The undertones of short sentiment are littered throughout this article and sadly most of the statements you make are false. Just to run through a few:
1. R&D in 2010 was $1.3M (look at page 20 of the 2011 10-k) and I’d expect it to be a lot higher again in 2013 with the new Assault formula. Comparing R&D at this company to a drug developer is laughable. They aren’t creating new drugs, merely changing formulas with already developed supplements. Do you really expect millions in R&D for this?
2. Employment agreements were last amended January 4, 2013 and base pay ranges from $200k - $250k with any increases only coming at the approval of the Compensation Committee, which you also fail to point out as a recent company change. I would suggest you read the S-1 filed in August to learn the basics of company’s operations.
3. “Off balance sheet operating leases” is referring to real estate leases I assume. What company ever brings the lease of office/warehouse space onto their books? This is not sham accounting, it is accounting 101 actually. Please learn that before you ask the company to book liabilities relating to real estate leases. This is also fully disclosed according to GAAP in their financials.
4. Regarding CF from Operations, the company had CFO of about ($1M) in 2012 and could actually have CFO of ($2M) to $2M for 2013. Nowhere near the ~($11M) you are spouting. I’d expect the company to end the year with $10M to $14M in cash, versus $0 in 2012, which should put them in a good position going forward. The acquisition of BZNE manufacturing assets could alter these assumptions, but I have nothing to lead me to believe that as of now.
5. My biggest issue is in your portrayal of management’s past issues, which are mostly corrected through the hiring of numerous outsiders and the separation from the old insiders. Are you really going to look at consulting contracts from 2009-2011 that have been terminated for guidance for the future without really discussing any reme