Proto Script Pharmaceutical Corp (OTCMKTS:PSCR) Could Be A Nice Promotional Play

Proto Script Pharmaceutical Corp (OTCMKTS:PSCR) has risen from $0.32 a share at the start of December to $1.62 a share at last close, a more than 400% gain across the period. There is a promotional campaign running in the background right now, and this is likely serving as the primary driver behind the company's upside momentum. As a strategy, getting in at the beginning of these promotional runs isn't a bad choice, but only if you get out ahead of the inevitable dump a little farther down the line. The important question is, of course, when will the peak come? The way we generally judge these ones is by looking at the product and the story that underpins it. If it's a very sellable story, then there's a good chance of a considerable upside run, and – in turn – plenty of time to jump in and out while logging some gains in the process.So, what's the story on this one?The company is a retailer and renter of what it calls durable medical equipment. This term is basically a fancy name for mobility scooters. It rents out mobility scooters to elderly individuals, and individuals who are unable to walk unaided for whatever reason, and – and here's the root of the story – does so through a range of government and large insurer contracts.Any company that has government contracts in place is an easy one to tout, and as such, Proto Script looks promising as a quick turnaround promotional play. At the beginning of this month, the company announced some fresh insight into its multiyear contracts with Medicare and Medicaid. These aren’t new contracts, they were initially awarded back in July 2016, but in light of the recent promotional activity, it is going to do the company some good to address them in some detail by way of a press release.Specifically, the release details the contract starting on July 1, 2016, and running through December 31, 2018, and allowing for the provision of specified items in certain product categories (read: mobility scooters of all shapes and sizes), for which Proto Script can (subsequent to provision) submit claims to Medicare for reimbursement. The release goes into detail about which products are included in the product countries, but it's not that interesting, and we won't go in to it here. It also highlights the regions within which the company is able to provide reimbursable products, listing a spate of cities and counties within California and Nevada.In addition to the operational update, Proto Script also just put out some unaudited financials, focusing on the third quarter of 2016. Again, these are a little late, but that they have fallen in line with the promotional activity is probably no coincidence. According to the release, for the quarter, top line sales increased by more than 75% against the year-earlier quarter, and the company generated a small net profit for the period. A look at the actual filing reveals sales of a little over $213,000 for the third quarter, and sales of $688,000 for the nine months to September 30, 2016. The above-mentioned net income for the third quarter? $149. Cash on hand as of September 30 came in at $5,700, so practically nonexistent, while liabilities totaled $291,000. Of this, a bank overdraft and a related party debt account for around $181,000.So what is our take?As we said earlier, a company with government contracts, and specifically with contracts that relate to Medicare and Medicaid, is an easy story to sell. As such, the promotional activity should have no problem running this one up considerably and – indeed – we have seen this happen over the last week or so. We expect more upside momentum midterm, and this should make for a decent opportunity to get in on a short-term promotional play. Scratch the surface, however, and the numbers that underpin this story aren’t particularly convincing. As such, this isn't one to get attached to long term.We will be updating our subscribers as soon as we know more. For the latest updates on PSCR, sign up below!Disclosure: We have no position in PSCR and have not been compensated for this article.