Muscle Pharm Corporation (MSLPQ)

[PeonyVMW]

Agreed, SLC. Perhaps one of the most frustrating aspects of this proposed restructuring is that the legal costs are wiping out the profitable efforts of the new management team. Included is a link to the June operating performance (including financial statements)

MSLP is blazing past $1.5M in legal fees cumulatively since the Ch. 11 filing. Can you see a situation where a company dealing with wholesale whey protein costs nearly doubling since 2019 can survive the stress test of COGS doubling and legal expenses devouring gross profit?

Reading through the court docket on Stretto, it looks like Drexler is relentlessly throwing everything he can as a legal impediment to a) invalidate the Intercreditor and Subordination agreement that he signed to receive funding from Empery and b) tie up the parties attempting to use Hilco Corporate Finance LLC as the investment banker to run a timely auction. Like being caught in a whirlpool and your partner is trying to hold your head under water so you can't climb out.

Court filings by Empery call out that one prospective bidder has already communicated their withdrawal from the auction based on the uncertainty surrounding the asset sale. And to be clear - not all assets are up for sale. White Winston has carved out D&O litigation claims prior to 2018 (based on last month's SEC settled complaint, looks like a rewarding move for WW), there is a pool of litigation for creditors, etc. So when (if?) the auction arrives late this summer, how much are the copyrights, trademarks and trade dress of MP really worth? Particularly if any goodwill has been potentially poisoned by Drexler's behaviour towards all those stiffed vendors

It may still be listed as a Chapter 11, but I agree SLC - it's going to look like a liquidation. Empery can be a stalking horse, but they may find themselves as the only serious bidder. And as for your final point, that the corporate entity may get shopped around as a vehicle for something else to reverse merge to, would be quite poetic. This is precisely how the stock ticker MSLP came to be:

"Rather than go through the onerous IPO process, MusclePharm paid $25,000 for a dormant public company, “isometric training technique” marketer Tone in Twenty, and changed its ticker symbol to MSLP. Once public, MusclePharm began making deals with outfits that buy stock from companies at a huge discount then flip it to individuals. “Brad needed to raise a sensational amount of money,” says William Bossung, who was part of the investor group that helped MusclePharm get listed. One financier paid off $375,000 of the World Extreme Cagefighting debt in exchange for 7.8 million shares. Another, who’d turned to penny stocks after being barred from the hedge fund business, acquired about 200 million shares for as little as three-tenths of a penny each." Source: here

That price fetched for a penny stock listing isn't going to make a dent in the total amounts owing.

The operating performance based on prior, SEC-sanctioned management of this company is a black hole for retail investors, with MP in the middle.