ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

my suspicion is that the stock price will not react that much next week with the typical low volume. Whether quote good or bad news has come out, the stock price does not react very much. Especially saw this when MAV went down to $3.1M in Jan...not much selling or deterioration in stock price. Sometimes with these OTC stocks, there is a huge uptick in buying and change in stock price for no apparent reason - meaning, not PR related.

@FUDUDE,

Your observation is dead-on.

SCRC's sp has NEVER moved in sync with its operating fundamentals; rather it has moved the way every other penny stock moves: When either (1) Real numbers get published that are clearly meaningful; (2) A catalyst (doesn't matter whether it is real or fake) gets hyped to high heaven; and/or (3) Technical indicators scream out "buy!" or "sell!".

And until SCRC uplists to a senior exchange and moves out of the OTC ghetto, it will continue to experience volatility and extended periods of illiquidity that bears no relationship to its fundamentals.

Why anyone would ever simply "buy and hold" a stock like this is beyond me. What is even more head-shaking is how Section 17(b)-violating promoters such as JOSEPH ZAMPETTI and his "inner circle" (LOL!) of fellow criminals can look at themselves in the miror after advising and urging those who trusted them to "buy and hold" (but NEVER sell or trade, only add!) SCRC stock from the time the sp was $1.00+ all the way down to .08x...


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Let's say MAV's revenues realize a loss of 10-30% (just a guess), and SCRC averaged $4M each month. Monthly revenues would now be $2.8M - $3.6M, if SCRC acquires interest in two additional pharmacies generating the same volume, total monthly revenues could top $6M each month.

@Guts,

This is not an accurate statement in light of US GAAP, and is sadly reminiscent of the other similarly false statements that were previously put out by JOSEPH ZAMPETTI and his "inner circle" (LOL!) of fellow criminal associates that also attempted to falsely claim revenues which US GAAP does not permit them to recognize, record, or report -- I'm sure we all remember the ridiculous claims that once PIMD got licensed in NJ, that it would sell raw materials to Main Ave and SCRC would be able to "ring the bell twice" and "double dip" by recording the same revenues TWICE based upon PIMD selling to Main Ave and then Main Ave turning around and selling to the end-consumer.

Remember, folks, I stated in a prior post very recently that SHOULD any investment eventually be made (remember, we are only in the LOI stage of negotiations at this point), a VERY critical data point that was NOT disclosed in either the PR or the 8-K is what percentage of equity stake SCRC is intending to acquire in the two target companies.

Depending on what SCRC's equity stake percentage is, there are THREE different accounting and reporting treatments that could unfold -- NONE of which reflects the impact to revenues the way it is being described above.

Here is a crash course in Accounting 101 on Business Combinations for those unfamiliar with US GAAP:

For the first two scenarios where SCRC may end up acquiring stakes of either UNDER 20% or BETWEEN 20%-50%, the cost basis of this investment is recorded simply as an investment asset on SCRC's balance sheet.

Revenues of the target companies NEVER show up on SCRC's income statement as revenues that can be measured alongside/with SCRC's own organic revenues.

SCRC's "income" from these investments are treated exactly as you would treat income from any of your own investments -- as an investor, SCRC only benefits if the investment has positive earnings. Let's put it this way:

If the target company has positive earnings, it will either distribute it or retain it.

If earnings are distributed (usually in the form of dividends), then this would not only have ZERO impact on revenues (or anything else on SCRC's income statement for that matter) but would actually DECREASE the value of SCRC's investment on its balance sheet (because US GAAP requires that any receipt of dividends be considered as a return of capital).

If earnings are retained by the target company, then SCRC's proportionate share of the undistributed earnings get reported by SCRC as simply a balance sheet only adjustment via an increase to the investment balance and a corresponding increase to shareholder equity.

In fact, the illustration above is technically for when the equity stake is between 20%-50%. If the equity stake is less than 20%, then the accounting is even simpler as SCRC would simply mark-to-market their share of any undistributed earnings/losses as unrealized gains/losses on their investment -- no different than the way you and I would view unrealized gains/losses on investments we hold.

So that brings us to the 3rd scenario, which is if SCRC acquires a stake in excess of 50% in the target companies.

In this scenario, SCRC would completely consolidate 100% (not simply SCRC's share) of the target companies' complete financial statements (i.e. income statement, balance sheet, cash flows, etc). This would distort the revenue picture on SCRC's income statement because SCRC would now be including ALL of the target companies' revenues even though SCRC is not entitled to all of it. This distortion would also exist in the expense section as well as the balance sheet and cash flow statement.

The ONLY way for shareholders to be able to sift thru this mess is if SCRC provides enough disclosures in its SEC filings to enable us to peel back the onion and perform manual reconciliations to compute what SCRC's portions of revenues, expenses, cash on hand, etc, truly are.

Because when a target company is acquired at a greater than 50% stake, the consolidation sucks up everything related to the target company and all we will see in SCRC's financial statements reflecting the amounts that SCRC is not entitled to is a solitary line item below the line that simply state the amount of "net income attributable to non-controlling interest".

There is technically a FOURTH possible scenario, which would only come into play if SCRC (regardless of the percentage stake acquired) elects to once again attempt to declare either/both of the target companies to be VIE's (variable interest entities), similar to how SCRC initially declared Main Ave to be a VIE but no longer does. This has its own issues and we will not open this particular Pandora's Box at this time.



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let's say we do 4M in several months and these other 2 pharmacies have 1099 reps @ 55% commission rates that would be spectacular to our bottom line for example:

1. 4M @ approx 12% currently is 480k per month 65% commission

2. 4M @ approx 22% net ( as I am assuming 55% commission is 880k net income on same 4M!!!!!!!!)

@tutter,

It is an amazing coincidence that JOSEPH ZAMPETTI and his "inner circle" (LOL!) of fellow Section 17(b)-violating criminals just so happen to also be starting to sing this exact same tune as well!!!

It is sadly ironic (but yet incredibly telling) that they are now touting the "amazing financial windfall" from these two potential investments in other pharmacies because these other pharmacies may have selling expenses of "only 55%" -- when these same vile criminals were spin-doctoring SCRC's own meteoric rise in selling expenses from 45% to 65% and praising it as a GOOD THING. Only a promoter who was either verse in weasel and/or possessed a forked tongue could talk out of both sides of their mouth with such ease and fluency...

So, to JOSEPH ZAMPETTI and his harem of paid whores, seeing 20% of net earnings go down the drain is no big deal (but was somehow still a reason to buy SCRC stock, LOL), but yet they are now hyping the possibility of gaining 10% because another pharmacy isn't paying unnecessary middle-men the way SCRC is? That is the textbook example of "1 step forward, but 2 steps back"...

The bottom line that the smart money knows is this:

SCRC can fluff all these new potential revenue streams that it wants, but it cannot escape the fact that those who know not to be distracted by mis-direction are fully cognizant of the fact that the singular easiest and most effective way for SCRC to grow net earnings is to get its own house in order by putting a lid on its out-of-control selling expenses.

To put it in perspective, at 65% selling expenses, Main Ave needs to do $150-$165M in revenues per year in revenues in order to simply match the net earnings that it would have enjoyed had it run $50-$55M in revenues per year but at the 45% selling expense rate that it experienced during Q1'14 and Q2'14.

Even running $10M in revenues for new segment A and another $10M revenues for new segment B won't be anything more than a drop in the bucket compared to what is necessary to make up for the increase in selling expenses from 45% to 65%.



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found this doing some DD this morning! The 25th Annual Investor Conference hosted by Wall Street Analyst coming in two weeks March 19, 2015 in NYC!

@tutter,

Nice find. This is very encouraging to see participation in more investor conferences. Keeping in mind that most mainstream TUTs will not buy into any company that is not on a senior exchange and/or trade above $5, my hopes are that PE firms will be the target audience for SCRC, as PE firms are the speculative investors who are willing to take significant long-term stakes in startups like SCRC. The worst thing for retail (BOTH retail traders and retail investors) is for HF's to come in. Why? Because unlike PE firms, the majority of HF's are short-term market participants who have ZERO long-term interests in any company. They are essentially nothing more than deep-pocketed flippers who play both the ups and downs and have the means to make life miserable for retail investors and traders alike.



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Yes Bob stated 2 -3 weeks. Radio interview was taped in January so its been a min. of 5 weeks so far. Whats the hold up?

@Sheadoggy and @Sandan,

Retail investors need to be aware that this anticipated shipment of RapiMed to Hong Kong is an example of what is known as a "fake catalyst".

Remember, this is simply the shipment of the initial PO to the distributor. It is NOT a shipment that has ANYTHING AT ALL to do with any actual sales yet. And actual sales to hospital networks and pharmacy/retail chains is the TRUE catalyst, if and when it occurs.

After all, if Company A reported a sale to Company B and then later on reported that the sale to Company B finally got shipped to Company B -- would you consider the fact that Company A finally got around to shipping product to Company B to be newsworthy and a catalyst of any kind? Of course not.

Fundamentally, NOTHING IS HAPPENING HERE regardless of whether we have gone beyond the 3 week period BS Schneiderman promised (after all, he already broke his promise of launching RapiMeds in 2013 and again in 2014; is it even a surprise that this hasn't shipped yet?). Look for substance over form -- and don't be fooled by form over substance, especially if you are considering when to hold vs trade.

That being said, for those who are traders, then understand that market perception is much more important than facts and fundamentals -- which is why promoters such as JOSEPH ZAMPETTI and his "inner circle" (LOL!) of non-disclosing criminals, who are still desperately trying to dump the millions of shares of the .05 PIPE stock that they still hold, continue pumping and hyping every little piece of news as if it is the second coming of the invention of the wheel.