ScripsAmerica Inc. (SCRCQ)

[Bsav88atty]

Interesting opinions:

Debt financing is debt financing. I don't care whose hands they are in.

I assume you meant, "equity financing" (a/k/a dilution). There are few shareholders who want their investments diluted. But for a young, development company fighting for financial survival who also needs extra funding to take advantage of a highly profitable business, most of the times dilution is required to move forward. Even with this last heavy round of dilution, the good news is SCRC's share structure is significantly lower than the vast majority of companies trading at its current price range...as well as companies trading in even higher price ranges. Indeed, most of the companies that are promoted by the well-known penny promoters on iHub with their own special boards have share structures well above 400 million, many with 1 to 2 billion shares or even more.

Today, SCRC has fewer than 130 million shares outstanding. Assuming only the speciality pharmacy revenues capped out at $1 million (I believe it will hit $2 million by the end of the year and go much higher in 2015 and beyond), and an additional 30 million shares by the end of the year, in my humble opinion, the pps would be properly valued above $0.52. (This assumes $4.2 million net income annual run rate, 160 million total OS, and a 20 PE (which would be well below the average PE ratio for companies with consecutive quarters of 50% or higher eps growth)). Applying the same formula but increasing the total OS to 200 million would still provide a minimum value on the above $0.42. That said, at $1 million monthly from Main Ave Pharmacy, this company is just getting warmed up.

Without the funding that occurred from different sources in Q1 (by the way, some of the funding was not dilutive per the 10Q), Scrips would now be standing on very shaky ground and it would have been unable to acquire the specialty pharmacy. Indeed, there is little doubt that without the additional dilution SCRC would be trading below $0.03 and knocking on the door of either bankruptcy or a massive reverse split followed by another round or two of extremely heavy dilution. So, yes, dilution is generally not the preferred method of financing. But many times it is the only option. And this time, the additional equity financing clearly enabled ScripsAmerica to regain its financial footing and positioned it for a 2014 breakout that will impress even the most optimistic shareholders.

As to your comment about "whose hands they are in," look no further than the past several months to see the damage that the numerous unfriendly hands has done to the share price. These folks have fought each other over the bids for so long that I am amazed the stock price held its base so well. Indeed, there were many people who opined the pps would drop to below $0.05 back in January and February. The good news is this painful selling pressure is almost finished. And when we finally empty what appeared to be a bottomless bucket of toxic shares, you and the rest of us will finally understand why the types of hands holding shares matters a great deal. Until then, I am sure you will have an easy time refuting my opinions. But that is okay, I am patient and I do not believe I will have to wait much longer.

While the terms may be more favorable they were at the very least somewhat deceptive when they said they paid down their last convertible note with every intention of inking a new one in the immediate future.

This statement clearly implies that you disagree with my prior two posts, as you lumped "convertible note" into one bucket. And I won't re-state how different the terms are between the unfriendly toxic notes and the friendly notes, but I will take issue with your opinions that the company was deceptive and had "every intention of inking a new one in the immediate future." As the co-founder and the largest shareholder, Bob Schneiderman would not attempt to intentionally deceive his co-shareholders. He acts with the utmost integrity and always looks for ways to add shareholder value and reward their patience and loyalty. And none of us know what Bob was thinking when he told us the company did not intend to write more convertible notes. I believe my prior interpretation is right on the mark. And if so, he has held to his word.

Bsav88atty (these are only my opinions for which I am not compensated)