Item
1.01 Entry into a Material Definitive Agreement.
As
previously disclosed by MusclePharm Corporation (the “Company”) on a Current Report on Form 8-K filed with the U.S. Securities
and Exchange Commission (the “SEC”) on June 9, 2022 (the “June 8-K”), as of June 3, 2022, the Company entered
into an Amended and Restated Securities Purchase Agreement (the “Amended and Restated Securities Purchase Agreement”) with
certain accredited and institutional investors, including certain investors from the Company’s October 2021 private offering of
securities (the “October Offering”), which amends and restates the October 2021 Securities Purchase Agreement to, among other
things, allow for the issuance of additional senior secured notes and warrants.
Pursuant
to the Amended and Restated Securities Agreement, effective as of June 10, 2022, the Company consummated the transactions contemplated
by the Amended and Restated Securities Purchase Agreement and sold an aggregate of $3,081,875 in principal amount 20% Original Issue
Discount Senior Secured Notes (the “June Notes”), resulting in gross proceeds to the Company of $2,465,500, exclusive of
placement agent commission and fees and other offering expenses, and warrants (the “June Warrants”) to purchase up to 22,013,393
shares (the “Warrant Shares”) of the Company’s common stock (the “June Offering”).
Subject
to certain exceptions, the June Notes accrue no interest, mature six months after issuance, or December 10, 2022, and are secured by
the same collateral that secured the notes issued in the October Offering (the “October Notes” and together with the June
Notes, the “Notes”). The June Warrants are exercisable for five years from the date of issuance at an exercise price of $0.231
per share, subject to adjustment. If at any time following the six-month anniversary of the date of issuance of the June Warrants, a
registration statement covering the resale of the Warrant Shares is not effective, the holders may exercise the June Warrants by means
of a cashless exercise. The Company is prohibited from effecting an exercise of the June Warrants to the extent that, as a result of
such exercise, the holder together with the holder’s affiliates, would beneficially own more than 4.99% of the number of shares
of the Company’s common stock outstanding immediately after giving effect to the issuance of the Warrant Shares upon exercise of
the June Warrants.
As
a result of the issuance of the June Warrants, the exercise price of the warrants issued as part of the October Offering was adjusted
from $0.7794 to $0.231 per share.
As
previously disclosed in the June 8-K, in connection with the closing of the June Offering, the Company:
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amended
(i) the convertible secured promissory note issued to Ryan Drexler, the Company’s Chief Executive Officer and Chair of the
Board of Directors, on November 29, 2020 (as amended on August 13, 2021) in the principal amount of $2,871,967 (the “Drexler
November Note”) and (ii) the convertible secured promissory note issued to Ryan Drexler on August 13, 2021 in the principal
amount of $2,457,549 (the “Drexler August Note” and together with the Drexler November Note, the “Drexler Notes”)
to extend the maturity date of the Drexler Notes to June 10, 2025; |
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entered
into an amendment to Ryan Drexler’s Amended and Restated Employment Agreement dated February 1, 2018 (the “Drexler Employment
Agreement”) pursuant to which Mr. Drexler’s cash compensation, including base salary and bonus, was decreased to $250,000
annually while any Notes remain outstanding; and |
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appointed
Sabina Rizvi, the Company’s President and Chief Financial Officer, as a member of the board of directors of the Company. |
The
foregoing description of the Amended and Restated Securities Purchase Agreement, the June Warrants, the June Notes and the Waiver and
Amendments is not complete and is qualified in its entirety by reference to the full text of the forms of the Amended and Restated Securities
Purchase Agreement, the June Warrants, the June Notes, and the Waiver and Amendments copies of which are filed as Exhibits 10.1, 10.2,
10.3 and 10.4, respectively, to the June 8-K and are incorporated by reference herein. The foregoing description of the amendments to
the Drexler November Note and Drexler August Note is not complete and is qualified in its entirety by reference to the full text of the
forms of the amendments to the Drexler November Note and Drexler August Note, copies of which are filed as Exhibits 10.5 and 10.6, respectively,
to this Current Report on Form 8-K.