ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

No financials still, If as suggested the financials are fkd up what happen to the LOC... Still based on the same criteria/withdrawn??

As discussed previously, based on the disclosures that were filed at the time the LOC was PR'd, this LOC is a very plain vanilla revolving LOC. The terms that had been disclosed heavily favor the financier (Triumph) and Triumph is very well protected in the event of default. As with most LOC's of this nature, very little DD needs to be done. Once Triumph verified that Main Ave was indeed a bona fide pharmacy under agreement with major insurance companies, there was really no other DD necessary.

The terms of the LOC stipulate that although the MAXIMUM amount is $4M, that the ACTUAL amount that SCRC could ever touch was limited to 85% of Main Ave's A/R balance. And as we have seen, with Main Ave's approved orders falling off a cliff, A/R is also dropping like a rock as well -- and so as A/R falls, the amount of the LOC SCRC can tap into and draw down on falls as well.

In addition, the terms of the LOC clearly stipulate that should SCRC default, that Triumph can garnish the A/R (which typically means that Triumph can step in and direct the insurance companies to send the payments for the Rx's to Triumph instead of SCRC). And if the A/R garnishment is not sufficient, Triumph has the right to seize other SCRC assets.

In its simplest terms, Triumph is in a position not too different than Ironridge when Ironridge financed SCRC in the sense that if SCRC defaults like how SCRC defaulted with Ironridge, Triumph has many outs to either seize and sell SCRC assets and/or pursue SCRC in litigation, in which case the trial will be as black and white as it was with Ironridge and SCRC will be forced by the courts to pay even more to Triumph to cover not only the principal outstanding but also continuing interest, court fees (their own plus Triumph's), legal fees (their own plus Triumph's), and also punitive damages should Triumph request it and the court deem it appropriate.