Fwhco: >With the new tax on medical machines set to kick in soon because of Obama-Care, I like the FPU program even more.<
Hi, fwhco, welcome.
For newbies to BSD Medical, “FPU” means “fee per use”. The MicroThermX (MTX-180) is small and light (40#) so a single unit is delivered as needed to various hospitals, by trained sales reps – and the fee charged is “very lucrative”. The CEO has said only three charges cover the mfg costs! They also offer the machine for outright sale and for regular leasing. The FPU plan is proving itself very attractive to hospitals in the present situation: a) widespread capital equipment buying freeze by hospitals and b) the MTX-180 being still in its introductory phase.
>My main reason is that there is no way to collect the Obama-Care tax. The tax is like a franchise fee as a percent of sales. The tax is diabolical, the more you increase the selling price, the more tax you pay. <
Additional cost, yes – but levied more-or-less equally on all competitors, so not really onerous to them. Right?
>With FPU, BSD M. could build an installed base of MicroThermX’s and reap significantly more profit. This will take more time and additional capital to build the base, but it will benefit both BSD M. and the distributors.<
BSD Medical is presently offering all these options: outright buying, leasing, and FPU. An installed base of machines owned by BSD M. for FPU is certainly another possibility, but my guess is that BSD M. would prefer not to spend the additional capital needed – they have more important uses for their capital.
In the present situation, BSD M gets a very lucrative fee, while needing only a moderate outlay (very soon covered) for a minimal number of machines. AND, the hospitals have (as usage builds) incentive to buy a unit early (so they could offer cheaper service while also improving their profits – for a while, anyway).
Whatever is the case, the game is on! And BSD M is rapidly heading for, first, positive cash flow, then, profits! I think they have probably already achieved positive cash flow, and the very sizable markets, now “cracked”, should provide overall profits soon (as we speak?). |
