These past several months have given us a chance to review our business and make somechanges, which we believe will make
We have strengthened our financial position considerably by bringing in new capital and restructuring our balance sheet. A lead investor provided us with
As described in our most recent annual report filed on Form 10-K, management has decided to concentrate our working capital on the Company's operations and support our two remaining pharmacies with optimal prospects. After analyzing historical financial performance, regulatory costs, current sales prospects, geographic and physical location and strength of existing physician relationships, management elected to close the Gresham and
Following the closures of the Gresham and
We are focused on reaching profitability in 2014 and believe that concentrating our working capital in our
The foundation for our plan to increase sales at our existing two pharmacies is based on expanding our outreach program to physicians, including more effectively communicating to them the risk management and service benefits that our business model provides compared to a general pharmacy and increasing our customer retention rate. We believe that increasing our inventory levels and expanding our purchasing capacity with existing and new drug suppliers can strengthen our customer retention rates. Since the majority of our pharmacies' operating expenses are fixed expenses, we expect any increase in revenue to have a positive impact on our consolidated operating results. Management believes that the infrastructure of our existing pharmacies can support an increased prescription production volume by as much as an additional 75% to 100% without incurring any significant additional operating expenses, but there can be no assurances in this regard.
Our longer-term plan remains focused on developing a national footprint as a premier provider of pharmacy services to physicians and patients primarily in the treatment of chronic pain and other chronic medical conditions that require treatment utilizing controlled medications. Prescription drug abuse and diversion have resulted in ever increasing regulations. Our business model provides pharmacy services, which are typically utilized by physicians for the risk management benefits. We have developed and refined what we believe is a unique pharmacy service model for the dispensing of controlled medications that is capable of being scaled into a national chain.
We believe that our current corporate infrastructure can efficiently support up to total of twelve operating pharmacies. Corporate infrastructure includes executive management, centralized support services, accounting, finance, information systems, human resources, payroll and compliance to support each pharmacy's operations. In order to align the costs of our current corporate infrastructure with our scaled back operations, management has implemented cost reduction initiatives including staffing reductions, deferral of senior management compensation and reduced operating costs at our two remaining pharmacies. As a result, we believe that the implementation of our plan to open up to ten additional pharmacies will not require material additional corporate infrastructure. Further, management believes that opening each new pharmacy will have a positive impact on our consolidated operating results within six months from opening of the new pharmacy, but there can be no assurance that such positive results will occur.
The past several months have posed some challenges for the Company that have largely been overcome. With our corporate repositioning predominantly behind us, an experienced management team in place, and significant opportunities on the horizon for our business, we are eager to execute our plans over the next few months.
Please stay tuned for future announcements from
Chief Executive Officer
Forward-Looking Statements. This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "prospects," "outlook," and similar words or expressions, or future or conditional verbs such as "will," "should," "would," "may," and "could" are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any anticipated results, performance or achievements. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company's forward-looking statements, please see the Company's Annual Report on Form 10-K for the year ended