Replies to post #268884 on Innovation Pharmaceuticals Inc (IPIX)

[loanranger]

"Again, my understanding is only the money’s actually received would need reporting and then on the balance sheet."

You're discussing the accounting for the upfront payment and the following is intended to flesh that out a bit. I'm providing the boring detail of it ASSUMING the Company itself doesn't put something out that comes out and says what the upfront payment is ahead of the 9/30 10Q in November. If you expect them to do so you probably shouldn't waste your time reading any further.

I'm sure you know that they have to file a CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS in the 10Q as well. That's the thing that has said "Revenues $ - " on it since the Company's inception".

You're absolutely right in saying that only the money’s actually received would need reporting and that is expected to occur in the current quarter (ended 9/30). And I'm sure you know that the basic requirements of accounting say that for every debit there must be an equal credit...it's a simple balancing act.

The debit is the cash amount. We would hope and expect on 9/30 that the Company will have a Cash balance, but whatever it is we won't know from it alone what the upfront payment was.
The credit is a little more complicated. They could consider it revenue, in which case it would appear as Revenues on the Statement of Operations. Or they might consider (I wouldn't expect them to) that the revenues shouldn't be recognized for some reason (without the Exhibit describing the Initial Payment we don't know if it is/was contingent on anything) in which case it could appear on the Balance Sheet as Deferred Revenues. Since the Company has never received ANY Revenue or Deferred Revenue in the past the upfront payment will be very easy to identify from one of those Statements whether it is described in the text or not (although it obviously should be).

Hopefully the Company won't make investors wait until mid-November. At that point the latest MFO Agreement and the funds it provides will expire.
As has been mentioned, the upfront payment could also come up in the context of the Going Concern section of the 10-K at the end of September. OR it could be detailed in the Subsequent Events section. Or both. AT SOME POINT it will be revealed.