UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
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x
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Preliminary Information Statement
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Confidential, for use of
the Commission only (as permitted by Rule 14c-5(d)(2))
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Definitive Information Statement
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MUSCLEPHARM CORPORATION
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(Name of Registrant As Specified In Charter)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No:
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Date Filed:
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THIS INFORMATION STATEMENT IS BEING PROVIDED
TO
YOU BY THE BOARD OF DIRECTORS OF MUSCLEPHARM
CORPORATION
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
MUSCLEPHARM CORPORATION
4721 Ironton Street, Building A
Denver, Colorado 90839
(303) 396-6100
INFORMATION STATEMENT
(Preliminary)
January 30, 2012
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
GENERAL INFORMATION
To the Holders of Common Stock of MusclePharm
Corporation:
This Information Statement has been filed with
the Securities and Exchange Commission and is being furnished, pursuant to Section 14C of the Securities Exchange Act of 1934,
as amended (the “
Exchange Act
”), to the holders (the “
Stockholders
”) of common stock, par
value $0.001 per share (the “
Common Stock
”), of MusclePharm Corporation, a Nevada corporation (the “
Company
”),
to notify such Stockholders that on January 26, 2012, the Company received a unanimous written consent in lieu of a meeting of
the holders of Series B Preferred Stock, par value $0.001 per share (the “
Series B Preferred
”). Each share of
Series B Preferred has the equivalent of approximately 12,564,720 votes of Common Stock (based upon the outstanding number of Common
Stock issued at the time hereof). Currently, there are two holders of Series B Preferred (together, the “
Series B Stockholders
”),
together holding fifty-one (51) shares of Series B Preferred, resulting in the Series B Stockholders holding in the aggregate approximately
50.9989% of the total voting power of all issued and outstanding voting capital of the Company (the “
Majority Stockholders
”).
The Series B Stockholders authorized the following:
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The increase in the number
of authorized shares of Common Stock from one billion (1,000,000,000) shares of Common Stock to two billion five hundred million
(2,500,000,000) shares of Common Stock (the “
Authorized Share Increase
”).
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On January 26, 2012, the Board of Directors
of the Company (the “
Board
”) approved the Authorized Share Increase, and recommended the Authorized Share Increase
for approval to the holders having the power to vote with respect to the Common Stock. On January 26, 2012, the Majority Stockholders
approved the Authorized Share Increase by written consent in lieu of a meeting in accordance with Nevada law. Accordingly,
your consent is not required and is not being solicited in connection with the approval of the Authorized Share Increase.
We will mail the Notice to the Stockholders
on or about February 10, 2012.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND A PROXY.
The Board believes the Authorized Share Increase
is necessary and advisable in order to maintain the Company’s financing and capital raising ability and to generally maintain
our flexibility in today’s competitive and rapidly changing environment.
Accordingly, it was the Board’s opinion
that the Authorized Share Increase would better position the Company to attract potential business candidates and provide the Stockholders
a greater potential return.
INTRODUCTION
Nevada law provides that the written consent
of the holders of outstanding shares of voting capital stock having not less than the minimum number of votes which would be necessary
to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted can approve an
action in lieu of conducting a special stockholders' meeting convened for the specific purpose of such action. Nevada law, however,
requires that in the event an action is approved by written consent, a Company must provide prompt notice of the taking of any
corporate action without a meeting to the stockholders of record who have not consented in writing to such action and who, if the
action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been
the date that written consents signed by a sufficient number of holders to take the action were delivered to a company.
In accordance with the foregoing, we will mail
the Notice to the Stockholders on or about February 10, 2012.
This Information Statement contains a brief
summary of the material aspects of the Authorized Share Increase approved by the Board of Directors (the “
Board
”)
of MusclePharm Corporation (the “
Company
,” “
we
,” “
our
,” or “
us
”)
and the holders of Series B Preferred Stock (the “
Series B Preferred
”), which have voting rights with respect
to the Common Stock and constitute a majority of the voting power of the Common Stock.
Series B Preferred
By unanimous written consent of the Board (as
permitted under Nevada law), the designation, rights, preferences and privileges of the Series B Preferred were established by
the Board (as is permitted under Nevada law and by the Certificate of Incorporation, as amended, of the Company). The designation,
rights, preferences and privileges that the Board established for the Series B Preferred is set forth in a Certificate of Designation
that was filed with the Secretary of State of the State of Nevada on August 12, 2011. Among other things, the Certificate of Designation
provides that each one share of Series B Preferred (the “
Series B Stockholders
”) has voting rights equal to
(x) 0.019607
multiplied by
the total issued and outstanding Common Stock eligible to vote at the time of the respective
vote (the “Numerator”),
divided by
(y) 0.49,
minus
(z) the Numerator.
By unanimous written consent of the Board,
the Board issued fifty-one (51) shares of Series B Preferred to each of two persons
(together, the “
Series B Stockholders
”).
As a result of the voting rights granted to the Series B Preferred, the Series B Stockholders hold in the aggregate approximately
50.9989% of the total voting power of all issued and outstanding voting capital of the Company.
As of January 30, 2012, there were issued and
outstanding (i) 615,697,765 shares of our Common Stock, (ii) zero shares of our Series A Convertible Preferred Stock, and (iii)
fifty-one (51) shares of our Series B Preferred. Based on the foregoing, the total aggregate amount of votes entitled to vote regarding
the approval of the Authorized Share Increase is approximately 1,256,498,485 (the sum of the votes represented by the issued and
outstanding shares of Common Stock and Series B Preferred). Pursuant to Nevada law, at least a majority of the voting equity of
the Company, or at least 628,249,243 votes, are required to approve the Authorized Share Increase by written consent. The Series
B Stockholders, which hold in the aggregate 640,800,720 (as of the date hereof), or approximately 50.998925% of the voting equity
of the Company, have voted in favor of the Authorized Share Increase thereby satisfying the requirement under Nevada law that at
least a majority of the voting equity vote in favor of a corporate action by written consent.
The following table sets forth the name of
the Series B Stockholders, the number of shares of Series B Preferred held by each Series B Stockholder, the total number of votes
that the Series B Stockholders voted in favor of the Authorized Share Increase and the percentage of the issued and outstanding
voting equity of the Company that voted in favor thereof.
Name of Series B Stockholder
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Number of Shares of Series B Preferred held
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Number of Votes held by such Series B Stockholder
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Number of Votes that Voted in favor of the Authorized Share Increase
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Percentage of the Voting Equity that Voted in favor of the Authorized Share Increase
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Brad Pyatt
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31
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389,506,320
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389,506,320
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30.9993%
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Cory Gregory
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20
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251,294,440
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251,294,440
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19.9995%
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ACTIONS TO BE TAKEN
The
Authorized Share Increase will become effective on the date that we file the Certificate of Amendment to the Certificate of Incorporation
of the Company (the “
Amendment
”) with the Secretary of State of the State of Nevada. We intend to file the Amendment
with the Secretary of State of the State of Nevada promptly after the twentieth (20
th
) day following the date on which
this Information Statement is mailed to the Stockholders.
With respect to the Authorized Share Increase
described in this Information Statement, the Board reserves the right, notwithstanding that the Series B Stockholders have approved
the Authorized Share Increase, to elect not to proceed with the Authorized Share Increase, at any time prior to filing the Amendment,
the Board, in its sole and absolute discretion, determines that it is no longer in the Company’s best interests and the best
interests of the Company’s stockholders to consummate the Authorized Share Increase.
INCREASE IN THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
GENERAL
The number of authorized shares of our Common
Stock will be increased from one billion (1,000,000,000) shares to two billion five hundred million (2,500,000,000) shares (the
“
Authorized Share Increase
”).
PURPOSE AND EFFECT OF INCREASING THE NUMBER
OF AUTHORIZED SHARES
The Board believes the Authorized Share
Increase is necessary and advisable in order to maintain our financing and capital raising ability and to generally maintain our
flexibility in today’s competitive and rapidly changing environment. The additional one billion five hundred million (1,500,000,000)
shares of Common Stock so authorized will be available for issuance by the Board for stock splits or stock dividends, acquisitions,
raising additional capital, stock options or other corporate purposes. The additional shares of Common Stock could be used for
potential strategic transactions, including, among other things, acquisitions, strategic partnerships, joint ventures, restructurings,
business combinations and investments, although there are no immediate plans to do so. Assurances cannot be provided that any such
transactions will be consummated on favorable terms or at all, that they will enhance stockholder value or that they will not adversely
affect the Company’s business or the trading price of the Common Stock. Other than issuances pursuant to employee benefit
plans and currently outstanding stock options, the Board has no current plans to issue any of the additional shares of Common Stock
that would be authorized by this proposal. The Company does not anticipate that it would seek authorization from the stockholders
for issuance of such additional shares unless required by applicable law or regulations.
The increase in the authorized number of shares
of Common Stock and any subsequent issuance of such shares could have the effect of delaying or preventing a change in control
of the Company without further action by the stockholders. Shares of authorized and unissued Common Stock could (within the limits
imposed by applicable law) be issued in one or more transactions which would make a change in control of the Company more difficult,
and therefore less likely. Any such issuance of the additional shares of Common Stock could have the effect of diluting the earnings
per share and book value per share of outstanding shares of Common Stock, and such additional shares could be used to dilute the
stock ownership or voting rights of a person seeking to obtain control of the Company. The Board is not aware of any attempt to
take control of the Company and has not presented this proposal with the intention that the increase in the number of authorized
shares of Common stock be used as a type of antitakeover device. Any additional Common Stock, when issued, would have the same
rights and preferences as the shares of Common Stock presently outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to MusclePharm with
respect to the beneficial ownership of MusclePharm’s common stock as of January 30, 2012, unless otherwise noted, by:
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each stockholder known to MusclePharm to own beneficially more than 5% of MusclePharm’s common stock;
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each of MusclePharm’s directors;
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each of MusclePharm’s executive officers; and
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all of MusclePharm’s current directors and executive officers as a group.
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Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or dispositive power with respect to securities. Common shares relating to options
or warrants currently exercisable, or exercisable within 60 days of January 30, 2011, are deemed outstanding for computing
the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person.
Except as indicated by footnote, and subject to the community property laws where applicable, the persons or entities named in
the tables have sole voting and dispositive power with respect to all shares shown as beneficially owned by them.
Name and
Address of
Beneficial Owner
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Amount and
Nature of
Beneficial
Ownership of
Common Stock
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Percentage of
Beneficial
Ownership
of Common
Stock (1)
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Amount
and Nature
of Beneficial
Ownership of
Series B Preferred
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Percentage of
Ownership of
Series B Preferred
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Brad J. Pyatt(2)
4721 Ironton St
Denver, CO 80239
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18,779,316
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3.05
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%
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31
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60.78
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%
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Cory Gregory(3)
4721 Ironton St
Denver, CO 80239
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10,483,014
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1.70
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%
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20
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39.22
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%
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Lawrence S, Meer
4721 Ironton St
Denver, CO 80239
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0
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0
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%
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0
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0
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%
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Jeremy Deluca
4721 Ironton St
Denver, CO 80239
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0
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0
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%
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0
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0
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%
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John H. Bluher
4721 Ironton St
Denver, CO 80239
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0
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0
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%
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0
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0
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%
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All executive officers and directors as a group (5 persons)
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29,262,330
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4.75
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%
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51
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100
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%
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(1)
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Percent of Class based on 615,697,765 common shares outstanding as of January 30, 2012.
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(2)
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Mr. Pyatt’s 31 shares of Series B Preferred allow him to vote the equivalent of 389,506,320 shares of common stock. Mr. Pyatt has voted all of his Series B Preferred shares in favor of the authorized increase.
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(3)
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Mr. Gregory’s 20 shares of Series B Preferred allow him to vote the equivalent of 251,294,440 shares of common stock. Mr. Pyatt has voted all of his Series B Preferred shares in favor of the authorized increase
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ADDITIONAL INFORMATION
We are subject to the disclosure requirements
of the Securities Exchange Act of 1934, as amended, and in accordance therewith, file reports, information statements and other
information, including annual and quarterly reports on Form 10-K and 10-Q, respectively, with the Securities and Exchange Commission
(the “
SEC
”). Reports and other information filed by the Company can be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such material can also be
obtained upon written request addressed to the SEC, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, the SEC maintains a web site on the Internet (http://www.sec.gov) that contains reports, information
statements and other information regarding issuers that file electronically with the SEC through the Electronic Data Gathering,
Analysis and Retrieval System.
The following documents, as filed with the
SEC by the Company, are incorporated herein by reference:
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(1)
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Annual Report on Form 10-K for the fiscal year ended December 31, 2010;
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(2)
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Quarterly Report on Form 10-Q for the three months ended September 30, 2011;
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(3)
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Quarterly Report on Form 10-Q for the three months ended June 30, 2011; and
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(4)
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Quarterly Report on Form 10-Q for the three months ended March 31, 2011
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You may request a copy of these filings, at
no cost, by writing MusclePharm Corporation at 4721 Ironton Street, Building A, Denver, Colorado 90839 or telephoning the Company
at (800) 210-7369. Any statement contained in a document that is incorporated by reference will be modified or superseded for all
purposes to the extent that a statement contained in this Information Statement (or in any other document that is subsequently
filed with the SEC and incorporated by reference) modifies or is contrary to such previous statement. Any statement so modified
or superseded will not be deemed a part of this Information Statement except as so modified or superseded.
This Information Statement
is provided to the holder of Common Stock of the Company only for information purposes in connection with the Authorized Share
Increase, pursuant to and in accordance with Rule 14c-2 of the Exchange Act. Please carefully read this Information Statement.
BY ORDER OF THE BOARD OF
DIRECTORS
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By:
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/s/ Brad Pyatt
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Name:
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Brad Pyatt
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Title:
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Chairman
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