Replies to post #17745 on Praxsyn Corp (PXYN)

[buckyboy]

" #2 priority should be to replace Ed Kurtz as interim CEO and find someone capable of administering a publicly traded company."

Totally agree. PXYN Shareholders currently have a cardboard cut out "robo signer" for SEC filings who hides behind his Attorney's skirt.....................

[mayerxx]

Just watch......soon they receive big buyout offers from established companies that already have the proper infrastructures in place such as factoring, collections, and management.

[Rhenarium]

A couple of points:

1) First of all, an apology - based upon the language in the lastest 10Q, it sounds like your take on factoring (i.e., PXYN receives 20% immediately, and possibly more later depending on the factor's success in collecting on the A/R) was correct. It boggles my mind that PXYN failed to mention this fact in earlier 10Qs.

2) Obviously, the fact that PXYN COULD receive additional monies doesn't mean that it WILL. If it DOES, however - and particularly if they ultimately get anywhere close to 35% of gross billings - the whole factoring thing becomes more of a temporary nuisance that will eventually work itself out than a serious threat to the company's existence. They were profitable last qtr while factoring all their receivables, and they reduced debt by a substantial amount. All else being equal, one would expect the current level of gross billings to yield a profit of at least $3M in Q4 given the end of stock grants to TPS and reduced interest costs. So it would seem PXYN could limp along profitably even in the absence of any change in the factoring situation. But things WOULD eventually change - DRAMATICALLY - if they eventually get what I'll call (for lack of a better term) "kickbacks" from the factor. Each quarter in which they factor $40M of gross billings would add as much as $6M ($40M * 15%) in deferred revenue that they might receive down the road. AND each quarter that passes puts them 3 months closer to the beginning of these "kickbacks" - which, once they start, would presumably flow in on an ongoing basis. They're probably about halfway through the 18-month "holding" period for receivables factored in Q1.

3) I don't think conventional financing is going to happen. Investors look at a company's future prospects, but banks look at its current financial state. And given PXYN's current financial state, no bank is going to offer it conventional financing on anything other than usurious terms. So I don't think criticism of Kurtz for failing to "fix" the factoring situation yet is valid.

I see three possible resolutions to the factoring situation:

1) Best case: TPS proves itself to be a true partner and basically says "start collecting all A/R in house and pay me when you can".

2) Next-best case: In approximately 9 months, PXYN starts receiving "kickbacks" from the factor to the tune of several million dollars per quarter.

3) Worst case: TPS offers no relief and significant "kickbacks" from the factor never materialize. I don't think PXYN will be able to obtain conventional financing, so it slowly addresses the factoring situation as best it can - i.e., it starts keeping the "best" A/R in house immediately and gradually increases the percentage that is collected in house as it's cash situation slowly improves.

[Lighthouse]

A few questions for you CD and a few comments... although you seem to post on a negative slant and I post on a positive, we can agree that this company is heading in a positive direction....

when you posted this yesterday, you forgot some...

There are currently $3M in 2012 convertible promisary notes, convertible on the second anniversary if the note (second half of 2014). During the three months ended September 30, 2014, notes in this category with a face value of $2,820,575 became convertible.

This is also in the same paragraph..."One of these notes was issued to a related party, a relative of the founder of the PDC control group"

Question... In 2012, a very small group of investors knew about PDC and were involved... do you really think they wish to dilute their investment with what is already here (profits) and what they know is coming??? btw likely a relative of one of these

PDC EXECUTIVE

Andrew Do
Chief Executive Officer

Bud Birch
Controller

Mr. Edward F. Kurtz
Chief Operating Officer
Age: 52

Mr. John Garbino
National Sales Director
Age: 43

Next you question Ed's abilities as a CEO... my comment would be, although I do not personally know the man, he was hand picked by a group to start some Pharmacies in 2007 and he took them through the start of 2 and the purchase of 3 Mesa pharmacies and now has taken them through the public process, increased sales like crazy and has put a profitable company together in a short period of time. Always remembering we are an OTC company in which net profits almost don't exist.

I do agree that a CFO is needed and I can't imagine that isn't in the works currently.

As far as them going much more profitable in Q4.... I'm not sure what you were reading in the Q as it clearly states that over $11 million was spent to tps shares. As we know this share issuance is now complete and this alone added to the bottom line in Q4 would take them to a major step up in bottom line profits.

Its the reason sales and marketing went from Q2 = $12.7 Million to Q3 = $9 Million a reduction of $3.7 million due to tps share issuance completion part way through the Quarter.

Now, I would not be surprised if Ed used this money to finance in house collections and continue to get that ball rolling which would be a fiscally responsible way thing to do.

Next question... Only $40 million of the $49 million in gross sales was factored... what happened to the rest.... my guess is that they are in house collecting it??? what's your take on the missing $9 million for Q3

You treat this company as a big board stock fundamentally and they aren't quit there yet and thus the OTC status. As profits grow and shares are reduced, fundamentals will become more of the story but not now...not yet...

BTW, good luck getting your position back :)