To elaborate more on my earlier post, let's compare a few of the company's fundamentals as we known them today versus where Scrips was on or about 12/2/13 (the date on which it hit the pause button to prepare its Q&A).
Revenues -- On 12/2/13, the company potentially had five revenue streams: WholesaleRx, PIMD, DLA, RapiMed China, and RapiMed US. Honestly, I am not quite sure what the monthly revenues were from the DLA stream and, so, I will not consider them for this simple analysis. So at the time, WholesaleRx was generating about $123,390 in monthly revenues (I took the average of the October and November revenues). And, yes, I understand Scrips receives only 20% of the WRx profits. So, please, do not respond to say, "aha, you're trying to trick everyone." For this exercise, only revenues matters.
Today, Scrips has seven potential revenue streams (the same five it had on 12/2/13, as well as the NJ compounding pharmacy management agreement and RapiMed Hong Kong). Still without a class 2 DEA license to sell and distribute controlled substances, the WholesaleRX revenues increased by over 117% to $268,696. At this time, it does not appear that PIMD is earning revenues, but it must be getting close. But for now, it's a $0 as far as we know. Another $0 that appears to be getting very close is the RapiMed Hong Kong revenue stream, as well as RapiMed China. And of course, RapiMed US is not yet in play. The new surprise is the compounding pharmacy business, which appears to have come out of the gate strong with early indications that the monthly revenues will be about $308,750 ($57K / 4 X 5 X 52 / 12). To that end, it appears the current monthly revenue stream is about $577,446 ($6.9M annual run rate). This current revenue stream is about a $454,056 increase over the revenues reported merely 3 months ago (a quite impressive 368% increase).
Unfriendly Convertible Debt -- On 12/2/13, Scrips told us it had about $956K in toxic convertible debt that was not in "friendly hands." Today, we know the company has written no more of these toxic notes since 10/22 and will not write more such notes: "Moving forward we will not add any more of this type of debt to our balance sheet as we are experiencing growth in our existing areas of business and expect increased revenue based on new ventures and products. ScripsAmerica will continue to prepay our existing notes prior to their conversion date as funds permit." That this company will either pay off or absorb $956K in toxic debt in about 4 to 5 five months is just as impressive as the triple-digit revenue growth (I know, I know, I should not include everything, but I need to leave you guys something to attack). The next section is why I am ignoring the "percentage of revenues" debate...
Monthly Cash Burn -- On 12/2/13, Scrips reported a $110,000 monthly cash burn. Though we do not know what the company's current cash burn is, we do know the company must receive some percentage of the extra $454K in revenues from the WRx and CP operations. At the very least, I would speculate that the company's monthly cash burn is significantly less than $110K. And considering the company added the CP business and started prepaying the convertible notes, is it unreasonable to at least assume the company's fundamentals are vastly improved since 12/2/13? Indeed, in my strong opinion, the current fundamentals clearly demonstrate a company that is significantly undervalued at its current price.
I am confident that Scrips is on the verge of knocking it out of the park. The signs are there for all of us to see; this OTC company is one of the rare ones; it will bust out of pennyland and find itself one day listed on the Nasdaq. The good news for the skeptics, however, is with the current noteholders and Ironridge selling their remaining inventory, the pps might stay in this very low range for at least another week or two, giving everyone a chance to invest in this little gem at a very steep discount.
Revenues -- On 12/2/13, the company potentially had five revenue streams: WholesaleRx, PIMD, DLA, RapiMed China, and RapiMed US. Honestly, I am not quite sure what the monthly revenues were from the DLA stream and, so, I will not consider them for this simple analysis. So at the time, WholesaleRx was generating about $123,390 in monthly revenues (I took the average of the October and November revenues). And, yes, I understand Scrips receives only 20% of the WRx profits. So, please, do not respond to say, "aha, you're trying to trick everyone." For this exercise, only revenues matters.
Today, Scrips has seven potential revenue streams (the same five it had on 12/2/13, as well as the NJ compounding pharmacy management agreement and RapiMed Hong Kong). Still without a class 2 DEA license to sell and distribute controlled substances, the WholesaleRX revenues increased by over 117% to $268,696. At this time, it does not appear that PIMD is earning revenues, but it must be getting close. But for now, it's a $0 as far as we know. Another $0 that appears to be getting very close is the RapiMed Hong Kong revenue stream, as well as RapiMed China. And of course, RapiMed US is not yet in play. The new surprise is the compounding pharmacy business, which appears to have come out of the gate strong with early indications that the monthly revenues will be about $308,750 ($57K / 4 X 5 X 52 / 12). To that end, it appears the current monthly revenue stream is about $577,446 ($6.9M annual run rate). This current revenue stream is about a $454,056 increase over the revenues reported merely 3 months ago (a quite impressive 368% increase).
Unfriendly Convertible Debt -- On 12/2/13, Scrips told us it had about $956K in toxic convertible debt that was not in "friendly hands." Today, we know the company has written no more of these toxic notes since 10/22 and will not write more such notes: "Moving forward we will not add any more of this type of debt to our balance sheet as we are experiencing growth in our existing areas of business and expect increased revenue based on new ventures and products. ScripsAmerica will continue to prepay our existing notes prior to their conversion date as funds permit." That this company will either pay off or absorb $956K in toxic debt in about 4 to 5 five months is just as impressive as the triple-digit revenue growth (I know, I know, I should not include everything, but I need to leave you guys something to attack). The next section is why I am ignoring the "percentage of revenues" debate...
Monthly Cash Burn -- On 12/2/13, Scrips reported a $110,000 monthly cash burn. Though we do not know what the company's current cash burn is, we do know the company must receive some percentage of the extra $454K in revenues from the WRx and CP operations. At the very least, I would speculate that the company's monthly cash burn is significantly less than $110K. And considering the company added the CP business and started prepaying the convertible notes, is it unreasonable to at least assume the company's fundamentals are vastly improved since 12/2/13? Indeed, in my strong opinion, the current fundamentals clearly demonstrate a company that is significantly undervalued at its current price.
I am confident that Scrips is on the verge of knocking it out of the park. The signs are there for all of us to see; this OTC company is one of the rare ones; it will bust out of pennyland and find itself one day listed on the Nasdaq. The good news for the skeptics, however, is with the current noteholders and Ironridge selling their remaining inventory, the pps might stay in this very low range for at least another week or two, giving everyone a chance to invest in this little gem at a very steep discount.
