Unfortunately with regards to PPS (which lets be honest is what all of us here are interested in in the long run) then revenue isnt the only number that matters.

I agree that Musclepharm Corp have done well with growing the company and brand but it has been under huge cost and all paid for by the shareholders. Which if i could be at all confident that management had us in mind and wanted to share future profits with us then great. But so many things they are doing show me they dont want to do that....they dilute relentlessly, they pay themselves ridiculous compensation packages, the ignore shareholders questions completely, have very dodgy policies which give 2 guys complete voting control of the company, and are about to dilute the company by 400million+ shares (if you agree that the bonus plan is 2010 v 2011) just to give those shares to the top 3 guys as a "revenue bonus" even when the company is yet to turn a profit.

I think there is very strong evidence that Management want ownership of MSLP for themselves so that they dont have to share the spoils with shareholders.

I agree they know their business and how to sell products (and also tentatively agree that they know how to turn a profit) I just dont think the shareholders will see any benefit from this.

Southridge Example Transaction

Guys there have been a few questions on how the Southridge deal works and I just wanted to give an example of what the Southridge deal will look like. We have already discussed the basics of the deal and essentially from this point onwards Southridge will buy MSLP stock from time to time at a discount (6% or more) and then sell it on the open market.

The mechanism on how the stock purchase works is

So if for example we take last weeks trading as the 5 days (5th-9th December) then Southridge would purchase shares at $0.0086 per share. It stands to reason that from this point on, as long as they sell the shares for more than $0.0086 they will be in profit. Since the share price right now is $0.0102 then if they sold right now then they would make 18.6% profit (provided the market could support that price for the number of shares they want to sell).



The reason for this post is to just give an example that Southridge will likely always get more than a 6% discount on the stock and that they are a diluter...not an investor in Musclepharm.

When Musclepharm first struck this deal with Southridge I was cautiously optomistic because i thought well at least they arent diluting on the open market....but now it is clear that they are.

And it is this mechanism that makes it possible for Southridge to still profit in a falling PPS environment. As long as they get their discount and the stock doesnt tank in the few days/weeks after they buy then they will profit wether the PPS is $0.01 or $0.005 or $0.001 as long as there are people willing to buy the stock.

Thank you all for reading my ramblings :)

We think this because we see what is happening with the toxic financing, we see that the management have no interest in the shareholders, we see major dilution both necessary and unnecessary, and I for one see real evidence that management are purposefully tring to grant themselves a much larger percentage ownership of the company than they already have. Bigger percentage for them means smaller percentage for anyone else who owns their stock. And i dont think its that they want 50% ownership. I think they want much, much, much more than that.

Which will leave current sharholders with not very much at all. Not that we have much now.

Enjoy watching the fight, GL :)

No worries a couple percent off here and there is no big deal, i make those little mistakes here too after sifting through stats.

I know what the agreement between Southridge & MSLP states...and i accept that it states that its a put and so Musclepharm can theoretically call it in at any time, and however much they want. But I also know how business works and I still think that there are limits....wether contractual / verbal or whatever... that will mean MSLP cant just go to Southridge and demand as much as they want when they want. But thats just matter of opinion and i suppose not worth debating really. I guess there is no point for me to mention that again anyway.

I still wonder why MSLP didnt just go to Southridge earlier in November for the cash detailed in the latest offering rather than wait til now....they must have known they needed the $112k so why not do it in the $0.016 range rather than the $0.010 range and net themselves an extra 60% rather than wait 3 weeks and do it now?? They must have known dilutive actions were going to occur between early november and now that would lower the PPS??

One final thing is that the put notice has to be delivered to Southbridge before the 5 days starts.. so Musclepharm cannot literally just look back on 5 days and decide that two of the closes were poor so dont exercise the put.

Not that it really matters, because unless there is manipulation on either MSLP's side or Southridge's side then its just the general trend of the stock that will matter. There is no evidence that either side or anyone else would try to manipulate the price to try and affect the exercise price and im sure if they did there would be repercussions.

What i meant by the agreement being capable of lowering the PPS is that Southridge is expected to buy shares bit by bit from MSLP at a relatively small discount and then sell on the open market probably pretty soon afterwards and its this action that will lower the price. MSLP also admitted to this possibility of this action lowering the PPS in the S-1.

dont know who you are talking to here but please calm down on the personal insults. If he has taken the time to research a stock and come across things he doesnt understand or finds suspicious then hes entitled to bring it to the board for debate and perhaps some answers.

That is afterall what these boards are for.

I read with interest your posts from last night regarding this, it sure doesnt seem right does it??? Weird that he would have Musclepharm as his employer at all! Then to quickly change it.

Well, its not really my forte to dig into loads of cross-referencing of potential dodgy deals but im glad you found it and would be interested to see how it unfolds.

If they are giving away free shares to a group who is run by someone that works for Musclepharm then thats disgusting.

grrrr!

Hmmm. 7% is the discount not the dilution.

Dilution is the creating and selling of new company stock.

What the MSLP/Southridge deal is based around is dilution entirely.

yip! exactly. This company's stock has never been in a worse position nor future prospects for the stock been so dim :(

I keep trying to explain to people that a strong company ( i use the word strong company loosely but you know what i mean) doesn't mean strong stock. Management wont let this stock be strong because of their ridiculously dilutive financing deals and because IMO its in their best interests to keep it weak.

My bad guys the discount that Southridge gets is 7% discount on the lowest two closing prices of the 5 day period before execution.

Not 6% as i mentioned in my post.

Thank you for pointing that out :)

Sales were increasing well before Deluca came on board.

Do you realise with this bonus being paid to Brad, Cory & Jeremy that if its paid on 2010 v 2011 performance then between the three of them they will receive:

- $480,000 in cash
- 480,000,000 shares of stock minimum (assuming a price of $0.01 per share although IMO they will get more because the PPS will be lower by the time the bonus is paid)

The second filing about diution yesterday was the S-1 form found here http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001144204-11-069262.txt&FilePath=\2011\12\09\&CoName=MUSCLEPHARM+CORP&FormType=S-1&RcvdDate=12%2F9%2F2011&pdf=

Well...the questions I was asking MSLP about details of the Southridge deal are finally made clear. And IMO its not good.

Southridge isnt an "investor" in Musclepharm, in the sense that they are not buying MSLP stock to hold as a long term investment. They are essentially a diluter. In the agreement with Southridge at the start of it they were given 190 Series C Preferred shares for essentially $190,000. They were also given 500,000 5-year warrants to sweaten the deal.

In return Southridge from time to time will purchase MSLP stock at a 6% discount from the lowest two closes out of the 5 trading days prior to the purchase (so minumum 6% discount, potentially much more). Southridge will then sell it on the open market to whoever they want at it's discretion.

But because Southridge is buying stock in small bits over a period of 2 years it doesnt make a bit of difference to them what the stock price is....they will always buy at a discount and IMO try to sell it quite quickly. If they buy at $0.01 and sell at $0.011 then great. If they buy at $0.005 and sell $.0055 then great too.

So whats the advantage to MSLP over this you might ask??? Well IMO it takes the hassle of having to find new dilutive partners and negotiate deals with them and it saves MSLP from having to dilute themselves and pay the fees and give discounts commonly associated with this. It also gives them a guaranteed buyer of the stock...albeit at potentially low prices.. although i still believe if musclepharm went to Southbridge now and said buy $5million worth of stock then Southridge would say no way.

I dont want to "bash" as such but I have seen posters say that the Southridge deal is good for MSLP because it doesnt involve a discount so shouldnt result in a declining PPS but this just isnt true.

MSLP's own words from the filing above:

They sure wont continue to get $0.01 cent for long the way things are going though. But they also dont have to sell all $10mil dollars worth. Bet they will though!

Two filings yesterday detailing further dilution. Not a good day for MSLP common stockholders.

I will talk about the 8-K regarding The Carriage Group first.

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8284653-944-6345&type=sect&dcn=0001144204-11-069233

basically what has happened here is that on July 7th Carriage bought 20 million shares from MSLP at 2.5cents a share. At this time the share price was trading between 3 & 4 cents a share so Carriage was buying at a discount.

Fast Forward to early december and the share price is at an all time low and struggling to hold 1 cent. Carriage says no way MSLP...we want compensation... so MSLP gives them 20 million extra shares for free.

Wish us common shareholders had protection agains dilution like that.

lol yeah at least theres that! thanks for the hug it made me feel better :P

Jeremy DeLuca does have the same bonus as Brad & Cory unfortunately. I see that in the S-1 they dont mention the bonus but in Deluca's Employment Agreement it is clearly there.

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8243379-363667-402409&type=sect&dcn=0001144204-11-064430

never!

its alright, they are very mean to me always...already blocked me on facebook, Cory has me on his email block list and now twitter :(

oh well! :P

looks like i dont owe you an apology :P he blocked me within an hour



how dare i ask a question about finances!

okay i tried...@danielpeterso11 is me. not sure if it worked though. ive never used twitter before.

tweeted can you clarify if your new bonus is $10k in cash and $100k in shares for each extra mil MSLP makes? So $110k for each mil?

tweeted and also is the bonus based on 2010 v 2011 performance? And when will it be paid to you? thanks!

meh...alright i will make a twitter account just for this! you could do it for me you know you meanie :P

Totally agree. Cory Gregory is apparently the IR contact at Coryg@musclepharm.com but he doesnt reply :(

oh. What did you mean by

?

By the way that certainly does not mean that the bonus will be based on 2011 vs 2012. Its completely ambiguous because although the "This Agreement shall be effective retroactively commencing on January 1, 2011 and shall continue until December 31, 2015" it then goes on to say that "For each one million dollars ($1,000,000) in revenue in excess of the revenue reported for the Company’s prior fiscal year"

If thats all you are basing your assertions on then i still think its unclear what year the bonus plan will be based on.

could you show me where you saw the bonus plan is being paid on 2010 v 2011 please?

I was kind of hoping i was wrong and it was 2011 v 2012

thanks!

agree completely! I have said several times here that it just takes a couple of lines from Musclepharm to clear this up. But of course they dont want to!

I also just wanted to point out that even if the guys really did get a TOTAL of $100k worth of shares each as their bonus (which honestly i see no evidence to support this whatsoever...the language was very clear to me) then it still takes them well over their 5m share bonus "cap" in their 2010 plan.

So really I dont understand your argument regarding the 5 million share "cap".

If they give themselves $300k worth of shares at $0.01 then thats still 30million shares.

So they have to raise that 5 million regardless.

But since its not a real "cap" and they can change it to whatever they want, whenever they want, its not an issue.

The stock price is so low...and falling...because of fear of dilution.

Nobody can be sure that the 1% of the company they buy now wont be worth 0.01% in a years time.

For whatever the reasons for the dilution, potential buyers are scared because nobody knows where they stand and management wont tell us.

Good advice, nobody likes to lose money, but hopefully nobody has invested anything more than very high risk (or even "lotto") money in a penny stock.

For all of our sakes I hope im worng about the way the management is going.

We may get a very pleasant surprise and discover that the bonuses only start 2011 v 2012. I doubt it, but its possible.

I see your point, and yes i agree with your analysis they could do that and do very well.

That is the big question though... WHY are they preferring to have shares as bonuses rather than cash??? It's obviously down to personal opinion but I believe they want ownership of their little baby Musclepharm. Which is fair enough they have worked hard but it has all been funded through us shareholders.

So with regards to your suggestion while I agree its a sound plan I dont see how its "better" for them to do this, when they can just dilute dilute dilute like they have been doing when they need the cash. Then when they are profitable (which in all likelihood will be 2012 IMO) and dont need equity financing just take the company, or the majority of it, for themselves.

I think in the end they just want to own their company as a private company...or as close to it as they can get... and do what they want. I think they want the lions share of the profits, and they dont want annoying shareholders questioning them on their moves.

Oddly enough I was thinking about this last night....that when the time comes that this stock is triple zero or we have all been reversed out almost completely... would it be worth trying to organise a class action if it is proved that management have diluted out shareholders so that they can give themselves a huge percentage ownership of the company.

I suppose we should point out that because Musclepharm wont reply to our questions on the bonus...it is still unclear what years the bonus will operate from.

If it is 2011 v 2012 then the 460million shares dont really come into it...because it will be future growth they are bonused on. If its 2010 vs 2011 then clearly they know that they will receive over 50% of the company's shares as a bonus, which yes they have totally disregarded their fiduciary duty.

Well hopefully since you put $175k into this it means you are much richer than I and can still carry on happily. I only invested $30k into this but it still isnt nice to see whats happening here! :D

The worst thing is we shouldnt have to disagree on the bonus plan. Musclepharm should answer our questions....this one I have asked them a total of 27 times via email and 5 times over the phone. No response and management is always "unavailable".

A simple one sentence answer from Musclepharm would end this debate.

But we both know that with the total voting control that Brad & Cory have they can do anything they want. Authorised shares dont mean squat they have already raised it twice this year and they can do it a hundred times more if they want.

The 2010 bonus plan is just that...the 2010 plan...but with stockholder approval (ie Brad & Cory's approval) this also can be changed at any time they want to anything they want.

I read with interest your other reply to me on dilution, i do want to respond to it and will do later today :)

GL with your investment.

Thanks jwblue!

You forgot about Jeremy Deluca's bonus...he gets the same deal as Brad & Cory!

But yeah if their bonus is 2010 v 2011 and the stock is around $0.01 then it should be around 160m shares each.

And I agree it should be in their best interest after that point to make sure the shareprice stays high. Unless they dont want the shares to sell on, ever, and they just want to own the majority of Musclepharm once it is big and profitable.

Thats what I fear they may be doing, giving themselves shares because they want ownership of Muslcepharm for themselves, not for the rewards to be shared with shareholders. They will be millionaires because they can then keep almost all of the profits from Musclepharm Corp and not have to worry about giving any to pesky common shareholders. At present time they only own about 10% of the common shares (or 10% of the company) - IMO they want that to change bigtime.

What I dont understand, is that if they have this fantastic "up to $10 million" deal with Southridge as detailed in their Nov 4th 8-K below then why bother with this TSX deal at all?

If MSLP really had control over what dates Southridge must buy their stock, then they could have got much more than .009 per share by executing some of their southridge puts earlier in November.

I guess the Southridge deal isnt as free and easy as some people think. I asked MSLP for clarification on how the Southridge puts can be executed but of course didnt get a response.

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8224843-958-12166&type=sect&dcn=0001144204-11-061477

Musclepharm management doesnt care how many shares they have to dilute to get the money they need. If they need to dilute a million shares to get $100k then fine. If they need to dilute 10million or 20 million thats okay too becuase no matter how many shares are out there, management still has complete voting rights and always will.

They only thing they may be concerned about now, is that soon there may not be any buyers at all to support the stock. Dilution is tanking the stock at an ever increasing rate and potential buyers are very wary.

But I think that it doesnt matter one bit to MSLP management if the stock price is 10 cents or .0010 as long as they can get Musclepharm to profitability because at the end of it they will dilute/RS whatever it takes to make sure they own almost all of MSLP shares.

lol for once me and you agree :D I think MSLP did well to sell 42million shares at .009

For sure the price is heading much much lower than that, and youre right dilution of 42million onto an ever decreasing number of people willing to buy would tank the stock faster.

I wonder why they needed to deal with TSX though? Why not just exercise some of their put options with Southridge a few weeks ago when the stock was stronger?? They would have got much more than .009?

I honestly agree that although now Musclepharm does need to dilute to pay the bills, that at some point in 2012 they will be profitable and the need for dilution will cease.

But I think they dilution will continue, partly because of managements huge bonuses that they want to be paid in shares and not cash.

I truly think that management sees that Musclepharm is soon to be profitable and doesnt want to share the pie with shareholders. So whilst now they dilute out of necessity, they will continue dilution anyway because they want the company for themselves. They they will dilute to give themselves a huge percentage ownership of the company.

I dont think they want to be stock millionaires. They want to be owners of Musclepharm millionaires.

They dont even need to do an RS.... they can do whatever they want with the share structure because of their complete voting control of the stock to make sure that Odessa never owns more than a fraction of the company.

Hi all decided to take a break from my "negative" posts here for a few days, to give you longs a break :P

oldengray why are you so convinced this is JMJ?? Just cos of the EFFECT notice? Musclepharm dilutes directly into the market every month.

Dont forget that 5million shares now is only $50,000 this is normal dilution for MSLP. Maybe it was a little less noticable a year ago when $50,000 only needed a few hundred thousand shares.

I honestly dont think this is anything other than normal, regular, MSLP dilution.

Agree continued selling (dilution included) has resulted in this low PPS.

Accelerated sales growth has already occured hugely and still the stock remains low because of continued selling of stock. If the selling of stock (dilution included) doesnt stop then the price will continue to fall IMO.

I dont see the selling of stock slowing down, indeed it seems that it has to accelerate as the PPS falls and Musclepharm sell more and more stock to fund the company, pay the bonuses or as part of the Southridge deal.

Just one thing about Walmart...until we know when, or if, MMA/MSLP supplements will hit Walmart and in what quantities and what cut MSLP will take then its difficult to factor in the value that Walmart would bring to Musclepharm Corp & the stock.

One thing Musclepharm does well is branding and packaging, it really stands out.

I was a little concerned that MMA may brand the products to their own specification so I am pleased that they still have the MP logo and Musclepharm Green packaging.

Its certainly noticable and looks very cool IMO.

Oh I have no doubt that MMA already has links with Walmart, in fact Walmart already carries some of MMA's clothing line. Hopefully its correct that Walmart will soon carry MMA supplements too and, and they will PR it well. I will ask them a couple of questions through their info email address.

I would like to see something from MSLP detailing what their "cut" of the action is from any future MMA supplement sales...wether its through Walmart or anywhere else for that matter.

Thanks Oldengray. I will email them too i have a couple of other questions. Good news though if it happens.