A Catholic Reflects April 4, 2012 JEFFERSON AND JESUS Newsweek’s cover story: A celebration of Jesus’ teachings and a condemnation of modern religion — by a true believer. (I can;t say I fully followed the St. Francis of Assisi half of the piece, though he seems to have been one saint who would not have favored tax cuts for the rich or shock and awe for Iraq.) MISSING MONEY Andrea: “I thought you might want to let people know about missingmoney.com. It scans various state treasurer sites for notices of unclaimed property (not all states yet but most of them). LOSING MONEY: FCSC Doubled yesterday from its previous day plunge, though still 70% below what we first paid. Guru reports on their investor call: (1) The scary language in Friday’s 10k filing — “going concern,” “might be forced to file for bankruptcy” — can also be found in the 2011 10k and in fact back to the 2009 10k — all of which were issued before FCSC gained FDA approval. They have no plans to file for bankruptcy, but because of their precarious financial position, they are required to put in the language. (2) They are in discussions to raise more capital and expect to have an announcement in the next few weeks, but legally can say nothing more until then. (3) They gave out specific numbers for how many doctors have ordered and re-ordered Laviv so far and what their internal specific projections are in 2012 and 2013. For 2012, I calculate that their internal projections based on 4Q 2011 and 1Q 2012 should produce $4-$5 million in revenue. For 2013, they said they will be raising the price and expect revenue of $25 million and cash flow breakeven. As late as November 2011, Rodman & Renshaw’s analyst expected revenue of $18 million in 2012. I always thought that number was extremely ambitious. The current estimates look reasonable, based on their current experience. They indicated that they are currently at manufacturing capacity and one need for capital is to increase capacity to meet demand. (4) In their current FDA approved indication for wrinkles, their best market is in fine lines and wrinkles around the eye and lips, where botox and artificial fillers are contraindicated and no other alternative exists. (5) It would cost them about $4 million to repeat the very successful acne scar Phase III trial. They could then file for FDA approval next year and have the first product that actually improves acne scarring, a market with more than 15 million people whose only current treatment is laser (which doesn’t fill in a scar). Price would be the same as laser. Same doctors. Bottom line: FCSC is indeed in a precarious financial position (as they were a year ago) AND they have what appears to be a valuable asset. I assume that they will raise capital this year as they did last year. I can’t predict how quickly their sales will grow, but the product does look like it is gaining traction and it seems reasonable that there will be a key inflection point in the next 18 months. Like an idiot, I bought a little more. (What’s wrong with me?) Tomorrow: Bacon!