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Muscle Pharm Corp. Message Board

  • dillondogfu dillondogfu May 16, 2012 5:39 PM Flag

    New Report Out

    Did anyone see that they are restating numbers? Yep.

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    • I used to own a sports product & marketing company. When we originally did our accounting (as young excited entrepreneurs), we wanted to know how much product we gave away for promotional reasons. We gave away stuff at trade shows, and at events and the like. As it turned out (in order to prepare audited financials purposes hence "go public"), we had to go back multiple years and refile all promo give aways as sales (local tax implications also), and move the expense from advertising over to sales at cost, even though no cash was realized. Then we made invoices (expensed on behalf of the would be customers) for the sponsored athletes for their marketing & promotional services at the exact same total amounts for what the cost of the promo product was. This is all because of how unproductive white collar & government accountants have become vs just getting things done the way a dictator would want it. Personally, I don't want my promo products mixed in with all the other sales paid in full cash. Government wants their tax money is the other side.

      Net effect was about $800 in book keeping and accounting costs for each Q period. Maybe $5 to $10 grand for a company this size.

      The issue has been dealt with, and I'm glad they went back and straightened things. No big deal, but for future same-same comparing it will be good because it likely will have one positive... expanding gross margins.

      You get zero margin when letting go of promo products at your cost in a non cash transaction.

      In future the fast growing cash sales will allow margin expansion.

      best part is to avoid any future IRS action in the event MSLP gets "well-known" - the IRS always comes knocking

    • it won't change sales, guidance, or net loss numbers

      some revenues get moved to marketing & advertising, and some some other expensed category (probably their sponsored atheletes who get given product for their support in sales growth) gets moved to revenues

      refiling previous periods means they are serious going forward

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