The share price of MusclePharm Corp.’s (OTC: MSLP) stock most likely is headed back to the small bus to play in sub-penny land after today’s announcement. MusclePharm filed an 8-K with the SEC stating that their 10-K and 10-Q’s for all of 2011 were, for lack of a better word, misleading. MSLP had climbed well out of sub-penny land to nearly 4 cents at the beginning of April. This 8-K, once read completely, could provide a great entry level for MSLP stock for those who jump ship.
Looking for Hot Penny Stocks? Click here and get Alerts on Penny Stock Picks FREE.
MSLP Stock Chart:
The guidance indicates that, absent evidence of benefit to the vendor, appropriate treatment requires netting these types of payments against revenues and not expensing as advertising expense. MusclePharm also noted other credits and discounts that, upon further review, had been previously classified as advertising expense as a component of general and administrative expense that require a reallocation of presentation as amounts to be netted against revenues. MusclePharm’s net loss will not be affected by this reallocation in the statement of operations.
MusclePharm reviewed its accounting policies and procedures beginning in early May, 2012, and on May 14, 2012, determined that for all periods referenced above, the presentation of the statement of operations will need to be restated for these re-allocations and therefore should not be relied upon.
The Board has discussed the foregoing matters with MusclePharm’s independent registered public accounting firm and has authorized and directed the officers of MSLP to take the appropriate and necessary actions to restate its audited financial statements for the year ended December 31, 2011, and its unaudited financial statements for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011, respectively, by filing amendments as soon as practicable.
Bottom Line: The penny stock of MusclePharm, MSLP, is up 49.52% YTD and is still a great company and worth adding to the list of penny stocks to watch. Sales are increasing and, as stated in the 8-K, no affect will come to the bottom line meaning that the errors are in the classification of certain expenses.
Click To Follow Us:Share