ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

ScripsAmerica Announces $8.7 Million in First Quarter 2015 Approved Orders at its Specialty Pharmacy

This is interesting. With $3.49M reported for JAN and $3.76M reported for FEB (so a JAN/FEB total of $7.25M), this means that MAR by itself brought in only $1.45M.

As others have noted, what we do NOT know is how much of this $1.45M pertained to pre-3/13/15 (the last day of CVS/Caremark) vs post-3/13/15, and so we need to wait to see APR's numbers to know exactly what the impact of losing CVS/Caremark is.

ScripsAmerica is expected to generate net income of $400,000 on nearly $10 million of revenue

This is also puzzling. In theory, both the $3.49M from JAN and the $3.76M from FEB should have been prepared and shipped to customers by the time 3/31/15 rolled around. So all these should be able to be included as part of the "nearly $10M in revenue" number. In addition, with hardly any orders in MAR, there should hardly be any backlog at all, and so even in a worst case scenario, at least $1M of the $1.45M for MAR should have been shipped out by 3/31/15 and eligible to be included as part of the "nearly $10M in revenue" number. So the JAN thru MAR total is $8.25M worth of revenues.

In addition, we know that PIMD reported $137K in JAN and $554k in FEB. Even if PIMD had ZERO growth in MAR and reported a flat $550k, this would mean that PIMD contributed $1.24M towards this "nearly $10M in revenue" number.

So taking the $8.25M in compounding revenues and adding it to the $1.24M of PIMD revenues, we already get to $9.49M. This is already pretty much right at the "nearly $10M in revenue" number that BS Schneiderman is reporting for Q1'15.

So what's the problem?

Here is the problem:

Remember from one of my prior posts (see the sticky post # 22594 above), SCRC is sitting on approx $7M worth of backlog as of 12/31/14 from Q4'14 approved orders carrying over into Q1'15. So as these get filled and shipped out, they get recognized as part of Q1'15 revenues even though they were "approved orders" from Q4'14.

So what this means is that if we are already hitting this "nearly $10M in revenue" number WITHOUT factoring in any of this backlog, then this means that most likely HARDLY ANY of the JAN-FEB-MAR approved orders have gotten filled/shipped because Main Ave would have filled/shipped the backlog from Q4'14 first.

If this is the case, this is very very bad. As I discussed in the sticky post, seeing increasing backlog ALONG WITH increasing Deferred Revenue balances is a VERY BAD combination.

The second reason this is a problem is because if we are already able to account for this "nearly $10M in revenue" number, then this means that the diabetic supply program, even with nearly 1,000 enrollees, is bringing in immaterial revenues. If so, then this will end up being nothing more than another WRx side business contributing peanuts.

The addition of the pharmacies currently under Letter of Intent should help accelerate growth in our specialty pharmacy business.

Still in the LOI stage??? These small business acquisitions are not difficult to perform DD on and negotiate terms. Something does not smell right here. Shareholders should be aware of the possibility that this may end up being simply another "forward looking statement" that is used to generate hype and hope for newer and newer rounds of investors just like the promise of RapiMed... ..not to mention the fact that given the net loss for Q4'14 and revenue freefall in Q1'15, shareholders need to ask themselves where the money is coming from that SCRC would use to complete any acquisition?

Our Diabetic Supply Program is rapidly approaching 1,000 enrollees

I had targeted 1,000 enrollees by end-of-MAR, but expected this number to translate to meaningful revenues, but based on the analysis above re: the components of the "nearly $10M in revenue" number, it does not appear to be the case. Hopefully, the Q1'15 10Q will shed some more light on this segment...

we believe 2015 will be a tranformational year in which we build tremendous value for shareholders in ScripsAmerica."

Gregory FCA really needs to stop letting BS Schneiderman talk. For those shareholders and market observors over the past few years, this used-car salesman lingo only serves to remind folks of how insincere BS Schneiderman is in light of the fact that he said pretty much the same thing about 2013 and again about 2014...