ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

No profit disappears in thin air. When MAV profits from lower cost of raw materials, it results in profits that SCRC will show quarterly and annually. If the profit would not be recorded, the IRS would have a field day. The dealings between MAV and PIMD may be eliminated from their books as you say, but SCRC will record any profits made.It is true that PIMD can charge a nickel or a billion dollars, but MAV uses PIMD's cost as its cost for determining profits which only show in SCRC's bottom line.

Although your IRS comment was funny, companies typically get in trouble for NOT eliminating enough transactions as opposed to eliminating TOO MUCH...

You are getting much closer to understanding the implications of inter-company accounting, kaleb. However, I see that you are still mis-using the entities in your sentences and that this is, as I have alluded to before, what will continue to create unnecessary confusion and angst in future discussions.

As just one example from just your comments above, when you state that "MAV uses PIMD's cost as its cost for determining profits", this is not a correct statement. "MAV" will use whatever it paid to PIMD as its cost for determining MAV's own profits (just as PIMD will use whatever it charged MAV as its revenues for determining PIMD's own profits). For your statement to be correct, "MAV" should be replaced by "SCRC". Make sense? Remember, as I've been trying to explain for quite some time now, each entity (i.e. PIMD and MAV) will account and report transactions to any and all entities just like any other business. IT IS ONLY WHEN IT COMES TIME FOR SCRC (AS THE PARENT COMPANY) TO CONSOLIDATE AND PREPARE SCRC-LEVEL FINANCIAL STATEMENTS, that it is then that the FASB's rules on inter-company accounting take effect and require the various eliminations that I had described -- which would result in PIMD's revenues disappearing and MAV's COGS disappearing, leaving behind only PIMD's costs and MAV's revenues (w/respect, of course, to the business dealings directly between PIMD & MAV).


I am glad to see that you have moved away from your previous claims which were both grossly erroneous and highly misleading:

"HE and I realize this would jump PIMD sales to more than one million per quarter. You may be able to get a better approximation if you know what fraction of the topical cream cost constitutes the chemicals. AT 10% the sales per quarter would be 1.5 million dollars at the current run rate of 60 million per annum."

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=108742790

"Now, PIMD can ship all the compounding cream raw materials to MAV and thus can add to its revenues."

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=110778848

The above two statements were both claiming (erroneously) that SCRC gets to recognize all the revenues from PIMD's sales to MAV.


"By rule, PIMD must sell the item at its own cost and this results in a wash-sale for PIMD."

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=110863644

The above statement was claiming (again, erroneously) that not only was there a "rule" (there is not) but that PIMD was required to sell to MAV at PIMD's own cost (they are not).


And in closing, remember that the benefit to SCRC is NOT simply the difference between what MAV would have paid to an outside supplier and what it ends up paying to PIMD. As I alluded to in previous posts, there are other data points involved in the ultimate calculus. After all, if PIMD's operating expenses are high or if they are unable to generate a profit, then any perceived gains for SCRC via reductions in COGS may be offset by PIMD's own continued operating losses. The true "net net" may be a case of "one step forward, but two steps back".

But let's just wait to first see what the 10K says about PIMD. Every company goes thru growing pains, so it would not be a poor reflection on PIMD if it was running inefficiently at this time -- BUT, as shareholders, we should demand accountability and proper stewardship of SCRC's assets and other resources, and rightfully expect that SCRC will quickly identify inefficiencies/waste and rectify them (such as the ridiculously high increase in selling expenses for MAV that is on pace to wipe out $12M in earnings this year if it is not brought back under control)...