Muscle Pharm Corporation (MSLPQ)

[jeff_green]

The $8m Line of Credit covenants state that the balance must be paid down to $3m for a period of days every quarter. That would require more than $5m of free cash to meet the covenant.

The $4m emergency collateral loan that encumbered 100% of MSLP assets restricts any further borrowing from any source until that note is cured, so more than another $4m in free cash is required to open the possibility of any new borrowings.

Of course the interest carrying costs are a drain too.

If MSLP found $10m cash under the bench press at the MPSSI, it wouldn't solve any cash on hand problems. MSLP has taken on the toxic debt and is restricted from new borrowings and is losing money hand over fist on the revenues.