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For those retail participants keeping score...
Since the PR & 8K re: the loss of CVS/Caremark's revenue stream for Main Ave (BUT, it is important to remember that we do not know whether this loss is temporary vs permanent and we do not know the magnitude of the loss), we have traded over 2.5M shares over the past 5 trading days.
It is interesting to see that even before this precipitous fall over the past 5 days, the VWAP was already in a 3-day losing streak even BEFORE the PR & 8K re: CVS/Caremark was issued.
The VWAP on 3/3 was approx .178. It has since fallen for 8 consecutive trading days, with the approximate VWAP over these 8 subsequent days being:
.175 (3/4)
.171 (3/5)
.169 (3/6)
.150 (3/9)
.141 (3/10)
.132 (3/11)
.123 (3/12)
.114 (3/13)
It is easy to see that for the first 3 days of the decline in VWAP, the daily decline was very small, which is indicative of a stock going thru a slow bleed trying to maintain support -- but in a very delicate and fragile situation where news one way or the other will likely send it soaring or crashing.
And so it is of no surprise that we see the next 5 days of the declining VWAP be of much greater magnitude each day -- as the beginning of this 5 day period coincides exactly with when the bad news in the PR & 8K re: CVS/Caremark came out.
What is REALLY interesting is that the daily declines in the VWAP this week ever since the PR & 8K came out has been EXACTLY THE SAME: A drop of exactly .009 each and every day.
Granted, my VWAP numbers are estimates, but I am applying my estimating methodology consistently so each day is still a fairly reasonable apples-to-apples comparison w/regards to the VWAP.
It may simply be an eyebrow-raising coincidence... ...or it may be that the big seller each day has actually been the same person each and every day (or group of similarly-positioned individuals) who are trying their best to manage their dumping in a methodical and controlled manner so as to not cause an all-out cratering too quickly (yes, folks, as bad as the drop has been, it could have been a lot worse)... ...but again, it may simply be a head-shaking coincidence that becomes the stuff that urban legends are made out of, LOL...
@flyers,
Thanks for notifying the board of the 8-K.
Typically, the language of a 8-K is most often simply a copy/paste of the related PR that is issued either immediately before or immediately following the filing of the 8-K.
But what is interesting is that in this particular case, the language used in the PR is quite different. Here is the PR that was issued in advance of the 8-K:
DILUTION UPDATE:
First off, apologies to those who have been requesting this for some time now, but due to the low liquidity we have been experiencing, it simply is of no value to provide updates every few days or even weekly or bi-weekly.
As it has now been a month since my last update posted on 1/25/15, and approx 5.3M shares have traded, an update is now warranted for folks to get a picture of where we are at and what we still face.
As a reminder, understand that there is no exact science behind this and there is NEVER any way to know for sure. That being said, as explained previously, I have found that for penny stocks, there is a statistical pattern/relationship that has historically shown to be tried and true in being a fairly reasonably accurate gauge for this. As such, here is what remains IMO:
• Priced between .06x and .13x ----- 0 shares left ----- started out w/21.0M shares (all gone, IMO)
• Priced at .14x ----- 1.0M shares left ----- started out w/3.1M shares (priced to sell at around .196)
• Priced at .15x ----- 0.5M shares left ----- started out w/0.8M shares (priced to sell at around .210)
• Priced at .16x ----- 1.0M shares left ----- started out w/1.0M shares (priced to sell at around .224)
• Priced at .17x ----- 1.9M shares left ----- started out w/1.9M shares (priced to sell at around .238)
• Priced at .18x ----- 0.2M shares left ----- started out w/0.2M shares (priced to sell at around .252)
• Priced at .19x ----- 1.0M shares left ----- started out w/1.0M shares (priced to sell at around .266)
• Priced at .20x ----- 0.9M shares left ----- started out w/0.9M shares (priced to sell at around .280)
• Priced at .27x ----- 0.6M shares left ----- started out w/0.6M shares (priced to sell at around .387)
• .05 PIPE stock ----- 6-7M shares left ----- started out w/22.0M shares (always priced to sell immediately)
So we can see that the major change is that all the .12x and .13x shares are now effectively gone.
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@Garcimore00,
In response to your question yesterday re: what the PR about signing up the 500th customer for the diabetes supply segment means to SCRC’s income…
First off, I think it was interesting that NO revenue numbers were PR’d – but instead we were simply told that 500 customers have been signed up. I am curious as to the reason why the revenue numbers FOR THOSE 500 customers were not announced as I would surmise that an initial order would have been placed for all new customers at the time they signed up? After all, BS Schneiderman had never missed an opportunity to PR numbers before, even if they weren’t huge.
In any event, your question is an impossible question to answer at this time. Similar to when Main Ave initially launched, and similar to how SCRC just announced PIMD monthly numbers for the first time, we will need at least 3 months of numbers in order to even BEGIN to make heads or tails out of this revenue stream. Why? Because month 2 will give us our first peek at the rate of growth on a month-over-month basis. And month 3 will be an important indicator as to whether the month-to-month growth we saw from month 1 to month 2 was a fluke or may be sustainable. And then months 4 and 5 will enable us to smooth out the rough edges in our forecasting model.
You will be surprised at how often growth rates for new product launches end up falling within a predictable bell curve pattern. It is why towards the end of Spring last year, based upon the monthly growth rates over the first 3-4 months of Main Ave (in particular, the CHANGES in the rates of growth each month), I projected that by early-Q4’14, Main Ave should hit $5M/month – and it ended up hitting this $5M in SEP, only one month earlier than the bell curve estimated it would.
BUT, specifically for this diabetes-related revenue stream, we can’t make any projections on what having 500 customers enrolled may translate to from a $$$-perspective until we know the following:
• Is it ONLY Type II diabetes that Main Ave is servicing? Or is Main Ave servicing ALL diabetic needs?
• Is Main Ave ONLY providing the SUPPLIES? Or is Main Ave also providing the various drugs as well? As a pharmacy, I would think they would supply the actual drugs as well, but I don’t think we can say for sure yet, especially since the name BS Schneiderman gave to this new business segment specifically included the words “equipment and supplies” and all the PR’s about it have always emphasized the equip/supplies aspect of it.
BUT, unless/until shown otherwise (hopefully the 10K/Q’s will provide more details in the disclosures about this new segment), I will presume that Main Ave is providing BOTH the equip/supplies AND the actual meds since it kinda makes sense for them to do so (after all, they ARE a pharmacy).
The cost for the meds depends on what exactly the doctor prescribes. If you look at the bottom of the report linked here…
http://effectivehealthcare.ahrq.gov/index.cfm/search-for-guides-reviews-and-reports/?productid=721&pageaction=displayproduct
…you will see that the WHOLESALE price for a 1-month supply of the various types of meds vary from $9 to $505. This range is way too broad to try to make any projections at this time. And this is just the list for Type II diabetes. Plus, I do not believe this includes any of the “supplies” that a diabetic constantly needs to buy again and again.
And keep in mind, this is just the wholesale cost to pharmacies. Pharmacies will mark these prices up when they sell to customers, so the revenue numbers will be higher than what you see listed in the link.
AND, another factor that muddies up the water even more is that none of us have any clue what the insurance companies’ agreed upon rates are. All we know is that, as with any health insurance related coverage, the amount of revenues that a service provider (be it a doctor for an office visit or a pharmacist in selling Rx’s) makes on a transaction is LOWER when paid for by insurance compared to when the transaction is paid for at “rack rate” directly by an uninsured consumer.
Lastly, just as with PIMD, although topline revenues always look nice, we need to see for both PIMD and this new diabetic equip/supply segment what the BOTTOM line contribution is, as this is where the rubber meets the road from an investment-thesis perspective.
I know it is not the specific answer you are looking for, but I do not believe that the answer you are looking for exists at this time. We will all just have to wait and see. The future monthly PR’s combined with the upcoming 10K and 10Q should be very informative in this regard.
THAT BEING SAID, just for giggles, let’s speculate a bit. Let’s say that within the $9-$505 per month range, the avg WHOLESALE cost comes out to $250. And let’s presume the margin on the COGS is 50%, so this means that the avg “sale” is approx $500. I have no idea how much the supplies/equip cost, but in searching the web briefly, I think a reasonable guesstimate may be an avg of $50 more per month in sales for consumable items such as syringes, etc.
So that brings our completely speculative guesstimate to $550/mo per customer. At 500 customers signed up thus far, if they all refill their supplies and meds each month, this computes to approx $275k/mo. Not too shabby for a first month. Factoring in zero growth, it is already annualized to be approx $3.3M per year.
Conservatively, even if it doesn’t even double but simply tops out at $500k/mo, this represents $6M/year in additional topline revenues. That’s an additional 11% of accretive revenues on top of the $55k that was forecasted for Main Ave, which is a material increase if our guesstimate is anywhere in the ballpark.
As a slight tangent, if we look at PIMD (again, considering topline revenues ONLY w/o consideration of how profitable they actually are), they reported $137k last month. If PIMD were to also top out at $500k/mo, this would also represent another $6M in sales/year.
Together, the diabetes segment and the PIMD segment would then potentially contribute 22% in additional revenues on top of the $55M that was forecasted for Main Ave. That would be a very welcome sight to see should our guesstimates be anywhere near reality.
IMO, by the end of Q3’15, we should have a much clearer idea of where both the PIMD and diabetes supply segments will likely top-out w/respect to monthly run rates, and whether they will indeed be the bona fide contributors to SCRC’s top and bottom lines that we are hoping they will be – or whether they will simply become another WRx...
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At long last, a green day, and a break from 7 straight days of declining VWAP's...
...hopefully, today will be the turning point and it will be time for the volatility swing to take the sp back up again...
...technicals are slooooowly improving as barchart.com now show both the Strength and Direction ratings shifting back up into the 40-50% percentiles (Strength rating had been as low as the 20-30% pecentile and the Direction rating had been as low as the 0-10% percentile just a few days ago)...
...if we can get both the Strength and Direction ratings back up to at least the 80th percentile, then I believe that will trigger another wave of technical buying to occur...
LOL, see what I mean? And so it begins...
Regarding the $4M LOC...
...First, it is important to remember that it is NOT actually $4M... ...SCRC is permitted to draw down a maximum of 85% of Main Ave's A/R balance, and this is only UP TO $4M.
To put it in perspective, the 9/30/14 A/R balance was $3.2M. The most recent SEP approved orders number was $5.5M. Therefore, a rough ballpark estimate is that A/R constitutes approx 58% of monthly approved orders. This means that based on the most recently available 9/30/14 A/R balance, SCRC would have only been permitted to draw down $2.7M.
Now, fast-forward to present day. We know that JAN-2015 approved orders came in at $3.4M. So if the collection rate remains consistent with what it was just 4 months ago, then the current A/R balance should be approx $2.0M. And so the maximum that SCRC would be permitted to have outstanding on this line of credit is now only $1.7M (85% of the $2.0M A/R balance).
Why is this significant? Because we know that SCRC already PR'd that it spent a portion of the LOC on paying down some higher-interest rate debt.
We have no idea what else SCRC has used the LOC for, not to mention how much of it was drawn down. If it has not drawn down any further amounts then we have no issue. In addition, if SCRC did draw down additional funds, so long as the cumulative amounts drawn is less than $1.7M, then we are fine.
HOWEVER, if SCRC were hypothetically to have drawn down $2.5M because back then it would have been permitted to draw down $2.7M (85% of the $3.2M A/R, remember?), but now because JAN numbers plummeted down to $3.4M -- thereby reducing A/R to $2.0M, and reducing the 85% of A/R limit to only $1.7M... ...well, you see the dilemma here, folks?
This $2.5M that was drawn down a couple months ago when the limit was $2.7M is now considered to be over-drawn and in violation of the terms of the LOC because the limit now has decreased to only $1.7M.
So what this means is that, in the above HYPOTHETICAL scenario, SCRC needs to find a way to paydown $800k immediately to get the outstanding balance down from $2.5M to $1.7M.
If SCRC is unable to regain compliance within the timeframe specified in the terms of the LOC, then the financier will have many options available to it to force collection via either garnishment of SCRC revenues/receivables as well as seizures and liquidation of other SCRC assets.
This is similar to what got SCRC in trouble with Ironridge last year. SCRC needs to make 100% certain that it is able to live up to the terms that it has agreed to and not welch on its word again -- otherwise, shareholders will be subject to Ironridge deja vu all over again...
Another pathetic attempt by JOSEPH ZAMPETTI this evening to play down the impact of his criminal securities fraud he engaged in against SCRC shareholders: