MusclePharm Corp (OTCMKTS:MSLP) has been suffering from mismanagement for some time now. The company has decided to take some initiatives to take care of the problem. The current reforms include:
- The resolution of an investigation initiated by the SEC. The agreement is set out in a way that it would not have adverse effects on the company’s financial health or operations.
- Governance initiatives to help the company achieve its growth objectives.
MusclePharm’s management had been unable to keep product pricing under control in FY2014. The company also faced sell-through problems, which further let pricing loose. The CEO of the company, Brad Pyatt, announced that his company has experienced growth since its inception in 2008. However, to prepare for the upcoming challenges the company needs to strengthen the board and management teams. He also announced that there will be additional best governance practices involved to ensure long-term success.
As per the new reforms, there will now be seven directors on the board, out of which five would be independent. Additionally, the role of chairman and CEO would also be split into two positions. John Price has been promoted to be the CFO, with a complete auditing team at his disposal. The changes reflect on the fact that the company believes in adding more heads to improve governance, rather than reducing them. How this turns out, would have to be seen.
MusclePharm is said to have reached an agreement with the SEC as well, but the details of the agreements have to be approved by the commissioners as well. However, some of the ex-executives of the company may still face charges of violating federal securities laws. If this happens, the company, as per Denver law, will be required to provide the executives with funds for the lawsuits.
MusclePharm Corp (OTCMKTS:MSLP) closed at $4.65, after losing 4.12% on May 13. The company has 13.47 million shares being traded in the market, with a 52-week range of $2.78-$14.20.