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Filing of draft final budget for the next 13 weeks submitted, for those following the bankruptcy court in Nevada.
Couple observations below the supplied cash flow forecast:
1. This model assumes 16.7% gross profit margin, without including the logistics and shipping costs. The most recent MSLP 10-Q (from March 31, 2022), shows a gross margin of only 11.5%. Logistics' spot on the old 10-Q net income statement isn't explicitly stated. What's caused the favorable significant swing in margin? Most raw materials and inflation are only increasing in prices, hammering CPG margins. Also of note is one of the major suppliers for their protein powders, JW Nutritional has also been appointed to the court-supervised committee of unsecured creditors. Most of the committee contains current or former suppliers involved in litigation with the company. With the debtor-in-possession funding, it stands to reason any supplier would not soften their own pricing to the benefit of the corporation, particularly if there has been litigation in the past.
2. Board member compensation is more than twice the marketing and e-commerce expenses combined. Details aren't available, if the compensation is stock-based (although hard to price equity or options on a delisted ticker), or cash-based. I don't envy having to manage these tough times, but Musclepharm as a brand is coasting on its diminishing legacy reputation. Even acknowledging the stated "catch-up" nature of the compensation for December to February, this still seems out of sync with marketing spend. Sites like Muscle and Strength have long since dropped Combat Protein, and other MP products in their top 50 sellers. But the current bestsellers list is not that impressive - dominated by Chinese-owned MuscleTech, competing with NOW Foods, USN and old standbys like C4 Cellucor. and Allmax. At its core, whey protein is a commodity product and marketing correctly to the target channels will elevate the brand. Is $50K a quarter in marketing really sufficient to drive top-line results?
3. Restructuring costs are about 30% higher than all SG&A costs forecasted for this quarter. That's tough for any balance sheet to absorb, but of note the DIP financing of $2.25M is earning only ~8% in annual interest. With current inflation, it's at par value. Something to think about, which leads to:
4. Assuming the company can emerge from Chapter 11, settle litigation, and actually run as a functional business, and with stripping out all restructuring costs going forward, at current margins including shipping and logistics, this company needs to jump from its forecasted $4.1M revenue per quarter up to about $10.8M. Is this realistic? Not really. That's also making the assumption their non-logistics SG&A costs don't scale and remain fixed. With the customer concentration risk held before with Costco, they might need that account back just to help them meet the sales target.
Very difficult times ahead. I hope the new team can accomplish this feat.
If you want to read what happened behind the scenes the past several months and some of the funniest text message responses to the "good faith" liar Ryan Drexler, click this link.
https://cases.stretto.com/public/x219/12044/PLEADINGS/1204403212380000000044.pdf
Interesting read in how the wolves are now devouring the carcass of the failed trust fund baby of Halbert Drexler.
https://cases.stretto.com/public/x219/12044/PLEADINGS/1204402272380000000144.pdf
Ryan has also downsized from his former Beverly Hills and Malibu estates (where he was delinquent on his property taxes) to a postage stamp lot and tract home in Reno.
Back to very telling IMDB credit: https://www.imdb.com/name/nm3573940/bio
To report fraud on the PPP program, specifically Ryan Drexler who illegally personally pocketed 100% of the PPP funds allocated to Musclepharm:
https://www.sba.gov/partners/contracting-officials/contract-administration/report-fraud-waste-abuse
there are whistleblower awards available.
I, RYAN DREXLER, hereby declare under the penalty of perjury as follows:
1. The following facts are personally known to me and if called to testify thereto, I
could and would competently do so under oath.
2. I am the former CEO of Musclepharm Corporation (“Debtor”) and the former
Chairman of the Board of Directors for Debtor. I tendered my resignation as CEO in early December
2022, but because of litigation brought against the Debtor and I in New York, and the
commencement of this bankruptcy proceeding in Nevada, my resignation did not become effective
until January 8, 2023.
When will we see the PPP program loan of $900k that Ryan illegally diverted 100% to his own salary hit the fraud indictment wire?
December's numbers have been released....https://cases.stretto.com/public/x219/12044/PLEADINGS/1204402252380000000009.pdf
When you buying back in you turd ?
Lots of action here. While I've long ago written off the few shares I didn't liquidate before the BK, it's still amusing to watch the battle between WW (who thinks there's maybe still some there there) and Empery (who clearly just wants to fire sale the remainder of the company)
https://cases.stretto.com/musclepharm/court-docket/#search
You still around JLTG ?
You still around JLTG ?
How long before Costco pulls the plug on MusclePharm?
Clearly vendors will likely slow roll delivery on any purchase orders after the MusclePharm Chapter 11.
As far as pre-bankruptcy purchase order deliveries:
If you delivered goods to a debtor in the 20 days before the debtor filed bankruptcy, and those goods were delivered in the ordinary course of business, then you can get administrative claim status of the amount of the goods delivered. See 11 U.S.C. § 503(b)(9). If your claim for administrative expenses is allowed, you jump ahead of all the other unsecured creditors, and in a Chapter 11 case, generally you get paid in full. (Note that the administrative claim is only for the value of the goods, and does not include add ones like taxes, shipping fees, or claims for surcharges. You can still make a claim for those amounts, but they will be an unsecured claim, and not entitled to administrative claim status.) Usually, there is a deadline set early in the case for filing a 503(b)(9) claim, so keep an eye out for notices concerning any “claim bar dates.”
With the limited MusclePharm inventory levels on hand due to cash on hand crunch, it is difficult to see how Costco who accounts for >50% of all Musclepharm revenues will be able to maintain any inventory.
More drama filed today that may be the blueprint for an attempted reorganization plan between Ryan and White Winston/Amerop. Empery successfully gained immediate relief in the courts to arrest this plan as they have collateralized essentially all the MSLP assets and likely demanded the accelerated payment on the notes.
Section 5(b) under the Notes provides that if any event of default occurs, the outstanding principal amount of the Notes, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the holder’s election, immediately due and payable in cash at the Mandatory Default Amount (as defined in the Notes) and further that commencing five (5) days after the occurrence of any event of default and that results in the right or automatic acceleration of the Notes, the Notes shall accrue interest at an interest rate equal to the lesser of eighteen percent (18%) per annum or the maximum rate permitted under applicable law. The October Notes were amended pursuant to a Waiver and Amendment, dated June 3, 2022 (the “Waiver and Amendment”).
More questions than answers.
If "Big E" is CEO why did Ryan sign as CEO in Nevada Bankruptcy Court on December 15th?
Was "Big E" a negotiating piece pre-bankruptcy and is now gone that bankruptcy has been filed?
Honestly "who cares". It's over and there is no coming back. All MSLP retail investors should now change their occupation to "artist" on their social media.
Well I guess that answers it:
Does that mean the US of A government will bail them out and the stock will go up?
Are you not familiar with OTC Market's website?
https://www.otcmarkets.com/stock/MSLPQ/security
Or how things end up when a company goes into bankruptcy?
Looking for some cheapies. Anyone know the share structure ?
Looks like this initial filing was to stay the auction and tie Empery up. The fact Ryan estimates there will be funds available for unsecured creditors reeks of bankruptcy fraud. We all know the liabilities dwarf the assets and all the reasonable assets were secured often by as many as 3 priority class.
Class 1: Empery
Class 2: Prestige
Class 3: Ryan
I believe the company has 120 days to provide a reorg plan but there really isn't much to reorganize. MSLP doesn't have any burdensome leases or contracts that can alleviate the debt. This was a Ponzi Scheme that sold vendors wares and revenues were collected by Ryan to pay his enormous salary and note interest and then the vendors were stiffed or payed pennies or unreasonable installment agreements that were not adhered. Who wants to manufacture MSLP products without a retainer that is at least Payment in Full of a potential purchase order before any manufacturing?
COGS were nearly equal to Revs anyway and we all know how Revs have declined under Ryan and losing any scaling potential and besides the only real rev stream is Costco and they are pressuring vendor price cuts.
MSLP changed to MSLPQ, bankruptcy:
https://otce.finra.org/otce/dailyList?viewType=Symbol%2FName%20Changes
But, just looking at the chart, from a technical standpoint, I think we are going to get a bounce.
Back up the truck.
LOL
When Gaspari Nutrition went kaput several years ago, Rich bought his old company back. Maybe Brad and Cory would be interested in part deux ;)
When a fake Leonardo like Salvator Mundi sells for $450m, maybe Ryan is hoping for a Hail Mary at auction. ;)
Maybe that's why Ryan describes himself as "artist" at present.
Very strange indeed. I guess he failed to let their social media people know that the company is going out of business and that he may be going to jail!..lol
Their CEO has left the proverbial building
The proverbial building (that is, their production facilities) is likewise gone, and their manufacturing relationships are (as best I can tell) all shot to hell
Their assets, including any inventory, are being auctioned off
Yet somehow, someone keeps posting workouts and promotional bullshit like they're a going concern.
I don't get it.
Thought this post under my old moniker was a proper way to end it.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=117659857
Time to buy on the pullback. It's still way overvalued but I think we can get a bounce and then maybe gain traction.
LOL
Musclepharmcorp.com is gone
https://www.musclepharmcorp.com/
Ryan no longer lists himself as MusclePharm CEO on his Instagram. Now he lists himself as an "artist" ..... I think a better description would be "scam artist"
https://www.instagram.com/drexphotos/?hl=en
Equity wise you would need to sell 1m shares of MSLP at its current price to purchase a single $2 can of that hot selling MSLP Combat Energy drink that was promised to produce $30m in sales. At the most recent reported OS, the entire Market Cap would purchase a couple12 can cases. Turokman of course is still averaging down and in the black ;)
I've caught up on MadCow's posts, your own posts, GSB's posts from 2015-2016, etc. It's remarkable that the company has existed for this long.
The litigation, the bloated AP, the non-arm's length relationships at the Board level and the Spinal Tap CFOs - it's a compounding mess. Unfortunately the human cost rests in people's financial livelihoods being damaged. I don't refer to the speculative OTC stock purchaser, but the employees of suppliers trying to recoup losses who have been strung along.
But the ultimate default to Empery results in an acceleration of principal and interest, plus all IP that was pledged as collateral. Without the brand assets, what's left?
Depressing.
Welcome to the gray sheets. "Expert market" time...unsolicited quotes only.
The funniest part is that they were announcing their plan to uplist to Nasdaq just a few months ago. This ain't how you do that, Drex.
MSLP on OTC Markets
Welp, it's all over but the crying.
Not sure when the notice went up, but per OTC MSLP has "entered a 15 day grace period" before it gets moved to the gray sheets (and OTC stops providing quotes).
Hope everyone was able to dump their holdings...
I was considering the publish date of the K in noting the 'over 6 month' timeframe (the OTC Markets rules specifically mention publish date for accurate financials), but you raise an interesting point: If the annual report cannot be relied upon, doesn't that mean by definition that some or all of the preceding quarterlies are not reliable as well? Yet they only note the annual and subsequent quarterlies in the 8k.
Drex's games with the books (and the Spinal Tap drummer cast of CFOs who have signed off on them, then balked & bailed when they've realized what they agreed to) are so baked into the equation at this point that, barring any new scam, they have become white noise at this point.
Look again.
The non reliance covers the entire 2021 10-K AND the 2022 Q1.
15 months of non reliance financials.
But as I have opined many times, the MSLP financials have been fraudulent since Ryan became CEO. He threw his former college roommate under the bus for fraudulent Q end stuffing previously.
Stiffed suppliers out of over $40m and actually reported almost half of that figure as profit when suppliers modified their outstanding invoices to collect anything. MSLP has been a fraud and Ponzi Scheme for a long time.
On August 22, 2022, the Board of Directors of the Company determined that the Company’s financial statements contained in its Annual Report on Form 10-K for the year ended December 31, 2021 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 should no longer be relied upon due to errors in such financial statements, and that a restatement of such financial statements is required.
I'm surprised OTC Markets still has them at Pink Limited (Yield), given that the August non-reliance 8-k means it's been well over 6 months since they have posted current and accurate financials.