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Medge...I'm free right now on iHub...so thank you.
It is as I mentioned...tax deductibility and an off balance sheet transaction. Some excerpts...
http://www.omchospital.com/medical-supplies/tax-and-cash-flow-benefits-of-leasing-medical-equipment.html/
As medical technology is ever changing and new equipment enhancements are developed, renting equipment is a logical choice for a variety of reasons. Medical equipment leasing can keep their balance sheet intact, as monthly equipment lease payments can be classified as operating expenses. This would also allow the provider to benefit from tax deductibility.
According to industry research, over $3 billion of medical equipment was leased last year in the United States. In its simplest form, the lessor purchases the equipment and then rents it to the lessee. At the end of the lease term, the lessee has the following choices:
Buy the equipment
Re-lease the equipment
Rent new equipment
Return the equipment
The worth of medical equipment does not come from owning it, but rather from the results of its use.
Tax Advantages: An operating lease (also known as a true lease) generally allows the lessee to write off 100% of lease payments made during the year. The equipment write-off is tied to the lease term, which can be shorter than IRS depreciation schedules, resulting in larger tax deductions each year. The deduction is also the same every year, which simplifies budgeting.
Maintains capital reserves: Leasing allows you to buy the equipment and tools you need today while spreading out all the payments over time. This provides you with a cash reserve for day to day expenses. Since a true lease is not a long term obligation, it will not show up on your balance sheet, so the company will be more attractive to a conventional lender when or if one is needed in the future.
Medge...
Unfortunately, you just lost tons of credibility with me.
Now I'm really feelin it.
Spike coming in the afternoon...just based on previous assumptions...
Reason why I asked is because I'm starting to believe that this Socius Deal is there purely to provide capital for materials that would make up their leasing arrangements.
Since hospitals can now lease and upon contract signing for outright purchase, 60% of the billing is due MCLN up front and 20% when materials are delivered. All well and good if they're buying, as they've identified that their revised pricing structure is now a 58% PM (if I recall correctly without reviewing DD numbers).
If MDAS' army is out selling ROIs in the form of reduced costs, then in all likelihood MCLN will eventually be inundated with leasing requests (removes a liability transaction, just an expense) putting a serious strain on corporate capital and possibly resulting in reduced costs to MCLN (economies of scale), further bumping profit margins, and eating into the 10% coupon payments.
All IMHO.
Worst thing would be to hold up leasing contracts. I'd imagine payments begin when online.
Hmmm, need to think this through some more...
If this is the case, all revenues during this statement will be all sales, and very little leases I would imagine.
Does anyone know if any of the Preferred Shares in the Socius Deal been sold?
What I also find interesting is that if you check pinksheets.com, the short interest, as of 02/12, is zero.
Now why would these numbers be so wildly different...
Hmmm! =)
I hope you're around after earnings are released, especially if they're positive.
I'd hate to see you 'disappear' as fast as you 'appeared'.
heh!
I wish I had another 20k I could dump into this stock.
They call guys like this...rookies.
Let us not forget that MCLN can lease this equipment as well, which moves it from a liability to an expense on the financials of these health networks.
I believe the real party starts late this week / early next week into earnings.
Welcome back (not really)...
Then just sell your shares. Why save the world?
If I knew all that, I wouldn't need my job!
That being said, I believe that it is loading the gun like last time for an explosion. If we have a sudden increase in pps to .03 on no news, I think they are covering again. Which is probably, IMO, what led to our recent increase to .027.
Bottom line, I think the traders are pretty much gone from this security until figures are released. People seem to be holding and adding, if anything.
20100226|MCLN|1466475|2724811|O
http://regsho.finra.org/FORFshvol20100226.txt
I think the cost associated with RMW varies according to what RMW segment you treat. Here's some DD I used to form my opinions...
This is old from 2003, but costs haven’t gotten much better…every business owner I speak to (I'm in sales) indicates that every year they are in business, they really never see cost reductions without innovative alternatives. Therefore, I believe it safe to assume that the costs outlined below are higher if status quo has been maintained.
http://www.abag.org/bayarea/dioxin/pilot_projs/MW_Background.pdf
This is something from 2007 showing Steri-Med, a dialysis RMW treatment machine. Look at the grid for hauling just this segment of RMW at the bottom of the page.
http://www.renalbusiness.com/articles/07novcover.html
This is just the RENAL segment of RMW. Every other system that I have found for onsite waste treats a specific kind of waste or is limited – sharpies, dialysis, etc. MedClean is a TOTAL SOLUTION. From incineration to shredding (including HIPAA document destruction), it handles it all. MCLN solution further eliminates the need for shredder companies (Iron Mountain, etc.) to come and do onsite shredding of HIPAA documents.
Moving on to specific states...
Copied and pasted from the link below, this is the State of NY:
http://www.health.state.ny.us/facilities/waste/#on_site_treatment
On-site Treatment and Disposal Strategies
As a result of the revisions in definitions of regulated medical waste and the ability to dispose treated regulated medical waste as solid waste, on-site treatment programs should be equally or more cost effective than many commercial options. With regards to utilizing on-site treatment of RMW, two questions are frequently asked. One - why should the facility have an operational plan approved and on file with DOH? While it is required pursuant to 10NYCRR, Part 70-3.2, it is important to note that having such a plan in place will assist the facility in disposing of such waste as solid waste. Hospital and clinical laboratory RMW operational plans using autoclave treatment methodology must be submitted for review and approval to the Clinical Laboratory Evaluation Program, Wadsworth Center, New York State Department of Health, P.O. Box 509, Empire State Plaza, Albany, New York 12201-0509. All other Article 28 facilities must submit their operational plans developed to address the on-site treatment of regulated medical waste by autoclaves to the Bureau of Hospital and Primary Care Services, Hedley Park Place 433 River Street, Troy, New York 12180-2299.The second question relating to autoclaving regulated medical waste is the type of bag to be used to collect and store the waste prior to treatment by autoclaving. The typical red bag currently employed in the collection of regulated medical waste is not designed to withstand the high temperature and pressure conditions created in an autoclave. However, there are specially designed bags which are available to be used in autoclaving regulated medical waste. These bags not only remain intact, but also enhance the sterilization process by allowing easier passage of steam into the waste. The department encourages those facilities which utilize autoclaves to treat regulated medical waste to use autoclavable bags as they do come in the color red with the appropriate language imprinted on them.
MedClean is approved in all 50 states. Besides the sales of the systems, lets not forget the quiet carts and ongoing revenues from the sales of supplies - bags, etc.
GLTA
Interesting observation tex!
I also looked to a stock like, oh, say....VMRLQ for how a penny stock trades...didn't get much info there either.
As they say...
If ifs and buts were candy and nuts, every day would be xmas.
Lets see...
Recent trade of 2500 shares at .021...
$52.50
Uhhhhhhhhh..........
Tex, was that the last money you had in your piggy bank?
http://regsho.finra.org/FORFshvol20100225.txt
29% of the volume was shorted yesterday.
If they hammer home a government contract for the VA network, look out!
Looks like that money for the VA items should have been used up over those 4 years. Am I missing your point?
Hopefully, they get caught early March with their pants down.
Unbelievable action today...
All that volume led us to .027 and then less than 1M brought us down. You kidding me?
Personally, my shares are being held until we nail the .14 target Goldman identified, which I believe is plausible.
I'll be trading from there...and that's all I'll say!
Someone didn't lock the lid on this pressure cooker...
Pretty soon, the top's gonna blow off!
Someone is really desperate. I'm showing nearly 1.5M shares traded in the first minute, which suppressed any spike in pps.
i.e. shorts.
I read somewhere that they did not, but I do not have time to go through all my DD to pick that out.
Do you think its possible that they could pick up another GPO agreement, or do you think MDAS is an exclusive deal?
If I were MDAS, it would be exclusive. Gives me an advantage over other GPOs and is a sales/differentiation to get in the door.
Can you produce a link? It's only showing 02/19 info right now.
Let me be clear about this Horns. You sure you want to go down this path? There's several other people that have legal problems based upon unfounded remarks like this against biomedreports. They defend their integrity with unrelenting purpose.
I'm a member of biomedreports and find their service to be an invaluable part of the DD I conduct. For the record, they prompted me to conduct DD on this firm, and only after this and talking to doctors who work in hospitals did I invest.
What I am saying is maybe you chase articles for the next big 'winner'. I, on the hand, don't.
I gave you the link...read the article and find it.
You're the lady. Read this link VERY CAREFULLY. Look for statements made by management. Here, let me help you...
Earlier this year in fact, MedAssets, Inc. (NASDAQ: MDAS), the $23 per share company whose group purchasing organization partners with hospitals and health systems to help improve quality and lower costs within the U.S. healthcare system awarded a contract to this penny stock company, and while specific financial details of the lucrative contract have yet to be completely revealed, it's safe to assume that the contract has enhanced the company's financial strength. After all, MedAssets runs one of the nation's largest group purchasing organizations (GPOs) and it helps to facilitate not only sales but leases of the equipment.
"Our manufacturing and installation bandwidth is running at full capacity," says David Laky, President and Chief Executive Officer of the company, "but that's a nice problem to have and we're actively making changes to accommodate more orders."
"We're excited about the collaboration with MedAssets and they have definitely enabled us to provide our solutions to an expanding base of customers,” adds Chairman Grisanti.
A systematic way to recognize revenue with signed contracts is a 'revenue gimmick'?
Too funny. Any other swords you want to fall on?
Read Dannol's posts about privacy of the hospitals.
MDAS is not going to list MCLN or any other vendor on their website as THESE ARE SOLUTIONS FOR MDAS THAT SEPARATES THEM FROM OTHER GPOs.
Don't spill your candy in the lobby...for those of us in sales =)
Right on with the payments to MCLN by their clients.
However, I don't think MDAS would get their cut until the cost savings are realized on the hospital's financials. The email to IR I posted indicated that if they can show a compelling ROI, then the hospital can adjust at that time.
Considering RMW costs 8-10x as much to deal with as regular waste, it looks like MDAS could recieve a significant revenue stream from the installation of these systems, if it works this way. I could only conjecture how these cost savings are continually calculated to derive MDAS' fees, but if it's year over year, MDAS has SIGNIFICANT INCENTIVE TO PUSH MCLN PRODUCTS.
Group Purchasing Organizations
Don't GPO's work in that you have a defined process that costs, say, $1.00. They provide access to a solution that reduces this cost to say $.78. The balance of the $.22 is the cost savings and MedAssets receives, as an example, 35% of that cost savings they have driven.
I'm pretty sure it works this way and therefore, MCLN would not have to provide a cut.
I could be wrong, but I've heard of group purchasing working this way.
At the close on Friday for Medassets, the trailing 12 mos without this mornings info was $.75
That puts the multiple on this company at roughly 27x
SRCL closed on Friday at $54.30, or 26x
I point these out as I think that 15x is too low, if MCLN announces decent results. Let's say they clear $1M, which would put trailing 12 months, not factoring the losses as the company is growing, at roughly $1.4M. At 25x, that's a .051 price, not factoring in any growth into 1Q & 2Q.
With that said, I could easily see the short term target of .14 in Goldman's report as plausible, and if they are offering their product to more and more customers, $.40 isn't that far off or out of the question. If results are positive, I believe the only real question is if there is any manipulation that can continue to pin it down until enough buying interest swamps this symbol, and they are forced to let it go.
Again, all this is JMHO
I didn't say I liked it...
Good stuff! I have to say, that in this sector, where so much depends on whether you have a product (phase II or III), whether you can commercialize/distribute and whether you can even find the next capital to continue to fund your operations, MCLN has it all. They just have to execute.
Approved in all 50...compliance, HIPAA document destruction, etc.
What's not to like about these fundamentals from a speculative perspective.
We'll see in 30 days.