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Muscle Pharm Corp. Message Board

  • mvanderventer mvanderventer Nov 20, 2013 1:53 PM Flag


    why the not-so-slow bleed?

    Sentiment: Buy

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    • Because the company is bleeding money. Until they get expenses under control and show a path to positive cash flow, investors will wait.

      • 1 Reply to undiscovrdstk
      • Hmmmm.....Well, that sounds like it COULD be the explanation...but it only makes sense if the path to positive cash flow is either difficult to see - or non-existent. I don't think either really applies here.

        The net loss for Q3 was 3,945,836. Of that, however, 3,991,339 was non-cash expenses that has absolutely nothing to do with "real" cash flow (3,553,023 for amortization of stock given to Arnold, management, and directors; 178,316 for depreciation; and 260,000 for "non-cash legal settlement expense". There was also a non-cash "legal fee accrual" for 250,000. This is a little different as this may / probably will turn into a "real" cash expense at some point. Back out the 3,991,339 portion of th e non-cash expenses and you arrive at postive cash flow of 45,503.

        They also had "Total other income" of $926,944. Some portion of this - possibly all - is non-cash income that ALSO has absolutely nothing to do with "real" cash flow. If it is all non-cash income, then we're at negative cash flow of roughly $875,000.

        There was a one-time hit of $1.88M in additional discounts and sales allowances to close out the old Assault product line, and advertising was by by $0.77M over Q2. The sum of these two items is $2.65M. The Assault discounts will presumably be absent in Q4, and MSLP obviously chooses what to spend on advertising. Meanwhile, sales will presumably be up by several million in Q4 due to Arnold and Costco. And by several million in Q1 due to Walgreens. So it's not like the path to positive cash flow is incredibly obvious.

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