.
A fellow PXYN holder Emailed the IR. I'm posting with his permission:
Repeatedly we've asked for conference calls, TA transparency, address the bloated share structure problem, outline steps to support the share price, shareholder letters, address the issues ...
and PXYNs direct response:
The questions that you ask me to answer are inappropriate and, like I said before, we do not respond to commands nor blank accusations from ihub.
This is how they treat the gentlemen whose been invested, long and publically supportive of their company for nearly 2 years.
Well, I think it's obvious by now if you have access to short shares, that's the way to go. I don't personally short the stock and never have, but I don't judge short sellers either. It has it's purpose.
I've personally been optimistic in my hopes, because the company generates decent revenue. There's really no reason to cash in the common shareholder, when sound fiscal discipline can pay back the initial investment group, and preserve the share structure.
What's happened this week was that they decided to access our wealth anyway, for that purpose.
The IR will not tell you how many shares are in circulation. The O/S has been essentially gagged since they switched to Broadridge, even though the company denies it.
There's a Fiduciary Commitment that's anticipated, and hasn't been resolved. Ed's obviously the front man for the initial investment Group that went in on this effort.
I don't know what the original commitment was from the initial group, but that should have been returned via gross profit. Instead, Ed Kurtz has returned their money by accessing the wealth of common shareholders.
You're exactly right when you say this is a transfer of wealth (and I use the term wealth loosely).
Ed has paid back that commitment for free, essentially without penalty by sacrificing "us", the common shareholder, instead of doing what's right.
We see this all the time on the OTC.
What's different, and so brutally deplorable in this case, is that PXYN actually generates decent topline revenue, and looks to be set to generate profit. They are capable of paying back that commitment through fiscally sound and fair discipline.
But they've chosen to cash in the common shareholder anyway.
That's not just dirty, like most OTC companies are.
Well I think Ed's sealed his fate with this move. He can run his company like he wants, it's his company sure; but I think he'll go down publically as the patsy he seems to be, whether true or not.
I think his company will eventually escape unscathed in terms of revenue and cash flow, if they can defeat the TPS counter suit; but he does so by sacrificing common shareholders who've supported him for going on 2 years.
He's pretty much cashed us in, myself included in order to hold faith with the Preferred. On one hand you can't blame him, they were his initial backers, friends and close associates. On the other hand, the question of ethics, and fiscal responsibility are brought up, which have been completely abandoned in order to serve the ulterior purpose of enriching those friends, and close associates.
I heard PXYN had a meeting the other day regarding what steps they can take to eliminate share structure expansion. I've heard Ed shut things down.
Quotes from Lauren, the IR:
Expanding the actual business – our pharmacy and billing and collections company – is the only answer to getting the stock to be where it should be ... By putting the majority of efforts and finances into the business opposed to back in the stock will actually strengthen the business and thus strengthen the stock
We are not allowed to restrict people from selling their stock. There was a 6 month and a 1 year holding period which have ended. The shareholder is responsible for converting their shares from restricted to unrestricted and once they do the company cannot keep their shares from them. They paid for them just as you paid for yours.
PXYN, forcefully defending the Preferreds in lieu of the common shareholder.
What I'm hearing from PXYN is very clear.
1. They will take no action to limit, negotiate or mitigate,those Preferreds who choose to dilute the share pool. 2. They will not spend money on a buyback. Ed believes that money is better spent on CAPEX.
Some good and bad in there. Of course, historically PXYN has never spent cash on CAPEX so I don't know what finance is being put back into the business. They LEASE. There's no internal investment to speak of.
If you read between the lines, it becomes clear that Ed supports the Preferred exodus and continued dilution of his stock. The pumpers will disagree. They will point to the quotes above and highlight the value statements and tell you fundamentals mean something on the OTC but that my friends is a lie. PXYN can use a big board reason to justify their refusal to execute a buyback, but we trade on the OTC, a Speculative Market.
Does anyone think that Ed Kurtz doesn't understand this by now?
Of course he understands this. Almost 2 years of fighting off common shareholder demands should have clued him in by now. He knows this is a speculative market, and is using a big board, fundamental driver as reasoning to justify an increase in PPS.
Well there it is folks.
As definitive as we're going to get, since the CEO himself refuses to communicate with common.
Interpret as you may. All I urge is caution from here on out.
If PXYN shows me something worth evaluating, I'll provide an impartial evaluation. What I've seen to date is a share structure that continues to expand, and a CEO who's been dead silent on the issue for 2 years now.
You can cut them some slack in the first few months. Even cut them some slack for the first year, if things go a tad wrong and they need to correct. When you cut them slack 2 years in; well I'm sorry to tell you this but you're just fooling yourself. These guys are diluting the share pool and Ed Kurtz absolutely understands this and is allowing it to happen.
You know what I think? I think Ed is running a pretty tight ship over there at PXYN. I think he took the reigns knowing it was a dirty ship, and is allowing the dirtbags to exit; and while that affects us common, it shouldn't come as a surprise. He's spent the last 2 years remaining steadfast and silent against common shareholder requests for information about share structure. He's not going to suddenly change course tomorrow.
This will run it's course.
You're right about one thing though. I am angry; because I saw an opportunity in PXYN that Ed Kurtz hasn't seized upon. There is the sure (safe) way to recuperate an initial investment in the OTC which PXYN has taken. And there is a riskier way; one I think PXYN had a chance to go for, and still has although the window of opportunity has dramatically diminished 2 years in. That opportunity requires the CEO, Ed Kurtz to fly in the face of established OTC norms. It's why I criticize him every day, and will continue to do so until I see the window of opportunity close. That guy can effect change, if he really wanted to. And take everyone here with him. It's what we all want, regardless of what you might say and argue here on this forum.
So I've taken a negative view lately, because the guy doesn't have the balls to go for it. If you really want to help; help Ed Kurtz understand the message. There's a way for everyone to benefit here; bulls, bears, and common and preferred alike. Get him to understand that he needs to change his tune, reverse course and take a Risk. He will win supporters, loyalists and friends from everyone he makes wealthy and his conscience will be clean.
Or he can continue to allow preferreds to dilute and remunerate as he's probably agreed to allow, and we can just continue to throw barbs here at each other on the ihub forum as a rare opportunity slips away.
I'm suggesting, for lack of a better explanation by action or assertion from the company; the simplest reason to maintain minimum channels of revenue.
Reasons why PXYN does not pursue further revenue channels (marketing contracts):
1. There are no marketers available to contract with. (unlikely) 2. No marketers want to work with them. (unlikely, unless the industry views PXYN as a scam) 3. PXYN does not want to work with anymore marketers. (most likely).
Reasons why PXYN may not want to work with more marketers:
1. They don't want to grow too fast. (unlikely) 2. They're lazy, or incompetently managed. (more likely) 3. They're a shell game. (more likely).
If I've missed a reason, go ahead and amend my post. I admit I take a negative view of PXYN these days.
PXYN, NHS and PfD could cancel their contracts tomorrow and disappear into the woodwork, within 30 days, leaving an empty shell; and angry employees behind. That's been the systemic risk since day 1 that they've failed to address for 2 years now; first with TPS.
They seemed to have no issue finding a suitable replacement for TPS when the need arose. This leads me to believe PXYN has no interest creating multiple sales channels and fortifying their business model. It appears the involved parties want to maintain the ability to quickly cut ties and close shop if the need arose.
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