Muscle Pharm Corporation (MSLPQ)

[justlovethegame]

From a purely theoretical point of view I do not disagree with anything you are saying. If your estimated costs of future expansion are purely based on historical calculations. This leaves a large potential for your prediction of being cash flow positive to be farther down the revenue road. I think it can be said that everyone agrees that growth is spectacular. That has a definite effect on the costs of the build out. If it doesn't the stock should be .08-.10 currently even with general lack of confidence.

Thanks, justlovethegame for your insights. Musclepharm needs some secured bank line of credit to support their working capital needs, but I doubt given their low gross margin and strategy of growing the business through lavish marketing campaign and giving away so much in free stuffs would discourage any financial institution to entertain them. Unless they address the liquidity constraint they are facing now through cost cutting and growing revenue in a more profitable way, it is difficult for them to add any value to shareholders. They have to reach a sales base at which they become cash flow neutral. From their Q1-12 revenue, I estimate they can be cash flow neutral at $80 million sales-bases. Everything on top of that will add value to owners and increase the sp. Until then, the company shares will be traded at a discount to sales/share. However, given their limitations, I believe they still can save a couple of millions/year by cutting unnecessary G & A expenses and improve the bottom line right now and grow the business in a more sustainable way. JMO