Current Report Filing (8-k)
August 27 2020 - 3:36PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, DC
20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
August 21,
2020
Date of report
(date of earliest event reported)
MusclePharm
Corporation
(Exact name of
registrant as specified in its charter)
Nevada
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000-53166
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77-0664193
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(State or other
jurisdictions of incorporation or organization)
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(Commission File
Number)
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(I.R.S. Employer
Identification No.)
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4400 Vanowen Street, Burbank, CA 91505
(Address
of principal executive offices) (Zip Code)
(800) 292-3909
(Registrant’s
telephone number, including area code)
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrants under any of the following
provisions:
☐
Written communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
☐
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
☐
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to
Section 12(b) of the Act:
Title of each
class
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Trading
Symbol(s)
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Name of each exchange on which
registered
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N/A
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Indicate by check mark whether the
registrant is an emerging growth company as defined in Rule 405 of
the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of
this chapter).
Emerging growth company
☐
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive
Agreement.
On August 21,
2020, MusclePharm Corporation (the “Company”) issued to
Ryan Drexler, the Company’s Chief Executive Officer,
President and Chairman of the Board of Directors (the
“Holder”), an amended and restated convertible secured
promissory note (the “Refinanced Convertible Note”) in
the original principal amount of $2,735,199, which amends and
restates (i) a secured revolving promissory note dated as of
October 4, 2019 (the “Revolver Note”), (ii) a
collateral receipt and security agreement dated as of December 27,
2019 (the “Bond”) and (iii) a convertible secured
promissory note dated as of November 8, 2017 (the
“Convertible Note”, and together with the Revolver Note
and the Bond, collectively, the “Prior
Notes”).
The Refinanced
Convertible Note bears interest at the rate of 12% per annum.
Interest accrues and is to be paid in kind by adding such interest
to the unpaid principal amount of the Refinanced Convertible Note,
compounded annually. Both the principal and the interest under the
Refinanced Convertible Note are due on November 1, 2020 (the
“Maturity Date”), unless converted
earlier.
On the
Maturity Date, the Holder may, upon written notice to the Company,
convert the outstanding principal and accrued interest into shares
of the Company’s common stock, $0.001 par value per share
(the “Common Stock”), at a conversion price equal to
the greater of (i) the closing price per share of the Common Stock
on the last business date immediately preceding the Maturity Date
and (ii) seventeen cents ($0.17), in each case rounded down to the
nearest whole share. The Company may prepay the Refinanced
Convertible Note by giving the Holder between 15 and 60 days’
notice depending upon the specific circumstances, subject to the
Holder’s conversion right.
The Refinanced
Convertible Note contains customary events of default, including,
among others, the failure by the Company to make a payment of
principal or interest when due. Following an event of default, at
the option of the Holder and upon written notice to the Company, or
automatically under certain circumstances, all outstanding
principal and accrued interest will become due and payable. The
Refinanced Convertible Note also contains customary restrictions on
the ability of the Company to, among other things, grant liens or
incur indebtedness other than certain obligations incurred in the
ordinary course of business. The restrictions are also subject to
certain additional qualifications and carveouts, as set forth in
the Refinanced Convertible Note. The Refinanced Convertible Note is
subordinated to certain other indebtedness of the
Company.
In connection
with the issuance of the Refinanced Convertible Note, the Company
and Mr. Drexler entered into a Fourth Amended and Restated Security
Agreement (the “Amended Security Agreement”) to amend
and restate the Third Amended and Restated Security Agreement,
pursuant to which the Prior Notes were secured by all of the assets
and properties of the Company and its subsidiaries whether tangible
or intangible, to reaffirm Mr. Drexler’s continuing first
priority lien (except as to certain excluded property) granted
therein.
A copy of each of the
Refinanced Convertible Note and the Amended Security Agreement is
attached to this Current Report on Form 8-K as Exhibit 10.1 and
Exhibit 10.2, respectively, each of which is incorporated herein by
reference as though fully set forth herein. The foregoing summary
descriptions of the Refinanced Convertible Note and the Amended
Security Agreement are not intended to be complete, and are
qualified in their entirety by the complete text of
the Refinanced Convertible
Note and the Amended Security
Agreement.
Item 2.03 Creation of a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
The
information set forth in Item 1.01 is incorporated by reference
herein.
Item 3.02 Unregistered Sales of Equity
Securities.
The
information set forth in Item 1.01 is incorporated by reference
herein.
The Company
offered and sold the Refinanced Convertible Note to the Holder in
reliance on the exemption from registration provided by Section
4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”). Neither the Refinanced Convertible
Note nor the underlying shares of common stock issuable thereunder
have been registered under the Securities Act or may be
offered or sold in the United States absent registration or an
applicable exemption from registration
requirements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No.
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Description
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Amended and
Restated Convertible Secured Promissory Note, dated August 21,
2020, between MusclePharm Corporation and Ryan
Drexler
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Fourth Amended and Restated
Security Agreement, dated August
21, 2020, between MusclePharm Corporation and Ryan
Drexler
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MUSCLEPHARM
CORPORATION
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By:
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/s/ Ryan
Drexler
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Name: Ryan
Drexler
Title: Chief Executive
Officer
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Date: August 27,
2020
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