0001144204-18-039650.txt : 20180724 0001144204-18-039650.hdr.sgml : 20180724 20180724162708 ACCESSION NUMBER: 0001144204-18-039650 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20180724 DATE AS OF CHANGE: 20180724 GROUP MEMBERS: JOSHUA LANDES GROUP MEMBERS: NELSON OBUS GROUP MEMBERS: WYNNEFIELD CAPITAL MANAGEMENT, LLC GROUP MEMBERS: WYNNEFIELD CAPITAL, INC. GROUP MEMBERS: WYNNEFIELD CAPITAL, INC. PROFIT SHARING PLAN GROUP MEMBERS: WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. GROUP MEMBERS: WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MusclePharm Corp CENTRAL INDEX KEY: 0001415684 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 770664193 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-85226 FILM NUMBER: 18966773 BUSINESS ADDRESS: STREET 1: 4721 IRONTON STREET CITY: DENVER STATE: CO ZIP: 80239 BUSINESS PHONE: (800) 210-7369 MAIL ADDRESS: STREET 1: 4721 IRONTON STREET CITY: DENVER STATE: CO ZIP: 80239 FORMER COMPANY: FORMER CONFORMED NAME: Tone in Twenty DATE OF NAME CHANGE: 20071018 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WYNNEFIELD PARTNERS SMALL CAP VALUE LP I CENTRAL INDEX KEY: 0001251565 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 450 SEVENTH AVENUE STREET 2: SUITE 509 CITY: NEW YORK STATE: NY ZIP: 10123 BUSINESS PHONE: 212-760-0814 MAIL ADDRESS: STREET 1: 450 SEVENTH AVENUE STREET 2: SUITE 509 CITY: NEW YORK STATE: NY ZIP: 10123 SC 13D/A 1 tv498556_sc13da.htm SC 13D/A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D/A

(Amendment No. 7)

 

Under the Securities Exchange Act of 1934

 

MUSCLEPHARM CORP.

‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾

(Name of Issuer)

 

Common Stock, $0.001 par value

‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾

(Title of Class of Securities)

 

627335201

‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾

(CUSIP Number)

  

 

Wynnefield Partners Small Cap Value, L.P. I

450 Seventh Avenue, Suite 509

New York, New York 10123

Attention: Mr. Nelson Obus

 

Copy to:

Jeffrey S. Tullman, Esq.

Kane Kessler, P.C.

666 Third Avenue, 23rd Floor

New York, New York 10017

(212) 541-6222


(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

July 3, 2018

‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾

(Date of Event which requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 2 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Wynnefield Partners Small Cap Value, L.P. I 13-3953291

 

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

725,460 (See Item 5)

8

SHARED VOTING POWER

 

0 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

725,460 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

0 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

725,460 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

4.9%

14

 

TYPE OF REPORTING PERSON*

PN

 

       

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 3 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Wynnefield Partners Small Cap Value, L.P. 13-3688497

 

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

463,635 (See Item 5)

8

SHARED VOTING POWER

 

0 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

463,635 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

0 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

463,635 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

3.2%

14

 

TYPE OF REPORTING PERSON*

PN

 

       
   

 

CUSIP No. 627335201

 

 

 

13D/A Page 4 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Wynnefield Small Cap Value Offshore Fund, Ltd. (No IRS Identification No.)

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

Cayman Islands

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

414,210 (See Item 5)

8

SHARED VOTING POWER

 

0 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

414,210 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

0 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

414,210 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

2.8%

14

 

TYPE OF REPORTING PERSON*

CO

 

       

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 5 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Wynnefield Capital, Inc. Profit Sharing Plan

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ] 

(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

N/A

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

40,000 (See Item 5)

8

SHARED VOTING POWER

 

0 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

40,000 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

0 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

40,000 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

0.3%

14

 

TYPE OF REPORTING PERSON*

CO

 

       
   

 

CUSIP No. 627335201

 

 

 

13D/A Page 6 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Wynnefield Capital Management, LLC 13-4018186

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

N/A

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

New York

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

1,189,095 (See Item 5)

8

SHARED VOTING POWER

 

0 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

1,189,095 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

0 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

1,189,095 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

6.4%

14

 

TYPE OF REPORTING PERSON*

OO

 

       

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 7 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Wynnefield Capital, Inc. 13-3688495

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ] 

(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

N/A

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

Delaware

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

414,210 (See Item 5)

8

SHARED VOTING POWER

 

0 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

414,210 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

0 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

414,210 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

2.8%

14

 

TYPE OF REPORTING PERSON*

CO

 

       

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 8 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Nelson Obus

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

N/A

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

 

United States

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

0 (See Item 5)

8

SHARED VOTING POWER

 

14,731,667 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

0 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

14,731,667 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

14,731,667 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

11.2%

14

 

TYPE OF REPORTING PERSON*

 

IN

 

       

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 9 of 13

 

1

NAME OF REPORTING PERSON

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

 

Joshua Landes

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ X ]

3

SEC USE ONLY 

 

4

SOURCE OF FUNDS*

 

N/A

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

 

[ ]

6

CITIZENSHIP OR PLACE OF ORGANIZATION

United States

 

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

7

SOLE VOTING POWER

 

0 (See Item 5)

8

SHARED VOTING POWER

 

14,731,667 (See Item 5)

9

SOLE DISPOSITIVE POWER

 

0 (See Item 5)

10

SHARED DISPOSITIVE POWER

 

14,731,667 (See Item 5)

11

 

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

14,731,667 (See Item 5)

12

 

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

 

[ ]       

13

 

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

11.2%

14

 

TYPE OF REPORTING PERSON*

IN

 

       

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 10 of 13

 

Item 1. Security and Issuer.

 

This Amendment No. 7 amends the Statement of Beneficial Ownership on Schedule 13D originally filed with the Securities and Exchange Commission (the “Commission”) on July 1, 2015 and as amended by Amendment No. 1 filed on November 9, 2015, Amendment No. 2 filed on September 15, 2016, Amendment No. 3 filed on November 22, 2016, Amendment No. 4 filed on July 10, 2017, Amendment No. 5 filed on November 1, 2017, and Amendment No. 6 filed on January 3, 2018 (collectively, the “Schedule 13D”) by the Wynnefield Reporting Persons (as defined in the Schedule 13D) with respect to shares of common stock, $0.001 par value per share (the “Common Stock”) of MusclePharm Corp., a Nevada corporation (the “Issuer”), whose principal executive office are located at 4400 Vanowen St., Burbank, CA, 91505. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Schedule 13D.

 

Item 3. Source and Amount of Funds or Other Consideration.

 

Item 3 of the Schedule 13D is hereby amended and restated as follows:

 

The securities reported in this Schedule 13D as directly beneficially owned by the Wynnefield Reporting Persons were acquired with funds of approximately $6,044,583 (including brokerage commissions). All such funds were provided from the working capital or personal funds of the Wynnefield Reporting Persons who directly beneficially own such securities.

 

Item 4. Purpose of the Transaction

 

Item 4 of the Schedule 13D is hereby amended and restated as follows:

 

This Schedule 13D is filed by the Wynnefield Reporting Persons to report acquisitions of shares of the Common Stock which increases its beneficial ownership (as such term is defined under Rule 13d-3 under the Exchange Act of 1934, as amended) of the Common Stock of the Issuer by more than 1% from the amounts previously reported on the Schedule 13D previously filed on January 3, 2018.

 

On July 23, 2018, the Wynnefield Reporting Persons sent a letter (the “Wynnefield Letter”) to the Issuer’s Board of Directors (“Board”) criticizing, in particular, the Issuer’s calamitous performance under its current CEO, Ryan Drexler. The Wynnefield Letter states that in Mr. Drexler’s three years as CEO, the Issuer’s reported revenues have plunged over 30%, its R&D expenditures have been cut from $4.2 million to $700,000, the Issuer’s share price has tumbled approximately 80%, while Mr. Drexler’s total compensation has risen from $350,000 to over $4 million dollars. The Wynnefield Reporting Persons further note in the Wynnefield Letter that another shareholder, White Winston Select Asset Fund (“White Winston”), has suggested, in a recent Schedule 13D filing, a number of initiatives for the benefit of all shareholders. The Wynnefield Letter concludes with a recommendation that the Board engage with White Winston for the benefit of the Issuer’s shareholders. A copy of the Wynnefield Letter is attached to this Schedule 13D as Exhibit 99.2 and is incorporated herein by reference as if fully set forth herein. The foregoing summary descriptions of the Wynnefield Letter is not intended to be complete and is qualified in its entirety by the complete text of the Wynnefield Letter.

 

Other than as set forth in this Item 4, the Wynnefield Reporting Persons do not have any current plans, proposals or negotiations that relate to or would result in any of the matters referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D. The Wynnefield Reporting Persons intend to review their investment in the Issuer on a continuing basis, and to the extent permitted by law, may seek to engage in discussions with other stockholders and/or with management and the Board of the Issuer concerning the business, operations or future plans of the Issuer. Depending on various factors including, without limitation, the Issuer’s financial position, the price levels of the shares of Common Stock, conditions in the securities markets and general economic and industry conditions, the Wynnefield Reporting Persons may, in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional shares of Common Stock, selling shares of Common Stock, engaging in short selling of or any hedging or similar transaction with respect to the Common Stock, taking any other action with respect to the Issuer or any of its securities in any manner permitted by law or changing its intention with respect to any and all matters referred to in paragraphs (a) through (j) of Item 4.

 

Item 5. Interest in Securities of the Issuer.

 

Item 5 of the Schedule 13D is hereby amended and restated as follows:

 

(a), (b) and (c) As of July 24, 2018, the Wynnefield Reporting Persons beneficially owned in the aggregate 1,643,305 shares of Common Stock, constituting approximately 11.2% of the outstanding shares of Common Stock. The percentage of shares of Common Stock reported as being beneficially owned by the Wynnefield Reporting Persons is based upon 14,731,667 shares outstanding as of May 1, 2018, as set forth in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the Securities and Exchange Commission (the “Commission”) on May 15, 2018.

 

The following table sets forth certain information with respect to Common Stock directly beneficially owned by the Wynnefield Reporting Persons listed below:

 

Name Number of Common Stock Percentage of Outstanding Common Stock
Wynnefield Partners I 725,460 4.9%
Wynnefield Partners 463,635 3.2%
Wynnefield Offshore 414,210 2.8%
Plan 40,000 0.3%

 

WCM is the sole general partner of Wynnefield Partners and Wynnefield Partners I and, accordingly, may be deemed to be the indirect beneficial owner (as that term is defined under Rule 13d-3 under the Exchange Act) of the Common Stock that Wynnefield Partners and Wynnefield Partners I beneficially own. WCM, as the sole general partner of Wynnefield Partners and Wynnefield Partners I, has the sole power to direct the voting and disposition of the Common Stock that Wynnefield Partners and Wynnefield Partners I beneficially own. Messrs. Obus and Landes are the co-managing members of WCM and, accordingly, each of Messrs. Obus and Landes may be deemed to be the indirect beneficial owner (as that term is defined under Rule 13d-3 under the Exchange Act) of the Common Stock that WCM may be deemed to beneficially own. Each of Messrs. Obus and Landes, as co-managing members of WCM, share the power to direct the voting and disposition of the shares of Common Stock that WCM may be deemed to beneficially own.

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 11 of 13

 

WCI is the sole investment manager of Wynnefield Offshore and, accordingly, may be deemed to be the indirect beneficial owner (as that term is defined under Rule 13d-3 under the Exchange Act) of the Common Stock that Wynnefield Offshore beneficially owns. WCI, as the sole investment manager of Wynnefield Offshore, has the sole power to direct the voting and disposition of the Common Stock that Wynnefield Offshore beneficially owns. Messrs. Obus and Landes are executive officers of WCI and, accordingly, each may be deemed to be the indirect beneficial owner (as that term is defined under Rule 13d-3 under the Exchange Act) of the Common Stock that WCI may be deemed to beneficially own. Messrs. Obus and Landes, as executive officers of WCI, share the power to direct the voting and disposition of the shares of Common Stock that WCI may be deemed to beneficially own.

 

The Wynnefield Profit Plan is an employee profit sharing plan. Mr. Obus and Mr. Landes are co-trustees of the Wynnefield Profit Plan and have the authority to direct the voting and the disposition of the shares of Common Stock that the Wynnefield Profit Plan beneficially owns. Accordingly, Mr. Obus and Mr. Landes may be deemed to be the indirect beneficial owners (as that term is defined under Rule 13d-3 under the Exchange Act) of the shares of Common Stock that the Wynnefield Profit Plan may be deemed to beneficially own.

 

Beneficial ownership of the Common Stock shown on the cover pages of and set forth elsewhere in this Schedule 13D for each member of the Wynnefield Reporting Persons assumes that they have not formed a group for purposes of Section 13(d)(3) under the Exchange Act, and Rule 13d-5(b)(1) promulgated thereunder. If the members of the Wynnefield Reporting Persons were deemed to have formed a group for purposes of Section 13(d)(3) and Rule 13d-5(b)(1), the group would be deemed to own beneficially (and may be deemed to have shared voting and dispositive power over) in the aggregate 1,643,305 shares of Common Stock, constituting approximately 11.2% of the outstanding shares of Common Stock. The percentage of shares of Common Stock reported as being beneficially owned by the Wynnefield Reporting Persons is based upon 14,731,667 shares outstanding as of May 1, 2018, as set forth in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the Commission on May 15, 2018.

 

The filing of this Schedule 13D and any future amendment by the Wynnefield Reporting Persons, and the inclusion of information herein and therein with respect to WCM, WCI and Messrs. Obus and Landes, shall not be considered an admission that any of such persons, for the purpose of Section 16(b) of the Exchange Act, are the beneficial owners of any shares in which such persons do not have a pecuniary interest. Each of WCM, WCI and Messrs. Obus and Landes disclaims any beneficial ownership of the shares covered by this Schedule 13D.

  

The Wynnefield Reporting Persons have acquired shares of Common Stock during the last 60 days as follows:

 

Name Transaction Date Number of Shares Price Per Share
         
Wynnefield Partners I Purchase 7/2/2018 75,141 $0.9419
Wynnefield Partners I Purchase 7/3/2018 30,049 $0.9974
Wynnefield Partners I Purchase 7/6/2018 33,454 $0.9762
Wynnefield Partners I Purchase 7/10/2018 12,579 $0.9937
Wynnefield Partners Purchase 7/2/2018 48,609 $0.9419
Wynnefield Partners Purchase 7/3/2018 19,502 $0.9974
Wynnefield Partners Purchase 7/6/2018 21,626 $0.9762
Wynnefield Partners Purchase 7/10/2018 9,075 $0.9937
Wynnefield Offshore Purchase 7/2/2018 27,775 $0.9419
Wynnefield Offshore Purchase 7/3/2018 11,449 $0.9974
Wynnefield Offshore Purchase 7/6/2018 12,395 $0.9762
Wynnefield Offshore Purchase 7/10/2018 5,346 $0.9937

 

(d) and (e). Not Applicable.

 

Item 7. Material to be Filed as Exhibits.

 

Item 7 of the Schedule 13D is hereby amended by the addition of the following:

 

Exhibit 99.2 Letter, dated July 23, 2018, from Wynnefield Capital, Inc. to the Board of Directors of MusclePharm Corp.

 

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 12 of 13

 

 

SIGNATURE

 

After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this Schedule 13D/A is true, complete and correct.

 

Dated: July 24, 2018

 

WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. I

 

By: Wynnefield Capital Management, LLC,

its General Partner

 

By: /s/ Nelson Obus

Nelson Obus, Co-Managing Member

 

WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P.

 

By: Wynnefield Capital Management, LLC,

its General Partner

 

By: /s/ Nelson Obus

Nelson Obus, Co-Managing Member

 

WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD.

 

By: Wynnefield Capital, Inc.,

its Investment Manager

 

By: /s/ Nelson Obus

Nelson Obus, President

 

WYNNEFIELD CAPITAL INC. PROFIT SHARING PLAN, INC.

 

By: /s/ Nelson Obus

Nelson Obus, Authorized Signatory

 

 

WYNNEFIELD CAPITAL MANAGEMENT, LLC

 

By: /s/ Nelson Obus

Nelson Obus, Co-Managing Member

 

   

 

CUSIP No. 627335201

 

 

 

13D/A Page 13 of 13

 

 

 

 

 

 

WYNNEFIELD CAPITAL, INC.

 

By: /s/ Nelson Obus

Nelson Obus, President

 

/s/ Nelson Obus

Nelson Obus, Individually

 

/s/ Joshua Landes

Joshua Landes, Individually

 

 

   

EX-99.2 2 tv498556_ex99-2.htm EX-99.2

 

EXHIBIT-99.2

 

Wynnefield Capital, Inc.

450 Seventh Avenue, Suite 509

New York, NY 10123

 

 

July 23, 2018

 

 

Board of Directors

MusclePharm Corp.

4400 Vanowen Street 91505

Burbank, CA

Attention: Bill Bush and Ryan Drexler

 

 

FOR DISTRIBUTION TO THE BOARD OF DIRECTORS VIA EMAIL, FEDEX, US MAIL

 

Dear Board of Directors,

 

It is well known in informed institutional investment circles that Wynnefield Capital has maintained for almost 20 years in its somewhat cramped conference room, twin plaques of notable Chief Executive Officers who have managed our portfolio companies. The plaques attest to the nomination of said CEOs to either Wynnefield's Hall of Fame or Hall of Shame. As is our practice, these winners and losers are elected annually at our holiday party by a vote of all of our employees.

  

In 2015, Brad Pyatt, former CEO of MusclePharm Corp., was duly elected to our Hall of Shame by near unanimous vote for a series of miscues too numerous to detail. As 2018 progresses, Wynnefield employees are becoming increasingly aware that an unprecedented event is becoming increasingly likely. To wit: an election of a second CEO to the Hall of Shame from the same company but in different years.

  

This tentative but dubious distinction belongs to MusclePharm's current CEO, Ryan Drexler. In his three years as CEO, MusclePharm's reported revenues have plunged over 30%, its R&D expenditures have been cut from $4.2 million to $700,000, its share price has tumbled approximately 80%, while Mr. Drexler’s total compensation has risen from $350,000 to over $4 million dollars.

  

Part of this compensation has come in the form of a very high yield $18 million convertible loan to MusclePharm. In November of 2017, the Board approved a loan extension raising the coupon on Mr. Drexler’s convertible loan to 14% and reducing the conversion strike price from $1.96 per share to $1.11 per share. These metrics should inform the Board why Mr. Drexler has emerged as a leading candidate for Wynnefield's 2018 Hall of Shame nomination.

  

On June 22, 2018, an entity known as the White Winston Select Asset Fund filed a Schedule 13D that disclosed ownership of almost 20% of MusclePharm's shares. In Item 4 of the Schedule 13D, under the "Purpose of the Transaction" section, White Winston suggests their willingness to move forward with a number of initiatives which clearly will benefit your long oppressed outside shareholders and likely Drexler too. Wynnefield strongly recommends engaging with White Winston to the benefit of your outside shareholders and to keep Mr. Drexler’s name off our Hall of Shame plaque.

 

 

Sincerely,

 

 

Nelson Obus, President

Wynnefield Capital, Inc.