Replies to post #15854 on ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

Alleyba says............................

............that today's news shows that SCRC id hunting for more . revenue streams. I do not see that this company was acquired by toxic paper,

What in the world are you talking about??? The PR never stated anything about any acquisition. All this arrangement is is for SCRC to manage this local compound pharmacy for a cut of their revenues.

All that happened was that this local compound pharmacy decided that it would be more cost-effective for them to outsource the day-to-day management of this facility to SCRC than if they were to continue managing it themselves.

Although no specific terms have been disclosed, all we know is that SCRC now gets a percentage of their revenues as their payment for providing this management service.

This is a gamble that SCRC is taking by structuring the compensation terms in this manner. So long as revenues NEVER decline, then this could work out in SCRC's favor in the long run. But the risk exists that if revenues decline or do not consistently reach a certain threshold level, then SCRC could end up receiving less than market value for the nature of the mgmt services they are providing.

This is why most outsourcing agreements such as this typically involve a base + percentage component for determining what the mgmt fees should be. This way, even if revenues decline, the mgmt service provider still guarantees itself a fixed minimally acceptable amount of fee revenue each month and is not caught with its pants down should something unexpeted happen, such as: product contamination/recall; new competing product arrives on the market; issues with sourcing of raw materials; etc, etc, etc...