ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

I have to know, what other options of raising funds with more favorable terms might have been more practical without dilution or convertible notes would you have suggested.

Shareholder-friendly financing only needs to have 2 primary characteristics: (1) Competitively priced, and (2) Non -- or minimally -- dilutive. That's it.

And the .05 PIPE shares fail miserably and gloriously on both counts.

As I have stated here countless times previously, every competent finance executive knows that convert notes are toxic when the company has no revenues and cash flow... ...HOWEVER, they also know that they are very beneficial, cost-effective, and shareholder friendly when the company is either generating cash flow or believes that it will in the near future.

Why?

Because a company (such as SCRC) would be in a position to paydown the convert notes upon maturity and prevent ANY dilutive conversion from occurring at all. With the cash cow that Main Ave became as 2014 unfolded, SCRC would have easily been able to paydown any convert note it entered into and saved shareholders 22M shares of radioactive .05 shares from flooding not only the O/S count but also the float.

Now compare this to the toxic .05 PIPE financing, for which ALL 22M shares became 100% permanently dilutive before the ink ever even had a chance to dry on the contracts.

So that is the pro-convert note, anti-PIPE argument from a dilution perspective (characteristic #2 above).

For characteristic #1 (pricing), once again, look at the fact that not only would the interest rate have been nominal, but even IF any conversions were permitted to occur, the discount would have been no more than 40% OFF OF THE PRICE AT THE TIME OF FUTURE CONVERSION. Considering that the avg VWAP for the past year was approx .12, by the time the notes would have converted, the WORST CASE SCENARIO for conversion pricing would likely have been around the mid-.07x range, which represents a very significant 40-50% increase in pricing compared to the .05 PIPE deal. And keep in mind, this is WORST CASE SCENARIO. And at this pricing level, the WORST CASE SCENARIO of the number of shares issued should ALL the convert notes converted would have only been approx 16.5M. So worst case scenario with convert notes would have been 16.5M shares priced at .07x. You're telling me that 22M shares priced at .05 is better???

...AND, considering that many convert notes mature in 1 year, it is likely that any notes would have converted this past JAN-2015 (again, worst case scenario assuming SCRC failed to pay them down) in the .15-.21 range. This means that a 40% discount upon conversion would have translated to somewhere between 13M shares priced at .09 and 9.5M shares priced at .126. Again, you're telling me that 22M shares priced at .05 is better??? Egads...

Here endeth the lesson...

Don't know all details but raisng funds at the time of Scrc in the time frame of the .05 issuance was a better choice for the company. Partly because of convertible notes were killing the price share before it could get off the ground.

Well that is an outright mis-statement. You self-disclosed yourself right here on this board that you were one of JOSEPH ZAMPETTI's proud associates who was one of the financiers disclosed by SCRC in its SEC filings as having participated in the toxic PIPE deal, so of course any participating finacier would have been privy to the details. In addition, it has been shown here countless times that if one were to look thru the historical tape and lay it side-by-side with SCRC's past SEC filings and lined up the dilution dates, one would see quite clearly that NONE of SCRC's prior dilution related to conversions of convert notes had ANY meaningful adverse impacts to the sp. Rather, without exception, every cratering of the sp in SCRC's entire existence had the fingerprints of JOSEPH ZAMPETTI and his criminal associates all over them. Please do tell me once more that you are not aware of this as I would love to have another opportunity to post all the putrid details for all to see again...