Main Ave Pharmacy, Inc. (MAvP) Disclosure on p. 13 of Q1 10Q:
On January 29, 2014, Implex Corporation, which is owned by our legal counsel and related party, Richard C. Fox, entered into a stock purchase agreement to acquire from its owner the specialty pharmacy Main Avenue Pharmacy, Inc.(“MAvP” or “Main Avenue Pharmacy”), located in Clifton, New Jersey, for $550,000. The purchase price will be paid in installments and the shares will be held by an escrow agent until the final payment is made. Under the purchase agreement, the final payment is to be made on July 11, 2014 (unless extended by the parties). Since ScripsAmerica will have significant controlling interest via related party relationships and will be the primary beneficiary, the Company will consolidate financial activities of Main Avenue Pharmacy, Inc.
Under the purchase agreement with the owner of Main Avenue Pharmacy, Implex acquired the workforce (3 employees) and the applicable state pharmacy licenses but the purchase did not include cash, receivables or any existing customer lists of the owner. It also excluded any existing liabilities prior to January 29, 2014. The total purchase price of $550,000 was preliminarily allocated to intangible assets based on the estimated fair value of intangible assets. The Company is currently in the process of obtaining an independent valuation and upon completion, the purchase price will be allocated to the identifiable assets acquired which may require modification to the preliminary allocation. Excess purchase consideration, if any, will be allocated to goodwill. All other tangible assets acquired had no significant fair value. The preliminary allocation assumes the intangible assets are indefinite lived. This estimate may be modified upon the completion of the independent valuation. Intangible assets with indefinite lives are not amortized; however, they are tested annually for impairment and written down to fair value as required.
The payment of the purchase price of $550,000 is as follows: The initial installment payment of $475,000 was made via a $175,000 payment directly from ScripsAmerica on Implex’s behalf and $300,000 in borrowings obtained by Implex, $250,000 from a current stockholder and $50,000 from a related party (See note 9 for note details). A $60,000 installment payment will be made in second quarter 2014 and the final payment of $15,000 is to be made on July 11, 2014 (unless extended by the parties). This $75,000 of payments to be made has been accrued in the accrued liabilities in the condensed consolidated balance sheet as of March 31, 2014. MAvP is specialty pharmacy which is license to prepare and fill prescription via a topical cream format versus pill format. MAvP was basically a dormant business and had no significant sales in 2014; we acquired the Company for its Pharmacist and license. Since ScripsAmerica will have significant controlling interest via related party relationships and will be the primary beneficiary, the Company will consolidate financial activities of Main Avenue Pharmacy.
I do not know about the rest of you, but the section that I highlighted should answer many questions about this deal and how much money MAvP was generating before Team Scrips stepped in to "manage" this business. I also gave particular emphasis to the word "acquired"...now let there be no doubt in our minds why SCRC receives virtually all of the specialty pharmacy's revenues. Great acquisition, Bob!
On January 29, 2014, Implex Corporation, which is owned by our legal counsel and related party, Richard C. Fox, entered into a stock purchase agreement to acquire from its owner the specialty pharmacy Main Avenue Pharmacy, Inc.(“MAvP” or “Main Avenue Pharmacy”), located in Clifton, New Jersey, for $550,000. The purchase price will be paid in installments and the shares will be held by an escrow agent until the final payment is made. Under the purchase agreement, the final payment is to be made on July 11, 2014 (unless extended by the parties). Since ScripsAmerica will have significant controlling interest via related party relationships and will be the primary beneficiary, the Company will consolidate financial activities of Main Avenue Pharmacy, Inc.
Under the purchase agreement with the owner of Main Avenue Pharmacy, Implex acquired the workforce (3 employees) and the applicable state pharmacy licenses but the purchase did not include cash, receivables or any existing customer lists of the owner. It also excluded any existing liabilities prior to January 29, 2014. The total purchase price of $550,000 was preliminarily allocated to intangible assets based on the estimated fair value of intangible assets. The Company is currently in the process of obtaining an independent valuation and upon completion, the purchase price will be allocated to the identifiable assets acquired which may require modification to the preliminary allocation. Excess purchase consideration, if any, will be allocated to goodwill. All other tangible assets acquired had no significant fair value. The preliminary allocation assumes the intangible assets are indefinite lived. This estimate may be modified upon the completion of the independent valuation. Intangible assets with indefinite lives are not amortized; however, they are tested annually for impairment and written down to fair value as required.
The payment of the purchase price of $550,000 is as follows: The initial installment payment of $475,000 was made via a $175,000 payment directly from ScripsAmerica on Implex’s behalf and $300,000 in borrowings obtained by Implex, $250,000 from a current stockholder and $50,000 from a related party (See note 9 for note details). A $60,000 installment payment will be made in second quarter 2014 and the final payment of $15,000 is to be made on July 11, 2014 (unless extended by the parties). This $75,000 of payments to be made has been accrued in the accrued liabilities in the condensed consolidated balance sheet as of March 31, 2014. MAvP is specialty pharmacy which is license to prepare and fill prescription via a topical cream format versus pill format. MAvP was basically a dormant business and had no significant sales in 2014; we acquired the Company for its Pharmacist and license. Since ScripsAmerica will have significant controlling interest via related party relationships and will be the primary beneficiary, the Company will consolidate financial activities of Main Avenue Pharmacy.
I do not know about the rest of you, but the section that I highlighted should answer many questions about this deal and how much money MAvP was generating before Team Scrips stepped in to "manage" this business. I also gave particular emphasis to the word "acquired"...now let there be no doubt in our minds why SCRC receives virtually all of the specialty pharmacy's revenues. Great acquisition, Bob!
