As filed with the Securities and Exchange Commission on October 26, 2012

RegistrationNo. 333- 

MusclePharmCorporation

(Exact nameof registrant as specified in its charter)

4721 IrontonStreet, Building A

Denver, Colorado80239

Telephone:(303) 396-6100

(Address, includingzip code, and telephone number, including area code, of registrant’s principal executive offices)

Brad J. Pyatt

Co-Chairman,Chief Executive Officer and President

MusclePharmCorporation

5348 VegasDrive

Las Vegas,Nevada 89108

Telephone:(702) 953-1890

(Name, address,including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximatedate of commencement of proposed sale to the public:

As soon as practicableafter this Registration Statement is declared effective.

If any of thesecurities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933, check the following box:  o

If this Form isfiled to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please checkthe following box and list the Securities Act registration statement number of the earlier effective registration statement forthe same offering. o

If this Form isa post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.o

If this Form isa post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.o

Indicate bycheck mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reportingcompany. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reportingcompany” in Rule 12b-2 of the Exchange Act.

CALCULATIONOF REGISTRATION FEE

The Registranthereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrantshall file a further amendment which specifically states that this Registration Statement shall thereafter become effective inaccordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall becomeeffective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

Shares

Common Stock

MusclePharm Corporation is offering       shares of its common stock pursuant to this prospectus. We expect to effect a 1-for-650 reverse stock split of our common stockprior to offering these securities. Information in this prospectus is provided on a post-reverse stock split basis giving effectto such 1-for-650 reverse stock split as if it had occurred prior to the date hereof unless otherwise indicated.

Our common stock is presently quotedon the OTCBB under the symbol “MSLP.OB”. We have applied to list our common stock on The NASDAQ Capital Market underthe symbol “MSPH”. On October 25, 2012, the last reported sale price for our common stock on the OTC QB was $3.45per share after giving pro forma effect to the 1-for-650 reverse stock split of our common stock.

Our business and an investmentin our securities involve a high degree of risk. See “Risk Factors” beginning on page 7 of this prospectus for a discussionof information that you should consider before investing in our securities.

Neither the Securities and ExchangeCommission nor any state securities commission has approved or disapproved of these securities or determined if this prospectusis truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters may also purchaseup to an additional       shares of common stock from us at the public offering price, less the underwriting discount, within 45 daysfrom the date of this prospectus to cover over-allotments, if any.

The underwriters expect to deliverthe shares against payment therefor on or about , 2012.

The date ofthis prospectus is             , 2012

TABLE OFCONTENTS

You should rely only on the informationcontained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or made availableto you. We have not, and the underwriters have not, authorized anyone to provide you with any information other than that containedin this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibilityfor, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus mayonly be used where it is legal to offer and sell shares of our common stock. The information in this prospectus is accurate onlyas of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock.Our business, financial condition, results of operations and prospects may have changed since that date. We are not, and the underwritersare not, making an offer of these securities in any jurisdiction where the offer is not permitted.

For investors outside the UnitedStates: We have not and the underwriters have not done anything that would permit this offering or possession or distributionof this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outsidethe United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relatingto, the offering of the shares of common stock and the distribution of this prospectus outside the United States.

RISK FACTORS

Any investment in our commonstock involves a high degree of risk. Investors should carefully consider the risks described below and all of the informationcontained in this prospectus before deciding whether to purchase our common stock. Our business, financial condition and resultsof operations could be materially adversely affected by these risks if any of them actually occur. This prospectus also containsforward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipatedin these forward-looking statements as a result of certain factors, including the risks we face as described below and elsewherein this prospectus.

Risks Related to Our Businessand Industry

Our independent auditors haveexpressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

As reflected in the accompanyingunaudited interim consolidated financial statements, we incurred a net loss of approximately $9.9 million for the six months endedJune 30, 2012, and we had a working capital deficit and stockholders’ deficit of approximately $12.7 million and $11.0 millionrespectively, at June 30, 2012. Also as reflected in the accompanying financial statements we incurred a net loss of approximately$23.3 million and used net cash in operations of approximately $5.8 million for the year ended December 31, 2011, and had a workingcapital deficit and stockholders’ deficit of approximately $13.7 million and $13.0 million respectively, at December 31,2011. These factors raise substantial doubt about our ability to continue as a going concern.

In their report dated April 13,2012, except for note 1 as to which the date is June 28, 2012, our independent auditors stated that our financial statements forthe period ended December 31, 2011, were prepared assuming that we would continue as a going concern, which contemplates the realizationof assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include anyadjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary shouldwe be unable to continue as a going concern.

Our ability to continue operationsis dependent on management’s plans to raise more capital, which include this offering, until such time that funds providedby operations are sufficient to fund working capital requirements.

In addition to the net proceedsfrom this offering, we could require additional funding to finance the growth of our future operations as well as to achieve ourstrategic objectives. There can be no assurance that future financing will be available in amounts or terms acceptable to us,if at all.

Our business and operationsare experiencing rapid growth. If we fail to effectively manage our growth, our business and operating results could be harmed.

We have experienced and expect tocontinue to experience rapid growth in our operations, which has placed, and will continue to place, significant demands on ourmanagement, and our operational and financial infrastructure. If we do not effectively manage our growth, we may fail to attainoperational efficiencies we are seeking, timely deliver products to our customers in sufficient volume or the quality of our productscould suffer, which could negatively affect our operating results. To effectively manage this growth, we expect we will need tohire additional persons, particularly in sales and marketing, and we will need to continue to improve significantly our operational,financial and management controls and our reporting systems and procedures. These additional employees, systems enhancements andimprovements will require significant capital expenditures and management resources. Failure to implement these proposed growthobjectives would likely hurt our ability to manage our growth and our financial position.

Our failure to respond appropriatelyto competitive challenges, changing consumer preferences and demand for new products could significantly harm our customer relationshipsand product sales.

The nutritional sports supplementindustry is characterized by intense competition for product offerings and rapid and frequent changes in consumer demand. Ourfailure to predict accurately product trends could negatively impact our products and cause our revenues to decline.

Our success with any particularproduct offering (whether new or existing) depends upon a number of factors, including our ability to:

Products often have to be promotedheavily in stores or in the media to obtain visibility and consumer acceptance. Acquiring distribution for products is difficultand often expensive due to slotting and other promotional charges mandated by retailers. Products can take substantial periodsof time to develop consumer awareness, consumer acceptance and sales volume. Accordingly, some products may fail to gain or maintainsufficient sales volume and as a result may have to be discontinued. In a highly competitive marketplace it may be difficult tohave retailers open stock-keeping units (sku’s) for new products.

Our management has determinedthat our disclosure controls and procedures are ineffective which could result in material misstatements in our financial statements.

Our management is responsible forestablishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the SecuritiesExchange Act of 1934, as amended, which we refer to as the Exchange Act. As of December 31, 2011, our management determinedthat our disclosure controls and procedures were ineffective due to weaknesses in our financial closing process.

We intend to implement remedialmeasures designed to address the ineffectiveness of our disclosure controls and procedures. If these remedial measures are insufficientto address the ineffectiveness of our disclosure controls and procedures, or if material weaknesses or significant deficienciesin our internal control are discovered or occur in the future and the ineffectiveness of our disclosure controls and procedurescontinues, we may fail to meet our future reporting obligations on a timely basis, our consolidated financial statements may containmaterial misstatements, we could be required to restate our prior period financial results, our operating results may be harmed,we may be subject to class action litigation, and if we gain a listing on The NASDAQ Capital Market, our common stock could bedelisted from that exchange. Any failure to address the ineffectiveness of our disclosure controls and procedures could also adverselyaffect the results of the periodic management evaluations regarding the effectiveness of our internal control over financial reportingand our disclosure controls and procedures that are required to be included in our annual report on Form 10-K. Internal controldeficiencies and ineffective disclosure controls and procedures could also cause investors to lose confidence in our reportedfinancial information. We can give no assurance that the measures we plan to take in the future will remediate the ineffectivenessof our disclosure controls and procedures or that any material weaknesses or restatements of financial results will not arisein the future due to a failure to implement and maintain adequate internal control over financial reporting or adequate disclosurecontrols and procedures or circumvention of these controls. In addition, even if we are successful in strengthening our controlsand procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errorsor to facilitate the fair presentation of our consolidated financial statements.

If we fail to comply withthe rules under the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or, if we discover material weaknessesand other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raisingcapital could be more difficult.

If we fail to comply with the rulesunder the Sarbanes-Oxley Act of 2002 related to disclosure controls and procedures, or, if we discover additional material weaknessesand other deficiencies in our internal control and accounting procedures, our stock price could decline significantly and raisingcapital could be more difficult. Moreover, effective internal controls are necessary for us to produce reliable financial reportsand are important to helping prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our businessand operating results could be harmed, investors could lose confidence in our reported financial information, and the tradingprice of our common stock could drop significantly. In addition, we cannot be certain that additional material weaknesses or significantdeficiencies in our internal controls will not be discovered in the future.

Our industry is highly competitive,and our failure to compete effectively could adversely affect our market share, financial condition and future growth.

The nutritional supplement industryis highly competitive with respect to:

Most of our competitors are largermore established and possess greater financial, personnel, distribution and other resources than we have. We face competitionin the health food channel from a limited number of large nationally known manufacturers, private label brands and many smallermanufacturers of dietary supplements.

We rely on a limited numberof customers for a substantial portion of our sales, and the loss of or material reduction in purchase volume by any of thesecustomers would adversely affect our sales and operating results.

For the six months ended June 30,2012, two of our customers accounted for approximately 46% of our sales. Our largest customer for the six months ended June 30,2012, accounted for 35% of our sales. For the year ended December 31, 2011, two customers accounted for approximately 55% of salesand our largest customer represented 41% of our sales. For the year ended December 31, 2010, three customers accounted for approximately67% of our sales and the largest customer accounted for 45% of our sales. The loss of any of our major customers, a significantreduction in purchases by any major customer, or, any serious financial difficulty of a major customer, could have a materialadverse effect on our sales and results of operations.

Adverse publicity or consumerperception of our products and any similar products distributed by others could harm our reputation and adversely affect our salesand revenues.

We believe we are highly dependentupon positive consumer perceptions of the safety and quality of our products as well as similar products distributed by othersports nutrition supplement companies. Consumer perception of sports nutrition supplements and our products in particular canbe substantially influenced by scientific research or findings, national media attention and other publicity about product use.Adverse publicity from these sources regarding the safety, quality or efficacy of nutritional supplements and our products couldharm our reputation and results of operations. The mere publication of news articles or reports asserting that such products maybe harmful or questioning their efficacy could have a material adverse effect on our business, financial condition and resultsof operations, regardless of whether such news articles or reports are scientifically supported or whether the claimed harmfuleffects would be present at the dosages recommended for such products.

We rely on highly skilledpersonnel and, if we are unable to retain or motivate key personnel, hire qualified personnel, we may not be able to grow effectively.

Our performance largely dependson the talents and efforts of highly skilled individuals. Our future success depends on our continuing ability to identify, hire,develop, motivate and retain highly skilled personnel for all areas of our organization, particularly sales and marketing. Competitionin our industry for qualified employees is intense. In addition, our compensation arrangements, such as our bonus programs, maynot always be successful in attracting new employees or retaining and motivating our existing employees. Our continued abilityto compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees.

If we are unable to retainkey personnel, our ability to manage our business effectively and continue our growth could be negatively impacted.

Our management employees includeBrad J. Pyatt, L. Gary Davis, John H. Bluher, Jeremy R. DeLuca and Cory J. Gregory. These key management employees are primarilyresponsible for our day-to-day operations, and we believe our success depends in large part on our ability to retain them andto continue to attract additional qualified individuals to our management team. Currently, we have executed employment agreementswith our key management employees. The loss or limitation of the services of any of our key management employees or the inabilityto attract additional qualified personnel could have a material adverse effect on our business and results of operations.

Our operating results mayfluctuate, which makes our results difficult to predict and could cause our results to fall short of expectations.

Our operating results may fluctuateas a result of a number of factors, many of which may be outside of our control. As a result, comparing our operating resultson a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our futureperformance. Our quarterly, year-to-date, and annual expenses as a percentage of our revenues may differ significantly from ourhistorical or projected rates. Our operating results in future quarters may fall below expectations. Each of the following factorsmay affect our operating results:

Because our business is changingand evolving, our historical operating results may not be useful to you in predicting our future operating results.

The continuing effects ofthe most recent global economic crisis may impact our business, operating results, or financial condition.

The global economic crisis thatbegan in 2008 has caused disruptions and extreme volatility in global financial markets and increased rates of default and bankruptcy,and has impacted levels of consumer spending. These macroeconomic developments could negatively affect our business, operatingresults, and financial condition. For example, if consumer spending decreases, this may result in lower sales.

We may be exposed to materialproduct liability claims, which could increase our costs and adversely affect our reputation and business.

As a marketer and distributor ofproducts designed for human consumption, we could be subject to product liability claims if the use of our products is allegedto have resulted in injury. Our products consist of vitamins, minerals, herbs and other ingredients that are classified as dietarysupplements and in most cases are not subject to pre-market regulatory approval in the United States or internationally. Previouslyunknown adverse reactions resulting from human consumption of these ingredients could occur.

We have not had any product liabilityclaims filed against us, but in the future we may be subject to various product liability claims, including among others thatour products had inadequate instructions for use, or inadequate warnings concerning possible side effects and interactions withother substances. The cost of defense can be substantially higher than the cost of settlement even when claims are without merit.The high cost to defend or settle product liability claims could have a material adverse effect on our business and operatingresults.

Our insurance coverage orthird party indemnification rights may not be sufficient to cover our legal claims or other losses that we may incur in the future.

We maintain insurance, includingproperty, general and product liability, and workers’ compensation to protect ourselves against potential loss exposures.In the future, insurance coverage may not be available at adequate levels or on adequate terms to cover potential losses, includingon terms that meet our customer’s requirements. If insurance coverage is inadequate or unavailable, we may face claims thatexceed coverage limits or that are not covered, which could increase our costs and adversely affect our operating results.

Our intellectual propertyrights are valuable, and any inability to protect them could reduce the value of our products and brand.

We have invested significant resourcesto protect our brands and intellectual property rights. However, we may be unable or unwilling to strictly enforce our intellectualproperty rights, including our trademarks, from infringement. Our failure to enforce our intellectual property rights could diminishthe value of our brands and product offerings and harm our business and future growth prospects.

We may be subject to intellectualproperty rights claims, which are costly to defend, could require us to pay damages and could limit our ability to sell some ofour products.

Our industry is characterized byvigorous pursuit and protection of intellectual property rights, which has resulted in protracted and expensive litigation forseveral companies. Third parties may assert claims of misappropriation of trade secrets or infringement of intellectual propertyrights against us or against our end customers or partners for which we may be liable.

As our business expands, the numberof products and competitors in our markets increases and product overlaps occur, infringement claims may increase in number andsignificance. Intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issuesinvolved, and we cannot be certain that we would be successful in defending ourselves against intellectual property claims. Further,many potential litigants have the capability to dedicate substantially greater resources than we can to enforce their intellectualproperty rights and to defend claims that may be brought against them. Furthermore, a successful claimant could secure a judgmentthat requires us to pay substantial damages or prevents us from distributing products or performing certain services.

An increase in product returnscould negatively impact our operating results and profitability.

We permit the return of damagedor defective products and accept limited amounts of product returns in certain instances. While such returns have historicallybeen nominal and within management’s expectations and the provisions established, future return rates may differ from thoseexperienced in the past. Any significant increase in damaged or defective products or expected returns could have a material adverseeffect on our operating results for the period or periods in which such returns materialize.

We have no manufacturing capacityand anticipate continued reliance on third-party manufacturers for the development and commercialization of our products.

We do not currently operate manufacturingfacilities for production of our products. We lack the resources and the capabilities to manufacture our products on a commercialscale. We do not intend to develop facilities for the manufacture of products in the foreseeable future. We rely on third-partymanufacturers to produce bulk products required to meet our sales needs. We plan to continue to rely upon contract manufacturersto manufacture commercial quantities of our products.

Our contract manufacturers’failure to achieve and maintain high manufacturing standards, in accordance with applicable regulatory requirements, or the incidenceof manufacturing errors, could result in consumer injury or death, product shortages, product recalls or withdrawals, delays orfailures in product testing or delivery, cost overruns or other problems that could seriously harm our business. Contract manufacturersoften encounter difficulties involving production yields, quality control and quality assurance, as well as shortages of qualifiedpersonnel. Our existing manufacturers and any future contract manufacturers may not perform as agreed or may not remain in thecontract manufacturing business. In the event of a natural disaster, business failure, strike or other difficulty, we may be unableto replace a third-party manufacturer in a timely manner and the production of our products would be interrupted, resulting indelays, additional costs and reduced revenues.

A shortage in the supply ofkey raw materials could increase our costs or adversely affect our sales and revenues.

All of our raw materials for ourproducts are obtained from third-party suppliers. Since all of the ingredients in our products are commonly used, we have notexperienced any shortages or delays in obtaining raw materials. If circumstances changed, shortages could result in materiallyhigher raw material prices or adversely affect our ability to have a product manufactured. Price increases from a supplier woulddirectly affect our profitability if we are not able to pass price increases on to customers. Our inability to obtain adequatesupplies of raw materials in a timely manner or a material increase in the price of our raw materials could have a material adverseeffect on our business, financial condition and results of operations.

Because we are subject tonumerous laws and regulations, and we may become involved in litigation from time to time, we could incur substantial judgments,fines, legal fees and other costs.

Our industry is highly regulated.The manufacture, labeling and advertising for our products are regulated by various federal, state and local agencies as wellas those of each foreign country to which we distribute. These governmental authorities may commence regulatory or legal proceedings,which could restrict the permissible scope of our product claims or the ability to manufacture and sell our products in the future.The U.S. Food and Drug Administration, or FDA, regulates our products to ensure that the products are not adulterated or misbranded.Failure to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, productseizures, fines and criminal prosecutions. Our advertising is subject to regulation by the Federal Trade Commission, or FTC, underthe Federal Trade Commission Act. In recent years the FTC has initiated numerous investigations of dietary supplement and weightloss products and companies. Additionally, some states also permit advertising and labeling laws to be enforced by private attorneygenerals, who may seek relief for consumers, seek class action certifications, seek class wide damages and product recalls ofproducts sold by us. Any of these types of adverse actions against us by governmental authorities or private litigants could havea material adverse effect on our business, financial condition and results of operations.

Other Risks and Risks Relatingto this Offering

We may, in the future, issueadditional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share value.

Our articles of incorporation, asamended, authorize the issuance of 2,500,000,000 shares of common stock, 5,000,000 shares of Series A Convertible Preferred Stock,51 shares of Series B Preferred Stock and 500 shares of Series C Convertible Preferred Stock. The future issuance of common stockand preferred stock may result in substantial dilution in the percentage of our common stock held by our then existing stockholders.We may value any common stock or preferred stock issued in the future on an arbitrary basis. The issuance of common stock forfuture services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by ourinvestors, and might have an adverse effect on any trading market for our common stock.

We may issue additional sharesof preferred stock in the future that may adversely impact your rights as holders of our common stock.

Our articles of incorporation, asamended, authorize us to issue shares of preferred stock in various classes. Currently, we have 51 shares of Series B PreferredStock issued and outstanding, which has voting control of the Company. Each share of our Series A Preferred Stock is convertibleinto 200 shares of our common stock. In addition, our board of directors will has the authority to fix and determine the relativerights and preferences of preferred stock, as well as the authority to issue additional shares, without further stockholder approval.As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders preferredrights to our assets upon liquidation, the right to receive dividends before dividends are declared to holders of our common stock,and the right to the redemption of such preferred stock, together with a premium, prior to the redemption of the common stock.To the extent that we do issue such additional shares of preferred stock, your rights as holders of common stock could be impairedthereby, including, without limitation, dilution of your ownership interests in us. In addition, shares of preferred stock couldbe issued with terms calculated to delay or prevent a change in control or make removal of management more difficult, which maynot be in your interest as a holder of common stock.

Our common stock is quotedon the OTCBB which may have an unfavorable impact on our stock price and liquidity.

Our common stock is quoted on theOTCBB. The OTCBB is a significantly more limited market than the New York Stock Exchange or the NASDAQ Stock Market. The quotationof our shares on the OTCBB may result in a less liquid market available for existing and potential stockholders to trade sharesof our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our abilityto raise capital in the future.

Liability of directors forbreach of duty of care is limited.

Under Section 78.138(7) of the NevadaRevised Statutes, all Nevada corporations limit the liability of directors and officers, including acts not in good faith. Ourstockholders’ ability to recover damages for fiduciary breaches may be reduced by this statute. In addition, we are obligatedto indemnify our directors and officers regarding stockholder suits which they successfully defend as set forth in Section 78.7502of the Nevada Revised Statutes.

Because we will have broaddiscretion and flexibility in how the net proceeds from this offering are used, we may use the net proceeds in ways in which youdisagree.

We currently intend to use the netproceeds from this offering to repay $3.5 million of debt due upon completion of this offering, for working capital and othergeneral corporate purposes. See “Use of Proceeds” on page 18 of this prospectus. Other than the debt payments, wehave not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes. Accordingly, ourmanagement will have significant discretion and flexibility in applying these proceeds. You will be relying on the judgment ofour management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investmentdecision, to assess whether the net proceeds are being used appropriately. It is possible that the net proceeds will be investedin a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively couldhave a material adverse effect on our business, financial condition, operating results and cash flow.

Future financings throughdebt securities and preferred stock may restrict our operations.

If additional funds are raised througha credit facility or the issuance of debt securities or preferred stock, lenders under the credit facility or holders of thesedebt securities or preferred stock would likely have rights that are senior to the rights of holders of our common stock, andany credit facility or additional securities could contain covenants that would restrict our operations.

Our common stock price maybe volatile and could fluctuate widely in price, which could result in substantial losses for investors.

The market price of our common stockhas historically been and is likely to be highly volatile and could fluctuate widely in price in response to various factors,many of which are beyond our control, including:

If our common stock remainssubject to the SEC’s penny stock rules, broker-dealers may experience difficulty in completing customer transactions andtrading activity in our securities may be adversely affected.

Unless our securities are listedon a national securities exchange, or we have net tangible assets of $5.0 million or more and our common stock has a market priceper share of $5.00 or more, transactions in our common stock will be subject to the SEC’s “penny stock” rules.If our common stock remains subject to the “penny stock” rules promulgated under the Exchange Act, broker-dealersmay find it difficult to effectuate customer transactions and trading activity in our securities may be adversely affected.

Under these rules, broker-dealerswho recommend such securities to persons other than institutional accredited investors must:

As a result, if our common stockbecomes or remains subject to the penny stock rules, the market price of our securities may be depressed, and you may find itmore difficult to sell our securities.

Because certain of our stockholderscontrol a significant number of shares of our common stock, they may have effective control over actions requiring stockholderapproval.

As of October 25, 2012, our directors,executive officers and principal stockholders, and their respective affiliates, beneficially own approximately 21.7% of our outstandingshares of common stock. Also, two of our executive officers own 51 shares of our Series B Preferred Stock, which has voting controlof the Company. As a result, these stockholders, acting together, would have the ability to control the outcome of matters submittedto our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantiallyall of our assets. In addition, these stockholders, acting together, would have the ability to control the management and affairsof our company. Accordingly, this concentration of ownership might harm the market price of our common stock by:

We have not paid dividendson our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future. Any returnon investment may be limited to the value of our common stock.

No cash dividends have been paidon our common stock. We expect that any income received from operations will be devoted to our future operations and growth. Wedo not expect to pay cash dividends on our common stock in the near future. Payment of dividends would depend upon our profitabilityat the time, cash available for those dividends, and other factors as our board of directors may consider relevant. If we do notpay dividends, our common stock may be less valuable because a return on an investor’s investment will only occur if ourstock price appreciates. Investors in our common stock should not rely on an investment in our company if they require dividendincome.

If securities or industryanalysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely,our stock price and trading volume could decline.

The trading market for our commonstock will be influenced by the research and reports that industry or securities analysts publish about us or our business. Wedo not currently have and may never obtain research coverage by industry or financial analysts. If no or few analysts commencecoverage of us, the trading price of our stock would likely decrease. Even if we do obtain analyst coverage, if one or more ofthe analysts who cover us downgrade our stock, our stock price would likely decline. If one or more of these analysts cease coverageof our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn couldcause our stock price or trading volume to decline.

A sale of a substantial numberof shares of our common stock may cause the price of our common stock to decline and may impair our ability to raise capital inthe future.

Our common stock is traded on theOTCBB and, despite certain increases of trading volume from time to time, there have been periods when it could be considered“thinly-traded”, meaning that the number of persons interested in purchasing our common stock at or near bid pricesat any given time may be relatively small or non-existent. Finance transactions resulting in a large amount of newly issued sharesthat become readily tradable, or other events that cause current stockholders to sell shares, could place downward pressure onthe trading price of our stock. In addition, the lack of a robust resale market may require a stockholder who desires to sella large number of shares of common stock to sell the shares in increments over time to mitigate any adverse impact of the saleson the market price of our stock.

If our stockholders sell, or themarket perceives that our stockholders intend to sell for various reasons, including the ending of restrictions on resale of substantialamounts of our common stock in the public market, including shares issued upon the exercise of outstanding options, the marketprice of our common stock could fall. Sales of a substantial number of shares of our common stock may make it more difficult forus to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. We maybecome involved in securities class action litigation that could divert management’s attention and harm our business.

You will experience immediateand substantial dilution as a result of this offering and may experience additional dilution in the future.

You will incur immediate and substantialdilution as a result of this offering. After giving effect to the sale by us of up to   shares offered in this offeringat an assumed public offering price of $ per share, and after deducting the underwriter’s discounts and commissionsand estimated offering expenses payable by us, investors in this offering can expect an immediate dilution of $ per share. Inaddition, in the past, we issued options and warrants to acquire shares of common stock. To the extent these options are ultimatelyexercised, you will sustain future dilution. We may also acquire or license other technologies or finance strategic alliancesby issuing equity, which may result in additional dilution to our stockholders.

Risks Related to Our ReverseStock Split

We intend to effect a 1-for-650reverse stock split of our outstanding common stock immediately prior to this offering. However, the reverse stock split may notincrease our stock price sufficiently and we may not be able to list our common stock on The NASDAQ Capital Market, in which casethis offering will not be completed.

We expect that the 1-for-650 reversestock split of our outstanding common stock will increase the market price of our common stock so that we will be able to meetthe minimum bid price requirement of the Listing Rules of The NASDAQ Capital Market. However, the effect of a reverse stock splitupon the market price of our common stock cannot be predicted with certainty, and the results of reverse stock splits by companiesin similar circumstances have been varied. It is possible that the market price of our common stock following the reverse stocksplit will not increase sufficiently for us to be in compliance with the minimum bid price requirement. If we are unable meetthe minimum bid price requirement, we may be unable to list our shares on The NASDAQ Capital Market, in which case this offeringwill not be completed.

Even if the reverse stocksplit achieves the requisite increase in the market price of our common stock, we cannot assure you that we will be able to continueto comply with the minimum bid price requirement of The NASDAQ Capital Market.

Even if the reverse stock splitachieves the requisite increase in the market price of our common stock to be in compliance with the minimum bid price of TheNASDAQ Capital Market, there can be no assurance that the market price of our common stock following the reverse stock split willremain at the level required for continuing compliance with that requirement. It is not uncommon for the market price of a company’scommon stock to decline in the period following a reverse stock split. If the market price of our common stock declines followingthe effectuation of a reverse stock split, the percentage decline may be greater than would occur in the absence of a reversestock split. In any event, other factors unrelated to the number of shares of our common stock outstanding, such as negative financialor operational results, could adversely affect the market price of our common stock and jeopardize our ability to meet or maintainThe NASDAQ Capital Market’s minimum bid price requirement. In addition to specific listing and maintenance standards, TheNASDAQ Capital Market has broad discretionary authority over the initial and continued listing of securities, which it could exercisewith respect to the listing of our common stock.

Even if the reverse stocksplit increases the market price of our common stock, there can be no assurance that we will be able to comply with other continuedlisting standards of The NASDAQ Capital Market.

Even if the market price of ourcommon stock increases sufficiently so that we comply with the minimum bid price requirement, we cannot assure you that we willbe able to comply with the other standards that we are required to meet in order to maintain a listing of our common stock onThe NASDAQ Capital Market. Our failure to meet these requirements may result in our common stock being delisted from The NASDAQCapital Market, irrespective of our compliance with the minimum bid price requirement.

The reverse stock split maydecrease the liquidity of the shares of our common stock.

The liquidity of the shares of ourcommon stock may be affected adversely by the reverse stock split given the reduced number of shares that will be outstandingfollowing the reverse stock split, especially if the market price of our common stock does not increase as a result of the reversestock split. In addition, the reverse stock split may increase the number of stockholders who own odd lots (less than 100 shares)of our common stock, creating the potential for such stockholders to experience an increase in the cost of selling their sharesand greater difficulty effecting such sales.

Following the reverse stocksplit, the resulting market price of our common stock may not attract new investors, including institutional investors, and maynot satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.

Although we believe that a highermarket price of our common stock may help generate greater or broader investor interest, there can be no assurance that the reversestock split will result in a share price that will attract new investors, including institutional investors. In addition, therecan be no assurance that the market price of our common stock will satisfy the investing requirements of those investors. As aresult, the trading liquidity of our common stock may not necessarily improve.

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This prospectus contains forward-lookingstatements. Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targetsor future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on ourcurrent expectations and projections about future events and they are subject to risks and uncertainties known and unknown thatcould cause actual results and developments to differ materially from those expressed or implied in such statements.

In some cases, you can identifyforward-looking statements by terminology, such as “expects”, “anticipates”, “intends”, “estimates”,“plans”, “potential”, “possible”, “probable”, “believes”, “seeks”,“may”, “will”, “should”, “could” or the negative of such terms or other similarexpressions. Accordingly, these statements involve estimates, assumptions and uncertainties that could cause actual resultsto differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by referenceto the factors discussed throughout this prospectus.

You should read this prospectusand the documents that we reference herein and therein and have filed as exhibits to the registration statement, of which thisprospectus is part, completely and with the understanding that our actual future results may be materially different from whatwe expect. You should assume that the information appearing in this prospectus is accurate as of the date on the front coverof this prospectus only. Because the risk factors referred to above could cause actual results or outcomes to differ materiallyfrom those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on anyforward-looking statements. These risks and uncertainties, along with others, are described above under the heading “RiskFactors” beginning on page 7 of this prospectus. Further, any forward-looking statement speaks only as of the date on whichit is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after thedate on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time,and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor onour business or the extent to which any factor, or combination of factors, may cause actual results to differ materially fromthose contained in any forward-looking statements. We qualify all of the information presented in this prospectus, and particularlyour forward-looking statements, by these cautionary statements.

This prospectus also includes estimatesof market size and industry data that we obtained from industry publications and surveys and internal company sources. The industrypublications and surveys used by management to determine market size and industry data contained in this prospectus have beenobtained from sources believed to be reliable.

USE OF PROCEEDS

We estimate that our net proceedsfrom the sale of the common stock offered pursuant to this prospectus will be approximately $          million, or approximately $         million if the underwriters exercise in full their option to purchase          additional shares, based upon the public offeringprice of $          per share and after deducting the underwriting discount and the estimated offering expenses that are payableby us.

We currently intend to use the netproceeds that we receive in this offering as follows: (i) $3.6 million for working capital; (ii) $3.4 million for repayment ofour outstanding debt balance principal amount of debt held by non-affiliated parties, which will be due upon completion of thisoffering (as set forth below), (iii) to pay interest of approximately $0.1 million, representing interest payable, (iv) $1.4 millionfor aged accounts payable; (v) $6.0 million for inventory and related items; (vi) $2.0 million for international marketing development;and (vii) and the remainder for general corporate purposes.

Our outstanding indebtedness thatwill be repaid is as follows:

PRICE RANGEOF COMMON STOCK

Our shares of common stock werecleared for trading under the symbol “TTWZ:OB” on the OTCBB on November 24, 2008, and later began trading on the OTCBBunder the symbol “MSLP:OB” on April 22, 2010. Prior to this period, there was minimal trading in our common stock.The following table shows the reported high and low bid quotations per share for our common stock based on information providedby the OTCBB. These prices reflect the expected 1-for-650 reverse stock split that we intend to effect prior to the date of thisprospectus.

Quotationson the OTCBB reflect bid and ask quotations, may reflect inter-dealer prices, without retail markup, markdown or commission,and may not represent actual transactions. In periods prior to April 22, 2010, there was no volume in our common stock.

As of October25, 2012, there were approximately 420 holders of record of our common stock. This figure does not take into account those stockholderswhose certificates are held in street name by brokers and other nominees. We estimate that such holders number approximately 3,700.

DIVIDENDPOLICY

We have never declared dividendson our common stock, and currently do not plan to declare dividends on shares of our common stock in the foreseeable future. Weexpect to retain our future earnings, if any, for use in the operation and expansion of our business. Subject to the foregoing,the payment of cash dividends in the future, if any, will be at the discretion of our board of directors and will depend uponsuch factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant byour board of directors.

DILUTION

If you invest in our common stock,your interest will be immediately and substantially diluted to the extent of the difference between the public offering priceper share of our common stock and the pro forma net tangible book value per share of our common stock after giving effect to thisoffering.

Our pro forma net tangible bookvalue as of June 30, 2012 was $(     ) or $(     ) per share of common stock, based upon [   ] shares outstanding, after giving effect toissuances of common stock from July 1, 2012 through and immediately prior to the date of this offering. After giving effect tothe sale of the shares in this offering at the assumed public offering price of $ per share, at June 30, 2012, after deductingunderwriting discounts and commissions and other estimated offering expenses payable by us, our pro forma as adjusted net tangiblebook value at June 30, 2012 would have been approximately , or $ per share. This represents an immediate increase in pro formanet tangible book value of approximately $ per share to our existing stockholders, and an immediate dilution of $   per share to investors purchasing shares in the offering.

Dilution in pro forma net tangiblebook value per share represents the difference between the amount per share paid by purchasers of our common stock in this offeringand the pro forma net tangible book value per share of our common stock immediately after this offering.

The following table illustratesthe per share dilution to investors purchasing shares in the offering:

The information above assumes thatthe underwriters do not exercise their over-allotment option. If the underwriters exercise their over-allotment option infull, the pro forma as adjusted net tangible book value will increase to $ per share, representing an immediate increase to existingstockholders of $ per share and an immediate dilution of $ per share to new investors. If any shares are issued upon exerciseof outstanding options or warrants, new investors will experience further dilution.

CAPITALIZATION

The following table sets forth ourcapitalization as of June 30, 2012:

You should consider this table inconjunction with “Use of Proceeds”, “Description of Securities” and our financial statements and the notesto those financial statements included elsewhere in this prospectus.

MANAGEMENT’SDISCUSSION AND ANALYSIS

OF FINANCIALCONDITION AND RESULTS OF OPERATIONS

The following discussion andanalysis should be read together with our financial statements and the related notes appearing elsewhere in this prospectus. Thisdiscussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “CautionaryNote Regarding Forward-Looking Statements and Industry Data” for a discussion of the uncertainties, risks and assumptionsassociated with these statements. Actual results and the timing of events could differ materially from those discussed in ourforward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewherein this prospectus. All share amounts and per share amounts in “Management’s Discussion and Analysis of FinancialCondition and Results of Operations” reflect the expected 1-for-650 reverse stock split that we intend to effect prior tooffering these securities.

Plan ofOperation

We develop,market and sell athlete-focused, high quality nutritional supplements primarily to specialty resellers. Our propriety and awardwinning products address active lifestyles including muscle building, weight loss, and maintaining general fitness through a dailynutritional supplement regimen. Our products are sold in over 110 countries and available in over 10,000 U.S. retail outlets,including Dick’s Sporting Goods, GNC, Vitamin Shoppe and Vitamin World. We also sell our products in over 100 online channels,including bodybuilding.com, amazon.com, gnc.com and vitacost.com. Internationally, our nutritional supplements are sold in approximately110 countries, and we expect that international sales will be a significant part of our sales for the foreseeable future.

Our primary growth strategy is to:

Our core marketing strategy is tobrand MusclePharm as the “must have” fitness brand for workout enthusiasts and elite athletes. We seek to be knownas the athlete’s company, run by athletes who create their products for other athletes both professional and otherwise.We believe that our marketing mix of endorsers, sponsorships and providing sample products for our retail resellers to use isan optimal strategy to increase sales.

Results of Operations

Six months ended June 30,2012 compared to the six months ended June 30, 2011.

Sales

Sales increased approximately $25.6million or 397%, to approximately $32.0 million for the six months ended June 30, 2012, compared to approximately $6.4 millionfor the six months ended June 30, 2011. The increase in sales was primarily attributable to increased brand awareness, and ourcontinued efforts to expand sales by adding more customers. We have focused on a marketing plan to penetrate the market. As such,new promotional efforts have been made to increase sales by adding new customers and expanding our product line. We have continuedto add new products to meet our customer’s needs. The inclusion of new gel squeeze tubes in various flavors has increasedsales and more customers are now adding the MusclePharm Musclegel® to their shelf line. We have added new sales staff familiarwith international sales, and this effort is now beginning to show results through increased sales in the international markets.Overall, as a direct result of our aggressive marketing plan, our products are currently being offered in more retail stores,both domestic and international, and our products are receiving better shelf placement. All of these efforts resulted in increasedsales.

Cost of Sales

Cost of sales for the six monthsended June 30, 2012, was approximately $25.8 million compared to approximately $4.9 million for the six months ended June 30,2011, an increase of 526%. Cost of sales as a percent of revenue increased from 76% for the six months ended June 30, 2011 to81% of revenue for the six months ended June 30, 2012. This increase was the result of adding Canadian shipping, and product costfor the second quarter of 2012 that had not previously existed, and an overall increase in shipping costs. There was also a slightincrease in product damages in the six months ended June 30, 2012 compared to the six months ended June 30, 2011.

Gross Profit

Gross profit for the six monthsended June 30, 2012 was approximately $6.2 million an increase of approximately $4.6 million over the six months ended June 30,2011, or an increase of 282%. Meanwhile the gross profit percentage decreased to approximately 19% during the six months endedJune 30, 2012 from 24% for the six months ended June 30, 2011 mainly as a result of providing deeper discounts for customer’spurchases in the second quarter of the six months ended June 30, 2012.

General and Administrative Expenses

General and administrative expensesfor the six months ended June 30, 2012, increased to approximately $8.5 million or approximately $4.0 million or 90%, comparedto the six months ended June 30, 2011. The increased sales for 2012 had corresponding increases in the general and administrativeexpenses compared to the six months ended June 30, 2011, mainly for foreign transaction fees and Canadian operations, while thegeneral and administrative costs rose correspondingly to the increase in sales.

Other major increases were approximately$1.8 million in advertising, $.9 million in increases for stock based compensation $.8 million in salaries and benefits, $.2 millionin travel, $.2 million in depreciation and $.1 million in office expenses.

Loss from Operations

The loss from operations for thesix months ended June 30, 2012 was approximately $2.4 million as compared to a loss of approximately $2.98 million for the sixmonths ended June 30, 2011.

Other Expenses

Other net expenses for the six monthsended June 30, 2012 were approximately $7.5 million compared to approximately $9.5 million for the six months ended June 30, 2011.The components of other expenses are shown in the table below:

The decrease in this expense categoryof approximately $2.0 million was mainly attributed to the changes in fair value of derivative contracts and derivative expenseapproximately $2.4 million.

Net Loss

Net loss for the six months endedJune 30, 2012, was approximately $9.9 million, or $(4.92) per share compared to approximately $12.4 million or loss per shareof $(46.41) for the six months ended June 30, 2011.

Other Comprehensive Income

We recognized approximately $.014million of other comprehensive income related to translation adjustments for transactions entered into in Canadian Dollars andtranslated to U.S. Dollars for the six months ended June 30, 2012.

Year ended December 31, 2011compared to the year ended December 31, 2010.

Revenues

Our net revenues were approximately$17.2 million for the year ended December 31, 2011, compared approximately $3.2 million for the year ended December 31, 2010,an increase of 531%. Sales during the year ended December 31, 2011 increased due to our increased advertising and promotion efforts,as well as the change in our manufacturers, which provided more consistent shipments to customers. The sales increase was alsothe result of the significant capital spent on marketing with distributors and marketing and brand recognition with endorsementsand sponsorships.

Cost of Sales

Cost of sales for the year endedDecember 31, 2011 was approximately $14.8 million or 86% of revenue, compared to approximately $2.8 million or 88% of revenuefor the year ended December 31, 2010. This slight decrease was due to efficiencies from the larger scale of our operations.

General and Administrative Expenses

Operating expenses for the yearended December 31, 2011 decreased slightly to $18.6 million, compared to $18.7 million for the year ended December 31, 2010, dueprimarily to an increase in stock based compensation of approximately $3.7 million, an increase in depreciation expense of approximately$0.2 million and an increase in travel, meetings and entertainment of approximately $0.3 million due to our increased activity,offset by a decrease in investment advisory services of approximately $2.4 million, a decrease in research and development costsof approximately $1.2 million and the decrease of advertising expense of $0.9 million.

Operating Loss

Operating loss for the year endedDecember 31, 2011 was approximately $16.2 million, compared to approximately $18.3 million for the year ended December 31, 2010.

Interest Expense

Interest expense for the year endedDecember 31, 2011 was approximately $3.7 million, compared to approximately $0.5 million for the year ended December 31, 2010,due primarily to amortization of the debt discounts and debt issue costs in the year ended December 31, 2011 of $3.5 million andapproximately $0.2 million in interest charges incurred on our debt instruments in the year ended December 31, 2011.

Other Expenses

Other expenses for the year endedDecember 31, 2011 were approximately $7.0 million, compared to approximately $1.3 million for the year ended December 31, 2010,an increase of 538%. The $5.7 million increase in other expenses was primarily due to an increase in derivative expense of approximately$4.7 million, an increase in interest expense of approximately $3.2 million and increases in the losses on settlement of accountspayable of approximately $3.4 million, offset by changes in the fair value of derivative liabilities of approximately $5.3 millionand licensing income of approximately $0.2 million.

Net Loss

Net loss for the year ended December31, 2011 was approximately $23.3 million, or $(53.76) per share, compared to the net loss of approximately $19.6 million or $(309.18)per share, for the year ended December 31, 2010. Inflation did not have a material impact on our operations for the years endedDecember 31, 2011 and 2010.

Liquidity and Capital Resources

The following table summarizes totalcurrent assets, liabilities and working capital deficit at June 30, 2012, compared to December 31, 2011:

Our primary source of operatingcash has been through the sale of equity and the issuance of convertible secured promissory notes and other short term debt asdiscussed below.

At June 30, 2012, we had cash ofapproximately $.3 million and working capital deficit of approximately $12.7 million compared to cash of approximately $.7 millionand a working capital deficit of approximately $13.7 million at December 31, 2011.

Cash provided by operating activitieswas approximately $.4 million for the six months ended June 30, 2012, compared to cash used in operating activities of approximately$2.6 million for the six months ended June 30, 2011. The increase of approximately $3.0 million for the six months ended June30, 2012, compared to the six months ended June 30, 2011, was primarily due to increased payables and deferred revenues of approximately$1.0 million.

Cash used in investing activitiesincreased to approximately $.6 million from approximately $.3 million for the six months ended June 30, 2012 and 2011, due toslightly higher spending on fixed assets. Future investments in property and equipment, as well as further development of ourInternet presence will largely depend on available capital resources.

Cash flows used in financing activitieswere approximately $.3 million for the six months ended June 30, 2012, compared to cash flows provided by financing activitiesof approximately $3.4 million for six months ended June 30, 2011. The approximately $3.7 million decrease was due to the approximately$4.1 million increase in repayments of debt.

Going Concern

As reflected in the accompanyingunaudited interim consolidated financial statements, we had a net loss of approximately $9.9 million for the six months endedJune 30, 2012, and had a working capital deficit and stockholders’ deficit of $12.7 million and approximately $11.0 millionat June 30, 2012 and 2011, respectively. These factors raise substantial doubt about our ability to continue as a going concern.

Our ability to continueour operations is dependent on management’s plans, which include the raising of capital through debt and/or equity marketswith some additional funding from other traditional financing sources, including term notes, sale of aged debt to third partiesin exchange for stock, until such time that funds provided by operations are sufficient to fund working capital requirements.We may need to incur liabilities with certain related parties to sustain our existence.

We will require additional fundingto finance the growth of our current and expected future operations as well as to achieve our strategic objectives. We believeour current available cash along with anticipated revenues will be insufficient to meet our cash needs for the near future. Therecan be no assurance that financing will be available in amounts or terms acceptable to us, if at all.

We anticipate that the net proceedsfrom this offering will fund our operations for approximately [ ] months.

In response to these capital issues,management has taken the following actions:

Financing

Our primary source of operatingcash has been through the sale of equity and the issuance of secured and unsecured promissory notes. We continue to explore potentialsales expansion opportunities in order to boost sales, while leveraging distribution systems to consolidate lower costs. We needto continue to raise capital in order execute the business plan.

Off-Balance Sheet Arrangements

Future minimum annual lease paymentsfor the above leases are approximately as follows:

CriticalAccounting Policies and Estimates

The preparation of financial statementsin conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires managementto exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situationor set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimatecould change in the near term due to one or more future non-conforming events. Accordingly, the actual results could differ significantlyfrom estimates.

Risks and Uncertainties

We operate in an industry that issubject to rapid change and intense competition. Our operations are subject to significant risk and uncertainties including financial,operational, technological, regulatory and other risks, including the potential risk of business failure.

Principles of Consolidation

All intercompany accounts and transactionshave been eliminated in consolidation.

Accounts Receivable and Allowancefor Doubtful Accounts

Accounts receivable represents tradeobligations from customers that are subject to normal trade collection terms. The accounts receivable are sent directly to ourthird party manufacturer and netted with any outstanding liabilities to the manufacturer. Liabilities to the manufacturer totaledapproximately $2.4 million at June 30, 2012, and are included in accounts payable and accrued liabilities. We periodically evaluatethe collectability of our accounts receivable and consider the need to establish an allowance for doubtful accounts based uponhistorical collection experience and specific customer information. Accordingly, the actual amounts could vary from the recordedallowances. There is also a review of customer discounts at the period end and an accrual made for discounts earned but not yetreceived by quarter end.

Fair Value of Financial Instruments

We measure assets and liabilitiesat fair value based on an expected exit price which represents the amount that would be received on the sale of an asset or paidto transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may bebased on assumptions that market participants would use in pricing an asset or liability. We believe the authoritative guidanceon fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basiswhereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchicallevels of inputs to measure fair value:

The following are the major categoriesof liabilities measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011, using quoted prices in activemarkets for identical liabilities (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs(Level 3):

Our financial instruments consistedprimarily of accounts receivable, prepaids, accounts payable and accrued liabilities, debt and customer deposits. Our debt approximatesfair value based upon current borrowing rates available to us for debt with similar maturities. The carrying amounts of our financialinstruments generally approximated their fair values as of June 30, 2012 and December 31, 2011, respectively, due to the short-termnature of these instruments.

Revenue Recognition

We record revenue when all of thefollowing have occurred: (1) persuasive evidence of an arrangement exists, (2) product has been shipped or delivered, (3) thesales price to the customer is fixed or determinable, and (4) collectability is reasonably assured.

Depending on individual customeragreements, sales are recognized either upon shipment of products to customers or upon delivery. For all of our Canadian sales,which represented 2.0% and 0% of sales for the six month periods ended June 30, 2012 and 2011, respectively, and for one of ourlargest domestic customers, which represented 11% and 11% of our sales for the six month periods ended June 30, 2012 and 2011,respectively, and 11% of our sales for the six months ended June 30, 2012, revenue is recognized upon delivery.

We have determined that advertisingrelated credits that were granted to customers fell within the guidance of ASC No. 605-50-55 (“Revenue Recognition”– Customer Payments and Incentives – Implementation Guidance and Illustrations). The guidance indicates that,absent evidence of benefit to the vendor, appropriate treatment requires netting these types of payments against revenues andnot expensing as advertising expense.

We record store support, giveaways,sales allowances and discounts as a direct reduction of sales.

We have an informal seven day rightof return for our products. There were nominal returns for the year ended December 31, 2011 and for the three and six months endedJune 30, 2012.

Foreign Currency

We began operations in Canada inApril 2012. The Canadian Dollar was determined to be the functional currency as the majority of the transactions related to theday to day operations of the business are exchanged in Canadian Dollars. At the end of the period, the financial results of theCanadian operation are translated into the United States Dollar, which is the reporting currency, and added to the U.S. operationsfor consolidated company financial results. The revenue and expense items are translated using the average rate for the periodand the assets and liabilities at the end of period rate. Transactions that have completed the accounting cycle and resulted ina gain or loss related to translation are recorded in realized gain or loss due to foreign currency translation under other incomeexpense on the income statement. Transactions that have not completed their accounting cycle but appear to have gain or loss dueto the translation process are recorded as unrealized gain or loss due to translation and held in the equity section on the balancesheet until such date the accounting cycle of a transaction is complete and the actual realized gain or loss is recognized.

Accounts Receivable

We perform ongoing evaluations ofour customers’ financial condition and generally do not require collateral. Our management reviews accounts receivable periodicallyand reduces the carrying amount by a valuation allowance that reflects management’s best estimate of amounts that may notbe collectible. Allowances, if any, for uncollectible accounts receivable are determined based upon information available andhistorical experience.

Beneficial Conversion Feature

For conventional convertible debtwhere the rate of conversion is below market value, we record a “beneficial conversion feature” (“BCF”)and related debt discount.

When we record a BCF, the relativefair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount isamortized to interest expense over the life of the debt.

Derivative Liabilities

Fair value accounting requires bifurcationof embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of theirfair value for accounting purposes. In determining the appropriate fair value, we use the Black-Scholes option-pricing model.In assessing the convertible debt instruments, our management determines if the convertible debt host instrument is conventionalconvertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not consideredconventional convertible debt, we continue our evaluation process of these instruments as derivative financial instruments.

Once determined, derivative liabilitiesare adjusted to reflect fair value at each reporting period end, with any increase or decrease in the fair value being recordedin results of operations as an adjustment to fair value of derivatives. In addition, the fair value of freestanding derivativeinstruments such as warrants, are also valued using the Black-Scholes option-pricing model.

Debt Issue Costs and Debt Discount

We may pay debt issue costs, andrecord debt discounts in connection with raising funds through the issuance of convertible debt. These costs are amortized overthe life of the debt to interest expense. If a conversion of the underlying debt occurs, a proportionate share of the unamortizedamounts is immediately expensed.

Original Issue Discount

For certain convertible debt issued,we provide the debt holder with an original issue discount. The original issue discount is recorded to debt discount and additionalpaid in capital at an amount not to exceed gross proceeds raised, reducing the face amount of the debt and is amortized to interestexpense over the life of the debt.

Share-Based Payments

Generally, all forms of share-basedpayments, including stock option grants, warrants, restricted stock grants and stock appreciation rights are measured at theirfair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest. Share-basedcompensation awards issued to non- employees for services rendered are recorded at either the fair value of the services renderedor the fair value of the share-based payment, whichever is more readily determinable.

Recent Accounting Pronouncements

In May 2011, the Financial AccountingStandards Board issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common Fair ValueMeasurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles (“GAAP”) and InternationalFinancial Reporting Standards (“IFRS”). ASU 2011-04 includes common requirements for measurement of and disclosureabout fair value between U.S. GAAP and IFRS. ASU 2011-04 requires reporting entities to disclose additional information for fairvalue measurements categorized within Level 3 of the fair value hierarchy. In addition, ASU 2011-04 requires reporting entitiesto make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements. Thenew and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011.

BUSINESS

General

MusclePharm Corporation, a Nevadacorporation (“MusclePharm”, the “Company”, “we”, “us”, or “our”) wasincorporated in the state of Nevada on August 4, 2006, under the name “Tone in Twenty” for the purpose of engagingin the business of providing personal fitness training using isometric techniques. On February 18, 2010, Tone in Twenty acquiredall of the issued and outstanding equity and voting interests of Muscle Pharm, LLC, a Colorado limited liability company, in exchangefor 26,000,000 shares of its common stock. As a result of this transaction, Muscle Pharm, LLC became a wholly owned subsidiaryof Tone in Twenty, and Tone in Twenty changed its name to “MusclePharm Corporation.” Our principal executive officesare located at 4721 Ironton Street, Building A, Denver, Colorado 80239 and our telephone number is (303) 396-6100.

We develop, market and sell athlete-focused,high quality nutritional supplements primarily to specialty resellers. Our products have been formulated to enhance active fitnessregimens, including muscle building, weight loss and maintaining general fitness. Our nutritional supplements are available forpurchase in over 10,000 U.S. retail outlets, including Dick’s Sporting Goods, GNC, Vitamin Shoppe and Vitamin World. Wealso sell our products to over 100 online channels, including bodybuilding.com, amazon.com, gnc.com and vitacost.com. Internationally,our nutritional supplements are sold in approximately 110 countries, and we expect that international sales will be a significantportion of our sales for the foreseeable future.

We started formulating our nutritionalsupplements in 2008 for consumption by active individuals, high performance athletes and fitness enthusiasts. We launched oursales and marketing programs in late 2008 through our internal sales executives and staff targeting specialty retail distributors.

We supply our nutritional supplementsto elite athletes on teams in the National Football League, Major League Baseball and the National Basketball Association, aswell as Ultimate Fighting Championship fighters. While these endorsers and professional sports teams use our products, no endorsementby any of them as to the merits of the securities offered by this prospectus should be inferred.

Our products were created throughour six-stage process using the expertise of distinguished nutritional scientists we have retained and they are typically fieldtested using a pool of several elite athletes on various teams in the National Football League, Major League Baseball and NationalBasketball Association, as well as Ultimate Fighting Championship fighters. We do not directly manufacturer or ship our productsto most of our customers. Rather, we outsource our manufacturing to non-affiliated third parties who fulfill our orders and shipproduct directly to our customers.

We have recently experienced significantgrowth in our product sales. Our net sales for the years ended December 31, 2010 and 2011 were $3.2 million and $17.2 million,respectively. Our net sales for the six months ended June 30, 2011 and 2012 were $6.4 million and $32.0 million, respectively.Additionally, during the second quarter of 2012, we commenced operations in Ontario, Canada, through our subsidiary Canada MusclePharmEnterprises Corp.

At the 2012 Bodybuilding.com SupplementAwards, we received three Awards of Excellence; we received (i) the “Brand of the Year” award, (ii) the “Packagingof the Year” award, and (iii) the “Pre-Workout Supplement of the Year” award for Assault^TM.

Our headquarters in Denver, Coloradohas a state-of-the-art over 30,300 square feet medical and clinical testing department, complete with equipment for measuringand conducting athletic clinical studies and supporting athletes. Our medical and clinical professionals consist of several nationallyrecognized medical doctors and nutritional experts who oversee our product research, formulation, efficacy analysis and testing.

Recent Developments – Conversionof Warrants into Common Stock

In late September 2012, we issued670,364 shares of our common stock to several accredited investors pursuant to conversions of warrants to purchase an aggregateof 946,438 shares of common stock of the Company.

As a result of these warrant conversionsand other extinguishments of derivative liabilities during the quarter ended September 30, 2012, our pro forma adjusted capitalizationas of June 30, 2012 reflects a decrease in stockholders’ deficit from approximately $11,417,000 to approximately $6,815,000and our derivative liabilities as of June 30, 2012 from approximately $7,909,000 to approximately $25,000. All of these stockissuances, warrant conversions and extinguishments of derivative liabilities will be reflected in our financial statements asof and for the three and nine months ended September 30, 2012.

Sales and Distribution

We sell our products both domesticallyand internationally. Domestically, we use three distribution systems:

Internationally, we are continuingour sales expansion in Latin America, the Middle East, Europe, Russia, and the UK, and using Sportika Export as our internationaldistributor that services approximately 110 countries. In addition, we recently launched a corporate partnership with a divisionof Eurpac Services, Inc. to distribute our supplements to approximately 130 U.S. military bases and 360 military stores throughoutthe world. We expect that international sales will represent a significant portion of our sales for 2012 and thereafter.

Our Growth Strategy

Our primary growth strategy is to:

Core Marketing Strategy

Our core marketing strategy is tobrand MusclePharm as the “must have” fitness brand for workout enthusiasts and elite athletes. We seek to be knownas the athlete’s company, run by athletes who create their products for other athletes both professional and otherwise.We believe that our marketing mix of endorsers, sponsorships and providing sample products for our retail resellers to use isan optimal strategy to increase sales.

Sponsorships and Promotions

In 2011, we became the officialsupplement provider and sponsor of the Ultimate Fighting Championship, or UFC. Our sponsorship includes prominent logo placementon the fighting mat, and our branding can be seen on FOX Television Stations, FX Networks, FUEL TV and Pay-Per-View televisionworldwide. The UFC fighters we sponsor feature our brand on their uniforms and we also extensively advertise at the UFC events.

We are also currently engaged invarious in-store promotions, including point-of-purchase stands, aisle displays in retail outlets, as well as sample demonstrationsin Dick’s Sporting Goods, GNC, Vitamin World and Vitamin Shoppe.

In 2011, we launched an advancedwebsite in seeking to tap into the social networking world and to further our brand and consumer awareness. The information inour website is not part of this prospectus. We have included our website address as a factual reference and do not intend it tobe an active link to our website. Also, we currently have over 250,000 fans combined between our company and executive officerFacebook and Twitter accounts.

Industry Overview

We operatewithin the large and growing U.S. nutritional supplements industry. According to Nutrition Business Journal’s 2012 SupplementBusiness Report, our industry generated over $30 billion in sales in 2011 and $28.1 billion in 2010, and is projected to growat an average annual rate of approximately 6.0% through 2020.

According to Nutrition BusinessJournal, sports nutrition products represented approximately 12% of the total sales in the U.S. nutritional supplements industryin 2011, and the category is expected to grow at a 9.1% compound annual growth rate (or CAGR) from 2012 to 2020, representingthe fastest growing product category in the nutritional supplements industry.

We believe there are several keydemographic, healthcare and lifestyle trends driving the continued growth of our industry. These trends include:

Participants in our industry includespecialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing organizations, online retailers, mail-ordercompanies and a variety of other small participants. The nutritional supplements sold through these channels are divided intofour major product categories: vitamins, minerals and health supplements; sports nutrition products; diet products; and otherwellness products. Most supermarkets, drugstores and mass merchants have narrow nutrition supplement product offerings limitedprimarily to simple vitamins and herbs, with less knowledgeable sales associates than specialty retailers.

Our Products

We currently offer 20 athlete-focused,high quality nutritional supplement products. None of our products are formulated to contain substances that have been the subjectof publicized health concerns by the medical community such as ephedra, androstene, androstenedione, aspartame, steroids or humangrowth hormones. Our products are comprised of amino acids, herbs and proteins tested by our recognized scientists, and intendedto be safe and effective for the overall health of athletes. Moreover, our nutritional supplements are intended to enhance theeffects of workouts, repair muscles, and nourish the human body for optimal physical fitness. The following is a brief descriptionof our current products:

MusclePharm Apparel

We granted an exclusive indefinitelicense to market, manufacture, design and sell our existing apparel line. The licensee paid an initial fee of $250,000 in June,2011 and will pay us a 10% net royalty based on the licensee’s net income at the end of each fiscal year. As of June 30,2012, we had not earned any royalty revenue under this licensing arrangement.

Quality in Our Products

In seeking quality in our products,we require that before a product is brought to market, all:

Future Products

New products are derived from a number of sources, includingour management, trade publications, scientific and health journals, consultants and distributors. Prior to introducing new products,we investigate product formulations as they relate to regulatory compliance and other issues. We expect to formulate between 10to 20 new products within the next 12 to 18 months after the date of this prospectus.

Research and Development

Each of our products is the end result of a six stage processinvolving recognized nutrition scientists, doctors and professional athletes. Our expenses for research and development for theyears ended December 31, 2010 and 2011, were approximately $1.3 million and $.1 million, respectively, and $.1 million for thesix months ended June 30, 2012.

Management Information, Internet and Telecommunication Systems

The ability to efficiently manage distribution, compensation,inventory control, and communication functions through the use of sophisticated and dependable information processing systems iscritical to our success.

We continue to invest in applications and integrations to improveand optimize business processes and to increase performance company wide.

Product Returns

We provide an informal seven day right of return for our products.Historically, product returns as a percentage of our net sales have been nominal.

Trademarks and Patents

We regard our trademarks and other proprietary rights as valuableassets and believe that protecting our key trademarks is crucial to our business strategy of building strong brand name recognition.These trademarks are crucial elements of our business, and have significant value in the marketing of our products.

Our policy is to pursue registrations for all of the trademarksassociated with our products. Federally registered trademarks have a perpetual life, provided that they are maintained and renewedon a timely basis and used correctly as trademarks, subject to the rights of third parties to attempt to cancel a trademark ifpriority is claimed or there is confusion of usage. We rely on common law trademark rights to protect our unregistered trademarks.Common law trademark rights generally are limited to the geographic area in which the trademark is actually used, while a UnitedStates federal registration of a trademark enables the registrant to stop the unauthorized use of the trademark by any third partyanywhere in the United States. Furthermore, the protection available, if any, in foreign jurisdictions may not be as extensiveas the protection available to us in the United States.

Although we seek to ensure that we do not infringe on the intellectualproperty rights of others, there can be no assurance that third parties will not assert intellectual property infringement claimsagainst us.

We have obtained U.S. registration on trademarks for 20 of ourproducts. We have abandoned or not pursued efforts to register marks identifying other items in our product line for various reasonsincluding the inability of some names to qualify for registration. We also received federal trademark registration for 20 namesor expressions that we use or intend to use to distinguish ourselves from others. All trademark registrations are protected foran initial period of five years and then are renewable after five years if still in use and every 10 years thereafter.

We have filed for a provisional patent to protect technologyused in certain of our products, including MusclePharm Musclegel® and Re-Con®. The patent was filed in the United Statesas a Patent Cooperation Treaty (PCT) application to secure patent protection worldwide. We currently expect the International SearchReport (ISR)/Written Opinion to issue in December 2012 and publication at the International Bureau in February 2013.

We also have filed for protection of various marks throughoutthe world and are committed to a significant long-term strategy to build and protect the MusclePharm brand globally. The “MusclePharm”mark is pending registration in 14 countries. The mark has been granted final trademark registration in three countries, and webelieve the remaining registrations will be granted within the next several months.

The “MP” logo has been filed and registration grantedin one country. The application for protection of the logo is expected to be filed in the near future in 26 additional countries.Going forward, we expect to seek trademark registration for our best-selling international products.

Competition

We compete with many companies engaged in selling nutritionalsupplements. The sports nutrition business is highly competitive. Most of our competitors have significantly more financial andhuman resources than we do, and have operating histories longer than ours. We seek to differentiate our products and marketingfrom our competitors based on our product quality, the use of sports celebrity endorsers and through our marketing program. Competitionis based primarily on quality and assortment of products, marketing support, and availability of new products. Currently, our maincompetitors are three private companies: Optimum Nutrition, Inc., or Optimum, Iovate Health Sciences, Inc., or IHS, and Bio-EngineeredSupplements and Nutrition, Inc., or BSN. Optimum is a wholly owned subsidiary of Glanbia Nutritionals, Inc., an international nutritionalingredients group. Optimum owns and operates two brands of nutritional supplements (Optimum Nutrition and American Body Building),providing a line of products across multiple categories. IHS is a nutritional supplement company that delivers a range of productsto the nutritional marketplace. Headquartered in Oakville, Ontario, Canada, IHS’s line of products can be found in majorretail stores and include such brands as Hydroxy-Cut™, Cell-Tech™, Six Star Nutrition™. BSN is also a sportsnutrition leader whose top products include No-Explode™ and Syntha Six Protein™.

The retail market for nutritional supplements is characterizedby a few dominant national companies, including GNC, Vitamin World, Vitamin Shoppe, and Great Earth Vitamin Stores. Others havea presence within local markets, such as Vitamin Cottage in Denver, Colorado. Four companies dominate the online channel—bodybuilding.com,vitamins.com (owned by Puritan’s Pride), GNC.com and vitaminshoppe.com, the latter two having retail sales locations as well.

Major competitors in the sports nutrition and weight-loss marketsconsist of companies such as EAS, Inc., Weider Nutrition International, Inc. and Twinlab Corporation, which dominate the marketwith such products as Myoplex (EAS), Body Shaper (Weider) and Ripped Fuel (Twinlab).

We also compete with a number of large direct selling firmsselling nutritional, diet, health, personal care and environmental products, and numerous small competitors. The principal directselling competitors are Amway Corporation, Nature’s Bounty, Inc., Sunrider Corporation, New Vision USA, Inc., Herbalife Internationalof America, Inc., USANA, Inc., and Melaleuca, Inc.

We intend to compete by aggressively marketing our brand, emphasizingour relationships with professional athletes, and maximizing our relationships with those athletes, retail outlets and industrypublications that align with our vision.

Our Manufacturers

We are committed to producing and selling highly efficaciousproducts that are trusted for their quality and safety. To date, our products have been outsourced to a third party manufacturerwhere the products are manufactured in full compliance with the current good manufacturing practice, or cGMP, standards set bythe U.S. Food and Drug Administration, or FDA.

We use four non-affiliated principal manufacturers for the componentsof our products, and multiple vendors for packaging and labeling. We have an agreement in place with our primary manufacturer.This agreement was designed to support our growth and ensure consistence in production and quality. Our primary manufacturer purchasesall needed raw materials from suppliers. Additionally, our primary manufacturer is responsible for acquisition and storage of allproduct inventory (at both on and off-site facilities). We do not take title to our products until time of shipment to retailers.The three non-primary manufacturers are governed by purchase order terms and can be terminated at any time.

Our relationship with any of our manufactures may be terminatedupon proper notice. We have established relationships with other manufacturers that we believe can satisfy our needs if our relationshipwith any manufacturer terminates.

Product Delivery

All of our products are shipped by our manufacturers directlyto our retailers. Our manufacturers collect sales tax on products based upon the address of the consumer to whom products are sentregardless of how the order is placed.

Regulatory Matters

Government Regulation and Statutes

Product Regulation

Domestic

The manufacture, packaging, labeling, advertising, promotion,distribution and sale of our products are subject to regulation by one or more federal agencies, including the FDA, Consumer ProductSafety Commission, or CPSC, and the U.S. Department of Agriculture, or USDA. Advertising and other forms of promotion and methodsof marketing are subject to regulation primarily by the U.S. Federal Trade Commission, or FTC, which regulates these activitiesunder the Federal Trade Commission Act, or FTCA. The foregoing matters regarding our products are also regulated by various stateand local agencies as well as those of each foreign country to which we distribute our products.

The Dietary Supplement Health andEducation Act of 1994, or DSHEA, amended the Federal Food, Drug, and Cosmetic Act, or FFDC Act, to establish a new framework governingthe composition, safety, labeling, manufacturing and marketing of dietary supplements. All of the productswe market are regulated as dietary supplements under the FFDC Act.

Generally, under the FFDC Act, dietary ingredients that weremarketed in the United States prior to October 15, 1994 may be used in dietary supplements without notifying the FDA. “New”dietary ingredients (i.e., dietary ingredients that were “not marketed in the United States before October 15, 1994”)must be the subject of a new dietary ingredient notification submitted to the FDA unless the ingredient has been “presentin the food supply as an article used for food” without being “chemically altered”. A new dietary ingredientnotification must provide the FDA with evidence of a “history of use or other evidence of safety” establishing thatuse of the dietary ingredient “will reasonably be expected to be safe”. A new dietary ingredient notification mustbe submitted to the FDA at least 75 days before it is initially marketed. The FDA may determine that a new dietary ingredient notificationdoes not provide an adequate basis to conclude that the ingredient is reasonably expected to be safe. Such a determination couldprevent the marketing of the dietary ingredient. The FDA recently issued draft guidance governing the notification for new dietaryingredients. Although FDA guidance is not mandatory, and companies are free to use an alternative approach if the approach satisfiesthe requirements of applicable laws and regulations, FDA guidance is a strong indication of the FDA’s “current thinking”on the topic discussed in the guidance, including its position on enforcement. At this time, it is difficult to determine whetherthe draft guidance, if finalized, would have a material impact on our operations. However, if the FDA were to enforce the applicablestatutes and regulations in accordance with the draft guidance as written, this manner of enforcement could require us to incuradditional expenses, which could be significant, and negatively impact our business in several ways, including, but not limitedto, enjoining the manufacturing of our products until the FDA determines that we are in compliance and can resume manufacturing,which could increase our liability and reduce our growth prospects.

The Dietary Supplement Labeling Act of 2011, which was introducedin July 2011 (S1310), would amend the FFDC Act to, among other things, (i) require dietary supplement manufacturers to registerthe dietary supplements that they manufacture with the FDA (and provide a list of the ingredients in and copies of the labels andlabeling of the supplements), (ii) mandate the FDA and the Institute of Medicine (a non-governmental, nonprofit organization thatprovides advice to the public and decision makers, such as the FDA, concerning health issues) to identify dietary ingredients thatcause potentially serious adverse effects, (iii) require warning statements for dietary supplements containing potentially unsafeingredients and (iv) require that the FDA define the term “conventional food”. If the bill is reintroduced and enacted,it could restrict the number of dietary supplements available for sale, increase our costs, liabilities and potential penaltiesassociated with manufacturing and selling dietary supplements, and reduce our growth prospects.

The Dietary Supplement Safety Act (S3002) was introduced inFebruary 2010 and would repeal the provision of DSHEA that permits the sale of all dietary ingredients sold in dietary supplementsmarketed in the United States prior to October 15, 1994, and instead permit the sale of only those dietary ingredients includedon a list of Accepted Dietary Ingredients to be issued and maintained by the FDA. The bill also would allow the FDA to: imposea fine of twice the gross profits earned by a distributor on sales of any dietary supplement found to violate the law; requirea distributor to submit a yearly report on all non-serious adverse event reports received during the year to the FDA; and allowthe FDA to recall any dietary supplement it determines with “a reasonable probability” would cause serious adversehealth consequences or is adulterated or misbranded. The bill also would require any dietary supplement distributor to registerwith the FDA and submit a list of the ingredients in and copies of the labels of its dietary supplements to the FDA and thereafterupdate such disclosures yearly and submit any new dietary supplement product labels to the FDA before marketing any dietary supplementproduct. If this bill is reintroduced and enacted, it could severely restrict the number of dietary supplements available for saleand increase our costs and potential penalties associated with selling dietary supplements.

The FDA or other agencies could take actions against productsor product ingredients that in its determination present an unreasonable health risk to consumers that would make it illegal forus to sell such products. In addition, the FDA could issue consumer warnings with respect to the products or ingredients in suchproducts at the point they are sold to end users. Such actions or warnings could be based on information received through FFDCAct-mandated reporting of serious adverse events. The FDA in recent years has applied these procedures to require that consumersbe warned to stop using certain dietary supplements. For businesses that have been subjected to these regulatory actions, saleshave been reduced and the businesses have been required to pay refunds for recalled products.

In general, we seek representations and warranties, indemnificationand/or insurance from our vendors. However, even with adequate insurance and indemnification, any claims of non-compliance couldsignificantly damage our reputation and consumer confidence in our products. In addition, the failure of such products to complywith applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall orremove such products from the market, which in certain cases could materially and adversely affect our business, financial conditionand results of operations.

Under the current provisions of theFFDC Act, there are four categories of claims that pertain to the regulation of dietary supplements. First are health claims thatdescribe the relationship between a nutrient or dietary ingredient and a disease or health related condition and can be made onthe labeling of dietary supplements if supported by significant scientific agreement and authorized by the FDA in advance via noticeand comment rulemaking. Second are nutrient content claims which describe the nutritional value of the product and may be madeif defined by the FDA through notice and comment rulemaking and if one serving of the product meets the definition. Third are statementsof nutritional support or product performance. The FFDC Act permits “statements of nutritional support” to beincluded in labeling for dietary supplements without FDA pre-market approval. These statements must be submitted to the FDA within30 days of marketing and may describe how a particular dietary ingredient affects the structure, function or general well-beingof the body, or the mechanism of action by which a dietary ingredient may affect body structure, function or well-being, but maynot expressly or implicitly represent that a dietary supplement will diagnose, cure, mitigate, treat or prevent a disease. A companythat uses a statement of nutritional support in labeling must possess scientific evidence substantiating that the statement istruthful and not misleading. The fourth category are drug claims, representations that a product isintended to diagnose, mitigate, treat, cure or prevent a disease, are prohibited from use in the labeling of dietary supplements,and we make no drug claims regarding our products.

We may make claims for our dietarysupplement products regarding three of the four categories, that are statements of nutritional support, health claims and nutrientcontent claims when authorized by the FDA, or that otherwise are allowed by law. The FDA’s interpretation of what constitutesan acceptable statement of nutritional support may change in the future, thereby requiring that we revise our labeling. These regulatoryactivities include those discussed above concerning products marketed before October 15, 1994 or afterwards, and the requirementsof 75 days advance notice to the FDA before marketing products containing new dietary ingredients. There is no assurance that theFDA will accept the evidence of safety for any new dietary ingredients that we may wish to market, and the FDA’s refusalto accept that evidence could prevent the marketing of the new dietary ingredients and dietary supplements containing a new dietaryingredient. If the FDA determines that a particular statement of nutritional support is an unacceptable drug claim, conventionalfood claim or an unauthorized version of a “health claim”, or, if the FDA determines that a particular claim is notadequately supported by existing scientific data or is false or misleading, we would be prevented from using the claim.

In addition, DSHEA provides that so-called “third-partyliterature”, e.g., a reprint of a peer-reviewed scientific publication linking a particular dietary ingredient with healthbenefits, may be used “in connection with the sale of a dietary supplement to consumers” without the literature beingsubject to regulation as labeling. The literature: (1) must not be false or misleading; (2) may not “promote” a particularmanufacturer or brand of dietary supplement; (3) must present a balanced view of the available scientific information on the subjectmatter; (4) if displayed in an establishment, must be physically separate from the dietary supplements; and (5) should not haveappended to it any information by sticker or any other method. If the literature fails to satisfy each of these requirements, wemay be prevented from disseminating such literature with our products, and any dissemination could subject our product to regulatoryaction as an illegal drug.

Our dietary supplements must also comply with the Dietary Supplementand Nonprescription Drug Consumer Protection Act, which became effective on December 22, 2007. This law amends the FFDC Act tomandate that we report to the FDA any reports of serious adverse events that we receive. Under the law, an “adverse event”is any health-related event associated with the use of a dietary supplement that is adverse, and a “serious adverse event”is any adverse event that results in death, a life-threatening experience, inpatient hospitalization, a persistent or significantdisability or incapacity, or a congenital anomaly or birth defect, or requires, based on reasonable medical judgment, a medicalor surgical intervention to prevent one of these outcomes. Serious adverse event reports received through the address or phonenumber on the label of a dietary supplement, as well as all follow-up reports of new medical information received within one yearafter the initial report, must be submitted to the FDA no later than 15 business days after the report is received. The law alsorequires recordkeeping for reports of non-serious adverse events as well as serious adverse events for six years following theevent, and these records are subject to FDA inspection.

In June 2007, pursuant to the authority granted by the FFDCAct as amended by DSHEA, the FDA published detailed current good manufacturing practice, or cGMP, regulations that govern the manufacturing,packaging, labeling and holding operations of dietary supplement manufacturers. The cGMP regulations, among other things, imposesignificant recordkeeping requirements on manufacturers. The cGMP requirements are in effect for all manufacturers, and the FDAis conducting inspections of dietary supplement manufacturers pursuant to these requirements. There remains considerable uncertaintywith respect to the FDA’s interpretation of the regulations and their actual implementation in manufacturing facilities.The failure of a manufacturing facility to comply with the cGMP regulations renders products manufactured in such facility “adulterated”,and subjects such products and the manufacturer to a variety of potential FDA enforcement actions.

The FDA has also announced its intentionto promulgate new cGMPs specific to dietary supplements, to fully enforce DSHEA and monitor compliance with the Bioterrorism Actof 2002. We intend to comply with the new cGMPs once they are adopted. The new cGMPs, predicted to be finalized shortly, wouldbe more detailed and stringent than the cGMPs that currently apply to dietary supplements and may, among other things, requiredietary supplements to be prepared, packaged, produced and held in compliance with regulations similar to the cGMP regulationsfor drugs. There can be no assurance that, if the FDA adopts cGMP regulations for dietary supplements, we will be able to complywith the new regulations without incurring a substantial expense.

In addition, under the Food Safety Modernization Act, or FSMA,which was enacted on January 4, 2011, the manufacturing of dietary ingredients contained in dietary supplements will be subjectto similar or even more burdensome manufacturing requirements, which will likely increase the costs of dietary ingredients andwill subject suppliers of such ingredients to more rigorous inspections and enforcement. The FSMA will also require importers offood, including dietary supplements and dietary ingredients, to conduct verification activities to ensure that the food they mightimport meets applicable domestic requirements.

The FDA has broad authority to enforce the provisions of federallaw applicable to dietary supplements, including powers to issue a public warning or notice of violation letter to a company, publicizeinformation about illegal products, detain products intended for import, require the reporting of serious adverse events, requirea recall of illegal or unsafe products from the market, and request the Department of Justice to initiate a seizure action, aninjunction action or a criminal prosecution in the U.S. courts. The FSMA expands the reach and regulatory powers of the FDA withrespect to the production and importation of food, including dietary supplements. The expanded reach and regulatory powers includethe FDA’s ability to order mandatory recalls, administratively detain domestic products, require certification of compliancewith domestic requirements for imported foods associated with safety issues and administratively revoke manufacturing facilityregistrations, effectively enjoining manufacturing of dietary ingredients and dietary supplements without judicial process. Theregulation of dietary supplements may increase or become more restrictive in the future.

Our failure to comply with applicable FDA regulatory requirementscould result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions.

Our advertising of dietary supplement products is subject toregulation by the FTC under the FTCA. Section 5 of the FTCA empowers the FTC to prohibit unfair methods of competition and unfairor deceptive acts or practices in or affecting commerce. Section 12 of the FTCA provides that the dissemination of any false advertisementfor the purpose of inducing, directly or indirectly, the purchase of drugs or foods, which would include dietary supplements, isan unfair or deceptive act or practice. Additionally, under the FTC’s Substantiation Doctrine, an advertiser is requiredto have a “reasonable basis” for all objective product claims before the claims are made. Failure to adequately substantiateclaims may also be considered an unfair or deceptive practice. Pursuant to this FTC requirement, we are required to have adequatesubstantiation for all material advertising claims made for our products.

On November 18, 1998, the FTC issued “Dietary Supplements:An Advertising Guide for Industry.” This guide provides marketers of dietary supplements with guidelines for applying FTClaw to dietary supplement advertising and reiterates and explains the FTC’s “reasonable basis” determination.It includes examples of the principles that should be used when interpreting and substantiating dietary supplement advertising.Although the guide provides additional explanation, it does not substantively change the FTC’s existing policy that all supplementmarketers have an obligation to ensure that claims are presented truthfully and to verify that such claims are adequately substantiated.

The FTC has a variety of processes and remedies available toit for enforcement, both administratively and judicially, including compulsory process, cease and desist orders and injunctions.FTC enforcement can result in orders requiring, among other things, limits on advertising, corrective advertising, consumer redress,divestiture of assets, rescission of contracts and such other relief as may be deemed necessary. Any violation could have a materialadverse effect on our business, financial condition and results of operations.

As a result of our efforts to comply with applicable statutesand regulations in the United States and elsewhere, we have from time to time reformulated, eliminated or relabeled certain ofour products and revised certain advertising claims. We cannot predict the nature of any future laws, regulations, interpretationsor applications, nor can we determine what effect additional governmental regulations or administrative orders, when and if promulgated,would have on our business in the future. They could, however, require the reformulation of certain products to meet new standards,the recall or discontinuance of certain products not capable of reformulation, additional record keeping, expanded documentationof the properties of certain products, expanded or different labeling, and/or scientific substantiation. Any or all of such requirementscould have a material adverse effect on our business, financial condition and results of operations.

Advertising and labeling for dietary supplements and conventionalfoods are also regulated by state, county and other local governmental authorities. Some states also permit these laws to be enforcedby private attorney generals. These private attorney generals may seek relief for consumers, seek class action certifications,seek class-wide damages, seek class-wide refunds and product recalls of products sold by us. There can be no assurance that stateand local authorities will not commence regulatory action, which could restrict the permissible scope of our product advertisingclaims, or products that can be sold in the future.

Foreign

Our products which we sell or may make plans to sell in foreigncountries are also subject to regulation under various national, local and international laws that include provisions governing,among other things, the formulation, manufacturing, packaging, labeling, advertising and distribution of dietary supplements andover-the-counter drugs. These regulations may prevent or delay entry into the market or prevent or delay the introduction, or requirethe reformulation, of certain of our products. Compliance with such foreign governmental regulations is generally the responsibilityof our distributors for those countries. These distributors are independent contractors over whom we have limited control.

Possible New Legislation or Regulation

Legislation may be introduced which,if passed, would impose substantial new regulatory requirements on dietary supplements. For example, although not yet reintroducedin this session of Congress, bills have been repeatedly proposed in past sessions of Congress which would subject the dietary ingredientdehydroepiandrosterone, or DHEA, to the requirements of the Controlled Substances Act, which would prevent the sale of productscontaining DHEA. In March 2009, the General Accounting Office, or GAO, issued a report that made four recommendations to enhancethe FDA’s oversight of dietary supplements. The GAO recommended that the Secretary of the Department of Health and HumanServices direct the Commissioner of the FDA to: (1) request authority to require dietary supplement companies to identify themselvesas a dietary supplement company and update this information annually, provide a list of all dietary supplement products they selland a copy of the labels and update this information annually, and report all adverse events related to dietary supplements, notjust serious adverse events; (2) issue guidance to clarify when an ingredient is considered a new dietary ingredient, the evidenceneeded to document the safety of new dietary ingredients, and appropriate methods for establishing ingredient identity; (3) provideguidance to industry to clarify when products should be marketed as either dietary supplements or conventional foods formulatedwith added dietary ingredients; and (4) coordinate with stakeholder groups involved in consumer outreach to identify additionalmechanisms for educating consumers about the safety, efficacy, and labeling of dietary supplements, implement these mechanisms,and assess their effectiveness. These recommendations could lead to increased regulation by the FDA or future legislationconcerning dietary supplements.

We cannot determine what effect additional domestic or internationalgovernmental legislation, regulations, or administrative orders, when and if promulgated, would have on our business in the future.New legislation or regulations may require the reformulation of certain products to meet new standards, require the recall or discontinuanceof certain products not capable of reformulation, impose additional record keeping or require expanded documentation of the propertiesof certain products, expanded or different labeling or scientific substantiation.

Employees

We believe that our success will depend significantly on ourability to identify, attract, and retain capable employees. As of October 25, 2012, we had 45 full time employees. Our employeesare not represented by any collective bargaining unit, and we believe our relations with our employees are good. We have recentlycompleted staffing for the in-house medical and physiology center on-site in our training facilities.

Insurance

We maintain commercial liability, including product liabilitycoverage, and property insurance. Our policy provides for a general liability of $1.0 million per occurrence, and $2.0 millionannual aggregate coverage which includes our main corporate facility. We carry property coverage on our main office facility tocover our legal liability, tenant’s improvements, business property, and inventory.

Properties

Our corporate headquarters is located in Denver, Colorado. Thiscommercial office building is 30,302 square feet and includes, a full performance training center, medical laboratory and a 96-seattheatre room. The term of the lease is 65 months, expiring on December 31, 2015. We currently pay approximately $13,500 in leasepayments per month.

We lease an office and distribution warehouse in Boise, Idaho.The warehouse is 6,035 square feet we pay approximately $3,500 per month in rent, expires in February 2013. We also lease a 500square foot office space in Boise, Idaho on a month-to-month basis for $500 per month.

We lease a 152,562 square foot warehouse facility in Franklin,Tennessee. The term of the lease is through August 31, 2015. We currently pay approximately $8,867 per month for rent.

Through our Ontario, Canada subsidiary, Canada MusclePharm EnterprisesCorp., we lease a 10,000 square foot office and warehouse facility in Hamilton, Ontario, Canada. The term of the lease expireson March 31, 2013. We currently pay 6,655 in Canadian dollars (or the U.S. dollar equivalent of about $6,544) per month for rent.

Legal Proceedings

From time to time, we have become involved in various legalproceedings that arise in the ordinary course of business or otherwise. Legal proceedings are subject to inherent uncertaintiesas to timing, outcomes, costs, expenses and time expenditures by our management and others on our behalf. Although there can beno assurance, based on information currently available, we believe that the outcome of legal proceedings that are pending or threatenedagainst us will not have a material effect on our financial condition. However, the outcome of any of these matters is neitherprobable nor reasonably estimable.

As of October 25, 2012, we were a defendant in the followinglegal proceedings, each of which we: (a) believe are without merit; and (b) intend to defend vigorously:

As of October 25, 2012, we are a plaintiff in the followinglegal matter:

MANAGEMENT

Directors, Named Executive Officers and Key ManagementPersonnel

The following table and text sets forth the names and ages ofall our directors, named executive officers and our key management personnel as of October 25, 2012. All of our directors serveuntil the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death,retirement, resignation or removal. Named executive officers serve at the discretion of the board of directors, and are electedor appointed to serve until the next board of directors meeting following the annual meeting of stockholders. Also provided isa brief description of the business experience of each director, named executive officer and the key management personnel duringthe past five years and an indication of directorships held by each director in other companies subject to the reporting requirementsunder the federal securities laws.

Brad J. Pyatt has served as our Chief Executive Officerand Director since February 18, 2010 and as our President since October 2012. Prior to our acquisition of Muscle Pharm, LLC, Mr.Pyatt was President and Chief Executive Officer of Muscle Pharm, LLC, since its inception in April 2008. His background includesseven years of experience as a professional athlete, and more than five years of experience in the sports nutrition arena. Mr.Pyatt played in National Football League for the Indianapolis Colts during the 2003, 2004, and 2005 NFL seasons as well for theMiami Dolphins during the 2006 NFL season. Mr. Pyatt played in the Arena Football League for the Colorado Crush during the 2007and 2008 AFL seasons. Mr. Pyatt attended the University of Kentucky from 1999 to 2002, where he studied kinesiology exercise science,as well the University of Northern Colorado, from 2002 to 2003. Mr. Pyatt filed for protection under Chapter 7 of the federal bankruptcylaws in 2008. He received a discharge relating to the matter in 2009.

L. Gary Davis has served as our Chief Financial Officersince July 2012. From January, 2010 to prior to joining us, Mr. Davis worked as a certified public accountant for various clients,specializing in mergers and acquisitions. From November, 2004 to January, 2010, Mr. Davis servedas executive vice president and chief financial officer of Bodybuilding.com, a sports, fitness and nutritional supplement on-lineretail store. He previously was vice president and chief financial officer of U.S. Ecology Corporation. Mr. Davis has a Bachelor’sDegree in Accounting from Boise State University and is near completion of a Master’s Degree in Finance from Rochester Instituteof Technology. He is a licensed certified public accountant.

John H. Bluher has served as our Executive Vice President– Chief Operating Officer since September 2011 and as Co-Chairman of our board of directors since July 2012. From February2011 to August 2012, he served on the board of directors of Targeted Medical Pharma, Inc. From August 2010 to September 2011, hewas managing director of AFH Holdings & Advisory LLC, a business consulting company. From December 2009 to August 2010, Mr.Bluher assisted in raising capital, marketing and co-managed Coachman Energy Funds at Caddis Capital, LLC, a private equity portfoliofocused on oil and gas investments. From February 2010 to August 2010, Mr. Bluher acted as investment banker and special financialadvisor to the AARP Mutual Fund Board of Trustees in a platform divestiture. From December 2007 to May 2009, Mr. Bluher servedas managing director and general counsel at Lehman Brothers, Inc.’s investment management division. Mr. Bluher also servedas global chief legal and compliance officer and managing director of Neuberger Berman during this period. From August 2004 toJune 2007, Mr. Bluher served as general counsel and director of risk and Janus Capital, Inc. From June 2002 to July 2004, Mr. Bluherserved as executive vice president, general counsel and corporate secretary and director of risk management of Knight Trading Group.From January 2001 to May 2002, Mr. Bluher served as senior vice president and global chief compliance officer for Prudential Securities,Inc. From October 1997 to January 2001, Mr. Bluher served as general counsel and chief compliance officer of Sun America, Inc.,later AIG. From 1992 through 1997, Mr. Bluher served as Senior Vice President, Regional and Divisional Counsel at Prudential Securities,Inc. From 1987 to 1992, Mr. Bluher was senior counsel for the Division of Enforcement at the Securities and Exchange Commission.Mr. Bluher holds a Bachelor of Science and a J.D. degree from the University of Wyoming and holds FINRA Series 7, Series 24 andSeries 14 licenses. He has served on the boards of ICI Mutual Insurance Company, the NASDAQ Chairman’s Advisory Board, CherryHills Founders Group, Inc., Safe Communications, Inc., and the University of Wyoming Foundation Board, and College of Law AdvisoryBoard.

Jeremy R. DeLuca has been our Senior Vice President andChief Marketing Officer (former President and Chief Marketing Officer) since November 2010. Prior to joining the Company, fromApril 1999 to November 2010, Mr. DeLuca served as the President of Bodybuilding.com, an online sports nutrition and supplementscompany, which he co-founded in 1999. There, Mr. DeLuca was actively involved in all aspects of Bodybuilding.com’s business,with a focus on marketing, sales, and e-commerce. Mr. DeLuca’s responsibilities also included managing vendor relations,marketing strategies, sales promotions, store content and store site development. During Mr. DeLuca’s tenure, Bodybuilding.comexperienced significant growth, achieving annual sales of over $200 million in 2010. In August 2012, Mr. DeLuca was fined $600,000by the FDA in connection with a plea agreement on six misdemeanor counts relating to the FDA’s investigation into allegationsthat Bodybuilding.com misbranded five dietary supplements.  In connection with the plea, Mr. DeLuca agreed to serve threeyears’ probation.

Cory J. Gregory has served as an executive officer ofMuscle Pharm, LLC, since its inception in 2008 and our Senior Vice President (formerly Senior President) since May 2010. Priorto joining us, Mr. Gregory served as President, managing member, and owner of T3 Personal Training LLC, or T3, from April 2009until November 2011. T3 was a personal training service that managed and oversaw over 40 clients using seven trainers over a ten-yearperiod. During the same period, Mr. Gregory served as President of the Ohio Natural Bodybuilding Federation, a federation foundedby Mr. Gregory in 2004 which hosted 14 bodybuilding competitions over a six-year period. He consulted for Agile Enterprises, anutritional supplement company from January 2006 through January 2008. In 2004, Mr. Gregory purchased the Old School Gym, locatedin Pataskala, Ohio, which he continues to own at present day.

Lawrence S. Meer has served as our Chief Financial Officerfrom July 2010 to July 3, 2012 when he became our Treasurer. Prior to becoming the Chief Financial Officer he was the Directorof Finance at Muscle Pharm, LLC from October 2009 to July 2010. His other past experience includes daily cash management and treasuryfunctions, including the establishment of credit and collection procedures. He previously served as President and Chief FinancialOfficer in Miami, Florida, at Color It, Inc., a textile finishing business, from March 2002 to December 2008.From January 2008 until September 2009 Mr. Meer served as an independent financial consultant where he assisted in the preparationof business plans, budgets, forecasts and other financial areas. Mr. Meer also previously served as Executive Vice President atCustomer Assets in Denver, Colorado, an India-based call center, from 2000 to 2002. Prior to joining Customer Assets, he was ChiefFinancial Officer and Chief Operating Officer at GS Sportswear in Denver, Colorado, a sportswear promotional company, from 1998to 2000. Mr. Meer also served as Chief Financial Officer at Davis Audio-Visual, Inc., a retailer of audio-visual equipment, from1996 to 1998; and Vice President of Finance at Pacer Cats in Englewood, Colorado, a ticketing and concession software providerfrom 1991 to 1996. Mr. Meer earned a BS in accounting from the University of Colorado at Boulder.

Gordon G. Burr has served as a director on our boardof directors since July 2012. He is the founder and president of the B-Mex/Exciting Games group, which is a group of U.S. and Mexicancompanies that constructed, own and operate casinos in Mexico. Mr. Burr occupies a principal role in both corporate strategy andin daily operations and has served as President of the B-Mex/Exciting Games group since its inception in 2005. From 2003 to 2004,he was VP of Business Development for Pelion Systems, Inc., a software company providing manufacturing optimization software andsolutions that merged with JCIT International to form DemandPoint. Between 2001 and 2003, Mr. Burr was Manager of Business Developmentfor C2 Media, a corporate printing roll-up, and was involved in fundraising and later operations. Mr. Burr also serves on the boardof directors for the Colorado Honor Corps, a local division of the Tragedy Assistance Program for Survivors, which provides assistancefor persons who have lost a military loved one. Mr. Burr is also a co-founder and Vice Chairman of Fundación Curandoa México, a non-profit charity in Mexico partnered with Project C.U.R.E. in the U.S. to bring medical equipment, supplies,training and other services to hospitals serving the low-income population in Mexico.

James J. Greenwell has served as a director since October15, 2012. Since 2000, he has been the Chief Executive Officer of Datria Systems Inc., a speech recognition application softwarecompany. He has also served as the Datria Systems’ Chairman since 2002. In prior employment, he served as a technology executivein a number of private and public companies .He has served on the Board of the Cherry Creek School Foundation since September 2010.He was a founding member of Friends of Denver Fire and served on its Board from 2007 through 2010. Mr. Greenwell served on theBoard of the Denver Chapter of the American Heart Association from 2002 through 2008 and was Chairman of the board in 2007. Healso served on the Board of Trustees of the Bonfils Blood Center Foundation from 1999 through 2003. Mr. Greenwell earned a BS fromthe College of Business at Michigan State University and an MBA degree from Saint Mary’s College.

Donald W. Prosser has served as a director on our boardof directors since July 2012 and has been the principal executive officer of Arête Industries, Inc. since January 2011 anda director of Arête since September, 2003. Arête is a voluntary filer with the SEC under the Securities Exchange Actof 1934. Mr. Prosser owns a certified public accounting firm, Donald W. Prosser, P.C., specializing in tax services and accountingand has represented a number of private and public companies serving in the capacity of accountant, member of boards of directors,and as chief financial officer. From 1997 to 1999, Mr. Prosser served as CFO and Director for Chartwell International, Inc., apublic company publishing high school athletic information and providing athletic recruiting services. From 1999 to 2000, he servedas CFO and Director for Anything Internet, Inc. and from 2000 to 2001, served as CFO and Director for its successor, Inform WorldwideHoldings, Inc., a publicly traded company. From November 2002 through June 2008, Mr. Prosser served as CFO of VCG Holding Corp.,a public company. From July 2008 through August 2009 Mr. Prosser was chief financial officer of Iptimize, Inc., a provider of broadbandand data services that filed a petition under federal bankruptcy laws in October 2009. He also has served on the board of directorsof Veracity Management Global, Inc., a publicly traded company, since January, 2008. Mr. Prosser has been a certified public accountantsince 1975. Mr. Prosser attended the University of Colorado from 1970 to 1971 and Western State College of Colorado from 1972 to1975, where he earned a Bachelor’s Degree in Accounting and History (1973) and a Master’s Degree in Accounting –Income Taxation (1975).

Advisory Board

We have established an Advisory Board currently consisting ofnine members, which serves to advise management with respect to product formulations, product ideas, marketing and related matters.Members of the Advisory Board do not meet on a formal or regular basis. Our management team consults with one or more members ofthe Advisory Board as needed, from time to time, by means of meetings or telephone conference calls.

Following is a brief description of the background of our advisoryboard members:

Dr. Eric Serrano – Chief Formulator MedicalAdvisor. Dr. Serrano has been practicing medicine in the State of Ohio for over 22 years and is considered one of the leadingsports nutrition doctors in the country. His clients include a wide array of athletes from the NFL, NHL, and MLB, in addition tomany elite amateur athletes. Dr. Serrano was a professor of family practice medicine at Ohio State University, where he was awardedProfessor of The Year and Preceptor of The Year. Dr. Serrano currently lectures across the country to universities, medical groupsand health and fitness conferences on the topics of sports nutrition, performance enhancement, and injury prevention. He has formulatednumerous nutritional supplements for some of the leading nutritional companies on the market and also been a contributing writerfor some of the leading U.S. health and fitness magazines, including Muscle & Fitness. Dr. Serrano has been involvedin the formulations for each of our products. Dr. Serrano received his B.A. from Kansas State University in Biology, his M.A. fromKansas State University in Exercise Physiology, and his M.D. from the University of Kansas Medical School.

Dr. Mauro Di Pasquale – Director of ProductDevelopment and Research. Dr. Di Pasquale brings five decades of personal, clinical and university teaching and learning,combined with leadership gained from medical directorships of important sports organizations to us. Dr. Di Pasquale has writtenover a dozen books on athletic performance, focusing mainly on diet and supplementation, most notably his books, The AnabolicDiet and The Metabolic Diet. He has received an Honors M.D., Honors B.Sc. (majoring in genetics and molecular biochemistry),both from the University of Toronto. He has also published 1,000 articles in magazines such as Muscle & Fitness, Flexand Powerlifting USA.

Dr. Roscoe M. Moore, Jr. – Chief ScientificDirector. A Former U.S. Assistant Surgeon General, Dr. Moore served with the United States Department of Health and Human Services(HHS) and was for the last 12 years of his career there the principal person responsible for global development support withinthe Office of the Secretary, HHS, with primary emphasis on Continental Africa and other less developed countries of the world.He was the principal liaison person between the HHS and Ministries of Health in Africa with regard to the development of infrastructureand technical support for the delivery of preventive and curative health needs for the continent. Dr. Moore received his undergraduateand Doctor of Veterinary Medicine degrees from Tuskegee Institute; his Master of Public Health degree in Epidemiology from theUniversity of Michigan; and his Doctor of Philosophy degree in Epidemiology from the Johns Hopkins University. He was awarded theDoctor of Science degree (Honoris Causa) in recognition of his distinguished public health career by Tuskegee University. Dr. Moorewas a career officer within the Commissioned Corps of the United States Public Health Service (USPHS) entering with the U.S. NationalInstitutes of Health and rising to the rank of Assistant United States Surgeon General (Rear Admiral, USPHS) within the ImmediateOffice of the Secretary, HHS. He was selected as Chief Veterinary Medical Officer, USPHS, by Surgeon General C. Everett Koop.

Dr. Richard Ogden (CSCS) – Medical Advisor.Dr. Odgen’s career in clinical research and development spans nearly 40 years. After earning a Ph.D. from Cambridge University,his career started with postdoctoral research studying ribonucleic acid transcription and processing. Following that, he undertookindependent research, funded by the National Science Foundation. In 1984, he joined Agouron Pharmaceuticals, Inc. as one of itsfounding scientists. Following Agouron’s merger with Pfizer, he served as a Senior Director and was the scientific liaisonfor the Agouron/Pfizer commercial and corporate organizations. In 2006, Dr. Ogden, co-founded RORR Inc., a medical, scientificconsulting and education company with clients in the U.S. and Europe. In addition to publication in numerous medical journals,he is co-editor of two books relating to AIDS therapy.

Dr. Michael R. Stevens – Director ofTherapeutic Nutrition. Dr. Stevens has over 20 years of well-diversified experience in the healthcare and pharmaceutical industry.Dr. Stevens spent 17 years at Bristol-Myers Squibb, where he held positions of increasing responsibility in the areas of MarketResearch (Oncology and HIV), Marketing (Oncology), and Medical Affairs (HIV). In addition served as a member of the Executive Councilfor the Forum for Collaborative HIV Research — a public-private partnership facilitating discussion on emerging issues inHIV clinical research and working to translate research results into patient care. He has also served on 15 Protocol Committeeswithin the Adult AIDS Clinical Trials Group (ACTG). Michael received his B.S. Pharmacy and Doctor of Pharmacy degrees from PurdueUniversity.

Dr. Ron Sekura – Director of TherapeuticResearch. Dr. Sekura is the former Chief of the Pharmaceutical and Regulatory Affairs Branch of the Division of AIDS at TheNational Institute of Allergy and Infectious Diseases (NIAID) of the National Institute of Health (NIH) as well as a former ResearchChemist at The National Institutes of Child Health and Human Development (NICHD) at the NIH and the Center for Biologics Evaluationand Research (CBER). He received his Bachelor of Science and Master of Science in Biochemistry degrees at Pennsylvania State Universityand his PhD at Cornell University. Dr. Sekura is the author of over 60 scientific publications.

Mariel Selbovitz – Director of GlobalTherapeutics Product Procurement Development. Ms. Selbovitz is a graduate of Cornell University and received her Master’sin Public Health at the Johns Hopkins University Bloomberg School of Health. She worked as the Client Intake Specialist at PositiveHealth Project and Syringe Exchange Program Coordinator at the Foundation for Research on Sexually Transmitted Diseases and isa partner in BioEquity Partners. Selbovitz is a member of the Cornell AIDS Clinical Trials Group Community Advisory Board and AIDSTreatment Advocacy Coalition.

James Sapirstein, R.Ph., MBA– Strategic Advisor. Mr. Sapirstein has been the Chief Executive Officer of Alliqua Inc. since October 2012. He was thePresident and Chief Executive Officer of Tobira Therapeutics, Inc., or Tobira, from August 2007 through April 2011 and foundedTobira in October 2006. Prior to Tobira, Mr. Sapirstein worked at Paramount BioCapital from May 2005 to September 2006 in the companycreation group. Mr. Sapirstein was the Executive Vice President of the Metabolic and Endocrinology Business Unit from 2002 throughApril 2005. Mr. Sapirstein was the Director of Global Marketing at Gilead Sciences from July 2000 through May 2002, where he wasresponsible for the global launch of Viread^®. He was the head of the international infectious disease marketingteams during his time at Bristol-Myers Squibb from August 1996 to July 2000. Mr. Sapirstein was with Hoffmann-LaRoche from October1987 to July 1996, where he worked in a variety of capacities ranging from marketing and sales positions to international posts.Prior to working at Hoffmann LaRoche, he worked at Eli Lilly and Company in a sales capacity from June 1984 to October 1987. Mr.Sapirstein earned his Bachelor of Science in Pharmacy from the Ernest Mario School of Pharmacy at Rutgers University and an MBAfrom Farleigh Dickinson University.

Michael Kim, D.O. – Executive Director of Medicine,Research and Education. Dr. Kim has been our Executive Director of Medicine, Research and Education since August 2011. He overseesour research. He analyzes formulations, research protocols and strength and performance protocols. He also advises our athleteendorsers regarding nutrient, diet and supplementation. He received a B.A. in Economics from University of California – Davis,and a Doctor of Osteopathy degree from Touro University.

Corporate Governance

Director Independence

Each director and named executive officer is obligated to disclose,on an annual basis, any transactions with our Company and any of its subsidiaries in which a director or executive officer, orany member of his or her immediate family, have a direct or indirect material interest. Following completion of these disclosures,our board of directors make a determination as to the independence of each director using the current standards for “independence”that satisfy both the criteria for the NASDAQ Stock Market and the NYSE MKT.

As of October 15, 2012, our board of directors conducted anannual review and affirmatively determined that Messrs. Prosser and Greenwell are “independent” as that term is definedin the NASDAQ listing standards.

Committees of the Board

The following table sets forth the three standing committeesof our board and the members of each committee as of October 25, 2012:

To assist it in carrying out its duties, the board has delegatedcertain authority to an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee as the functionsof each are described below.

Audit Committee

Messrs. Prosser and Greenwell serve on our Audit Committee.Our Audit Committee’s main function is to oversee our accounting and financial reporting processes, internal systems of control,independent auditor relationships and the audits of our financial statements. The Audit Committee’s responsibilities include:

The board of directors has adopted an Audit Committee Charter.The Audit Committee members meet NASDAQ’s financial literacy requirements, and the board has further determined that Mr. Prosser(i) is an “audit committee financial expert” as such term is defined in Item 407(d) of Regulation S-Kpromulgated by the SEC and (ii) also meets NASDAQ’s financial sophistication requirements.

Compensation Committee

Messrs. Burr, Greenwell and Prosser serve on the CompensationCommittee. Our Compensation Committee’s main functions are assisting our board of directors in discharging its responsibilitiesrelating to the compensation of outside directors, the Chief Executive Officer and other executive officers, as well as administeringany stock incentive plans we may adopt. The Compensation Committee’s responsibilities include the following:

The board of directors has adopted a Compensation CommitteeCharter.

The Compensation Committee’s policy is to offer our executiveofficers competitive compensation packages that will permit us to attract and retain highly qualified individuals and to motivateand reward these individuals in an appropriate fashion aligned with the long-term interests of our Company and our stockholders.

Compensation Committee Risk Assessment. We haveassessed our compensation programs and concluded that our compensation practices do not create risks that are reasonably likelyto have a material adverse effect on us.

Nominating and Corporate Governance Committee

Messrs. Prosser and Greenwell serve on our Nominating and CorporateGovernance Committee. The Nominating and Corporate Governance Committee’s responsibilities include:

The board of directors has adopted a Nominating and CorporateGovernance Committee Charter.

EXECUTIVE COMPENSATION

Summary Compensation Table for 2011

The following summary compensation tables sets forth all compensationawarded to, earned by, or paid to each person serving as a named executive officer of the Company during the year ended December31, 2011.

Outstanding Equity Awards at 2011 Fiscal Year-End

None of our named executive officers other than Mr. Meer hadoutstanding equity awards at December 31, 2011. At December 31, 2011, Mr. Meer had options (granted on April 2, 2010) to purchase1,538 shares of our common stock at an exercise price of $325.00 per share, which expire April 2, 2015.

Recent Changes to Employment Arrangements

On October 18, 2012, the Compensation Committee approved 2012target bonuses for its executive officers, including its principal executive officer, principal financial officer and other namedexecutive officers as follows:

Also, on October 18, 2012, the Company entered into amendedand restated employment agreements (except for Mr. Davis, which was an initial employment agreement) with the following executiveofficers of the Company, which include its principal executive officer, principal financial officer and other named executive officers:

The employment agreements were executed based upon a form employmentagreement approved by the Compensation Committee of the board. The employment agreements are for an initial term ending December31, 2014. However, the employment agreements entered into with Mr. Pyatt and Mr. DeLuca provide for an initial term ending December31, 2015.

Under the terms of the employment agreements, each officer willreceive an annual base salary in the amount set forth below, subject to any increase the Compensation Committee may deem appropriatefrom time to time.

In addition, the officers will be eligible to receive one ormore annual cash bonuses and grants of stock options, restricted stock or other equity-related awards from the Company’svarious equity compensation plans, as determined by the Compensation Committee.

If the employment of an officer is terminated due to the officer’sdeath or inability to perform, the employment agreements provide for payment to the officer of any unpaid portion of the Officer’sbase salary and benefits accrued through the date of death or inability to perform and, at the discretion of the Compensation Committee,a bonus. The officer or his representatives will also be entitled to receive a reimbursement of up to 12 months of ConsolidatedOmnibus Reconciliation Act, or COBRA, premiums, if the officer or his representatives timely elect and remain eligible for COBRA.If the officer’s employment is terminated due to inability to perform, the officer will also be entitled to (i) a lump sumpayment equal to the greater of (A) the target bonus payable to the Officer for the year in which the date of terminationoccurs or if no target bonus has been set, the officer’s most recent annual bonus, and (B) a bonus for such year as may bedetermined by the Compensation Committee in its sole discretion; and (ii) a severance payment (payable over six months) equal tosix months of the officer’s base salary in effect as of the date of termination.

If the officer’s employment is terminated for “cause”or if an Officer terminates his employment without “good reason” (as such terms are defined in the employment agreement),the officer will not be entitled to a severance payment or any other termination benefits. However, the Company will pay the officerany unpaid portion of the officer’s base salary and benefits accrued through the date of such termination.

Upon a termination of an officer’s employment (exceptfor Mr. Pyatt) by the Company without cause and without a change in control or by the officer for good reason without a changein control, the employment agreements provide that such officer will be entitled to (i) any unpaid portion of the officer’sbase salary and benefits accrued through the date of termination; (ii) an amount payable over three months and equal to the lesserof (A) nine months of the officer’s base salary in effect as of the date of termination, or (B) the officer’s basesalary remaining under the term of his employment agreement; (iii) a lump sum payment equal to 25% of the officer’s targetbonus (or if no target bonus has been set, the Officer’s most recent annual bonus) if the termination is between January1 and June 30 or 50% of the Officer’s target bonus (or if no target bonus has been set, the Officer’s most recent annualbonus) if the termination is between July 1 and December 31; (iv) acceleration of the officer’s outstanding equity awards,unless otherwise provided in the equity award agreement for a particular equity award; and (v) the officer will also be entitledto receive a reimbursement of up to 12 months of COBRA premiums, if the officer timely elects and remains eligible for COBRA.

Upon a termination of Mr. Pyatt’s employment by the Companywithout cause and without a change in control or by Mr. Pyatt for good reason without a change in control, Mr. Pyatt’s employmentagreement provides that he will be entitled to (i) any unpaid portion of his base salary and benefits accrued through the dateof termination; (ii) an amount payable over three months and equal to two times his base salary on the date of termination; (iii)a lump sum payment equal to the greater of (A) two times his target bonus for the for the year in which the date of terminationoccurs or if no target bonus has been set, then two times Mr. Pyatt’s most recent annual bonus, and (B) a bonus for suchyear as may be determined by the Compensation Committee in its sole discretion; (iv) acceleration of his outstanding equityawards, unless otherwise provided in the equity award agreement for a particular equity award; and (v) he will also be entitledto receive a reimbursement of up to 12 months of COBRA premiums, if he timely elects and remains eligible for COBRA.

Upon a termination of an officer’s employment (exceptfor Mr. Pyatt) by the Company without cause and with a change in control or by the officer for good reason after a change in control,the employment agreement provides that such officer will be entitled to (i) any unpaid portion of the officer’s base salaryand benefits accrued through the date of termination; (ii) a severance payment (payable over 12 months) equal to 12 months of theofficer’s base salary in effect as of the date of termination; (iii) a lump sum payment equal to the greater of (A) 100%of the officer’s target bonus in the year of termination or if no target bonus has beenset, then 100% of the officer’s most recent annual bonus, and (B) a bonus for such year as may be determined by the Committeein its sole discretion; (iv) a severance payment of $500,000 (payable within 30 days of the date of termination); (v) accelerationof the officer’s outstanding equity awards; and (vi) the officer will also be entitled to receive a reimbursement of up to12 months of COBRA premiums, if the officer timely elects and remains eligible for COBRA.

Upon a termination of Mr. Pyatt’s employment by the Companywithout cause and with a change in control or by Mr. Pyatt for good reason after a change in control, Mr. Pyatt’s employmentagreement provides that he will be entitled to (i) any unpaid portion of his base salary and benefits accrued through the dateof termination; (ii) a severance payment (payable over 12 months) equal to three times his base salary in effect as of the dateof termination; (iii) a severance payment of $2 million (payable within 30 days of the date of termination); (v) accelerationof Mr. Pyatt’s outstanding equity awards; and (vi) he will also be entitled to receive a reimbursement of up to 12 monthsof COBRA premiums, if he timely elects and remains eligible for COBRA.

The employment agreements also contain customary confidentiality,non-competition and non-solicitation provisions. Under the non-compete provisions, during the term of his employment agreementand for a period of six months after termination of employment, the officer is prohibited from, directly or indirectly, engagingin or becoming interested financially in, as a principal, employee, partner, contractor, shareholder, agent, manager, owner, advisor,lender, guarantor, officer or director, any business that is engaged in the nutritional supplement industry and/or related products,subject to certain exceptions for passive investments.

Additionally, the non-solicitation provisions of the employmentagreements prohibit the officer from soliciting for employment any employee of the Company or any person who was an employee ofthe Company in the 90-day period before such solicitation. This prohibition applies during the officer’s employment withthe Company and for 12 months following the termination of the officer’s employment.

Change in Control Payments

The Employment Agreements referenced inthe above provide for payments upon termination or employment after a change in control in certain situations.

DIRECTOR COMPENSATION

Director Compensation in 2011

No compensation was paid to our directors in 2011 or 2010.

2012 Non-Employee Director Compensation Program

In October 2012, our board of directors adopted a non-employeedirector compensation program. Directors who are employees of the Company receive no additional compensation for their servicesas directors. Non-employee directors are compensated for their service on our board of directors as described below. The followingtable describes the components of compensation for non-employee directors in effect beginning October 2012: