MusclePharm (MSLPQ) 10-Q 25 Aug 20 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Aug. 18, 2020
Cover [Abstract]
Entity Registrant Name	MusclePharm Corp
Entity Central Index Key	0001415684
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Is Entity's Reporting Status Current?	No
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	NV
Entity File Number	000-53166
Entity Common Stock, Shares Outstanding		33,101,866
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash	$ 613	$ 2,317
Accounts receivable, net	5,548	6,273
Inventory	9,819	13,661
Prepaid expenses and other current assets	827	576
Total current assets	16,807	22,827
Property and equipment, net	433	513
Intangible assets, net	917	997
Operating lease right-of-use assets	1,742	0
Other assets	274	264
Total assets	20,173	24,601
Current liabilities:
Obligation under secured borrowing arrangement	3,443	1,285
Line of credit	2,500	1,500
Operating lease liability, current	765	0
Convertible note with a related party, net of discount	17,955	17,940
Accounts payable	19,932	24,797
Accrued and other liabilities	6,600	6,543
Accrued restructuring charges, current	0	493
Total current liabilities	51,195	52,558
Accrued restructuring charges, long-term	0	30
Operating lease liability, long-term	1,150	0
Other long-term liabilities	188	208
Total liabilities	52,533	52,796
Commitments and contingencies (Note 9)
Stockholders' deficit:
Common stock, par value of $0.001 per share; 100,000,000 shares authorized, 16,526,401 and 16,190,288 shares issued as of March 31, 2019 and December 31, 2018, respectively; and 15,650,780 and 15,314,667 shares outstanding as of March 31, 2019 and December 31, 2018, respectively	15	15
Additional paid-in capital	159,105	158,944
Treasury stock, at cost; 875,621 shares	(10,039)	(10,039)
Accumulated other comprehensive loss	(5)	(238)
Accumulated deficit	(181,436)	(176,877)
Total stockholders' deficit	(32,360)	(28,195)
Total liabilities and stockholders' deficit	$ 20,173	$ 24,601

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value	$ .001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	16,526,401	16,190,288
Common stock, shares outstanding	15,650,780	15,314,667
Treasury stock, shares	875,621	875,621

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Revenue, net	$ 18,775	$ 24,187
Cost of revenue	15,855	19,165
Gross profit	2,920	5,022
Operating expenses:
Advertising and promotion	751	814
Salaries and benefits	1,880	2,154
Selling, general and administrative	2,642	2,487
Research and development	247	212
Professional fees	726	720
Total operating expenses	6,246	6,387
Loss from operations	(3,326)	(1,365)
Other (expense) income:
Loss on settlement obligations	(4)	0
Interest and other expense, net	(1,165)	(1,077)
Loss before provision for income taxes	(4,495)	(2,442)
Provision for income taxes	10	69
Net loss	$ (4,505)	$ (2,511)
Net loss per share, basic and diluted	$ (0.30)	$ (0.17)
Weighted average shares used to compute net loss per share, basic and diluted	15,183,402	14,957,217

Consolidated Statement of Compr

Consolidated Statement of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net loss	$ (4,505)	$ (2,511)
Other comprehensive loss:
Change in foreign currency translation adjustment	179	8
Comprehensive loss	$ (4,326)	$ (2,503)

Consolidated Statement of Chang

Consolidated Statement of Changes in Stockholders' Deficit - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Beginning balance (in shares) at Dec. 31, 2017	14,983,554
Beginning balance at Dec. 31, 2017	$ 14	$ 158,396	$ (10,039)	$ (150)	$ (165,069)	$ (16,848)
Adjustment due to adoption of ASC 606 (Note 2)					(1,053)	(1,053)
Beginning balance (as restated) (in shares)	14,983,554
Beginning balance (as restated)	$ 14	158,396	(10,039)	(150)	(166,122)	(17,901)
Stock-based compensation for issuance and amortization of restricted stock awards to employees, executives, and directors		121				121
Stock-based compensation for issuance of stock options to an executive or a director		16				16
Issuance of shares of common stock related to the payment of interest on a related party note (in shares)	81,113
Issuance of shares of common stock related to the payment of interest on a related party note		53				53
Change in foreign currency translation adjustment				8		8
Net loss					(2,511)	(2,511)
Ending balance (in shares) at Mar. 31, 2018	15,064,667
Ending balance at Mar. 31, 2018	$ 14	158,586	(10,039)	(142)	(168,633)	(20,214)
Beginning balance (in shares) at Dec. 31, 2018	15,314,667
Beginning balance at Dec. 31, 2018	$ 15	158,944	(10,039)	(238)	(176,877)	(28,195)
Stock-based compensation for issuance and amortization of restricted stock awards to employees, executives, and directors		65				65
Issuance of shares of common stock related to the payment of advertising services (in shares)	336,113
Issuance of shares of common stock related to the payment of advertising services		96				96
Change in foreign currency translation adjustment				233	(54)	179
Net loss					(4,505)	(4,505)
Ending balance (in shares) at Mar. 31, 2019	15,650,780
Ending balance at Mar. 31, 2019	$ 15	$ 159,105	$ (10,039)	$ (5)	$ (181,436)	$ (32,360)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (4,505)	$ (2,511)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property and equipment	116	151
Amortization of intangible assets	80	80
Bad debt expense	167	164
Loss on disposal of property and equipment	5	0
Amortization of debt discount	15	15
Inventory provision	177	35
Stock-based compensation	64	137
Issuance of common stock to non-employees	97	0
Write off of cumulative translation adjustments	175	0
Changes in operating assets and liabilities:
Accounts receivable	557	(877)
Inventory	3,665	(663)
Prepaid expenses and other current assets	(250)	(93)
Other assets	179	(14)
Accounts payable and accrued liabilities	(5,169)	3,389
Accrued restructuring charges	(200)	(45)
Net cash used in operating activities	(4,827)	(232)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(13)	(14)
Net cash used in investing activities	(13)	(14)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit	1,000	0
Payments on line of credit	0	(1,000)
Proceeds from secured borrowing arrangement, net of reserves	8,495	13,494
Payments on secured borrowing arrangement, net of fees	(6,338)	(13,332)
Repayment of finance lease obligations	(26)	(34)
Net cash provided by (used in) financing activities	3,131	(872)
Effect of exchange rate changes on cash	5	4
Net change in cash	(1,704)	(1,114)
Cash - beginning of period	2,317	6,228
Cash - end of period	613	5,114
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	440	614
Cash paid for taxes	0	68
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment acquired in conjunction with capital leases	29	0
Operating lease right-of-use assets and lease obligations (ASC 842)	2,117	0
Interest paid through issuance of shares of common stock	$ 0	$ 53

Note 1 - Description of Busines

Note 1 - Description of Business	3 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business MusclePharm Corporation was incorporated in Nevada in 2006. Except as otherwise indicated herein or the context requires otherwise, the terms “MusclePharm,” the “Company,” “we,” “our” and “us” refer to MusclePharm Corporation and its subsidiaries. The Company is a scientifically-driven, performance lifestyle company that develops, manufactures, markets and distributes branded sports nutrition products and nutritional supplements. Our portfolio of recognized brands, including MusclePharm® and FitMiss®, is marketed and sold in more than 100 countries globally. The Company is headquartered in Burbank, California and, as of March 31, 2019, had the following wholly-owned operating subsidiaries: MusclePharm Canada Enterprises Corp., MusclePharm Ireland Limited and MusclePharm Australia Pty Limited. The Company has incurred significant losses and experienced negative cash flows since inception. As of March 31, 2019, the Company had cash of $0.6 million, a decline of $1.7 million from the December 31, 2018 balance of $2.3 million. As of March 31, 2019, we had a working capital deficit of $34.4 million, a stockholders’ deficit of $32.4 million and an accumulated deficit of $181.4 million resulting from recurring losses from operations. As a result of our history of losses and financial condition, there is substantial doubt about our ability to continue as a going concern. For financial information concerning more recent periods, see our reports for such periods filed with the Securities and Exchange Commission. The ability to continue as a going concern is dependent upon us generating profits in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management is evaluating different strategies to obtain financing to fund our expenses and achieve a level of revenue adequate to support our current cost structure. Financing strategies may include, but are not limited to, private placements of capital stock, debt borrowings, partnerships and/or collaborations. In response to the Company’s continued losses, in 2018, management implemented the following plans to improve the Company’s operating costs: 1) reduced our workforce; 2) renegotiated or terminated a number of contracts with endorsers in a strategic shift away from such arrangements and toward more cost-effective marketing and advertising efforts; and 3) discontinued a number of stock keeping units (“SKUs”) and wrote down inventory to net realizable value, or to zero in cases where the product was discontinued. Despite these measures, during 2019, the Company continued to incur substantial losses. In order to improve the Company’s operating results, management has continued to focus on its 2018 initiatives. In addition, during the fourth quarter of 2019, management implemented the following measures to improve gross margin: 1) reduced or eliminated sales to low or negative margin customers; 2) reduced product discounts and promotional activity; 3) implemented a more aggressive SKU reduction; and 4) formed a pricing committee to review all orders to better align gross margin expectations with product availability. As a result of these measures, as well as a reduction in protein prices, the Company realized increased gross margins in the fourth quarter of 2019, a trend which continued through the first and second quarters of 2020. Beginning in April 2020, the Company began to experience a slowdown, which has continued to date, in sales from its retail customers, including its largest customer. This decline has been partially offset by a growth in sales to our largest online customer, although there can be no assurances that such growth will continue, or that the Company will have the financial resources to produce the additional quantities required by this customer. Management believes reductions in operating costs, and continued focus on gross margin, primarily pricing controls and a reduction in product discounts and promotional activity with the Company’s customers, will allow us to ultimately achieve profitability, however, the Company can give no assurances that this will occur. To manage cash flow, the Company has entered into multiple financing arrangements. See additional information in “Note 8. Debt.” Our results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. There continues to be significant volatility and economic uncertainty in many markets and the ongoing COVID-19 pandemic has increased that level of volatility and uncertainty and has created economic disruption. We are actively managing our business to respond to the impact.

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Basis of Presentation and Principles of Consolidation The accompanying Consolidated Financial Statements have been prepared using the accrual method of accounting in accordance with generally accepted accounting principles in the United States (“GAAP”) and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Consolidated Financial Statements include the accounts of MusclePharm Corporation and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. The Company’s management believes the unaudited interim Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position as of March 31, 2019, results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ended December 31, 2019. These unaudited interim Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on August 24, 2020. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts, revenue discounts and allowances, the valuation of inventory and deferred tax assets, the assessment of useful lives, recoverability and valuation of long-lived assets, likelihood and range of possible losses on contingencies, restructuring liabilities, valuations of equity securities and intangible assets, fair value of derivatives, warrants and options, present value of lease liabilities, among others. Actual results could differ from those estimates. Revenue Recognition The Company adopted ASC 606, “ Revenue from Contracts with Customers, a. Nature of Goods and Services The Company sells a variety of protein products through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, specialty stores and websites and other e-commerce channels, all of which sell our products to consumers. b. When Performance Obligations are Satisfied For performance obligations related to the shipping and invoicing of products, control transfers at the point in time upon which finished goods are delivered to the Company’s customers or when finished goods are picked up by a customer or a customer’s carrier, depending on shipping terms. Once a product has been delivered or picked up by the customer, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. The Company considers control to have transferred upon delivery or customer receipt because the Company has an enforceable right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risk and rewards of ownership of the asset. c. Variable Consideration The Company conducts extensive promotional activities, primarily through the use of off-list discounts, slotting, coupons, cooperative advertising, periodic price reduction arrangements, and end-aisle and other in-store displays. The costs of such activities are netted against sales and are recorded when the related sale takes place. The reserves for sales returns and consumer and trade promotion liabilities are established based on the Company’s best estimate of the amounts necessary to settle future and existing obligations for products sold as of the balance sheet date. d. Practical Expedients The Company expenses incremental direct costs of obtaining a contract (broker commissions) when the related sale takes place, since the amortization period of the commissions paid for the sale of products is less than a year. These costs are recorded in “Selling, general and administrative” expenses in the accompanying consolidated statements of operations. The Company accounts for shipping and handling costs as fulfillment activities which are therefore recognized upon shipment of the goods. Shipping and handling costs related to inbound purchases of raw material and finished goods are included in cost of revenues in our consolidated statements of operations. For the three months ended March 31, 2019 and 2018, the Company incurred $0.3 million and $0.4 million, respectively, of inbound shipping and handling costs. Shipping and handling costs related to shipments to our customers is included in “Selling, general and administrative” expense in our consolidated statements of operations. For both the three months ended March 31, 2019 and 2018, the Company incurred $1.0 million, of shipping and handling costs related to shipments to our customers. The Company excludes from its revenue any amounts collected from customers for sales (and similar) taxes. During the three months ended March 31, 2019 and 2018, the Company recorded discounts, and to a lesser degree, sales returns, totaling $7.6 million and $7.9 million, respectively, which accounted for 29% and 25% of gross revenue in each period, respectively. The Company adopted ASC 606 using the modified retrospective method and the cumulative effect of this change in accounting method for the expected value of customer credits related to certain contracts in place, as defined by ASC 606, is presented below: Balance at December 31, 2017 Adjustment Balance at January 1, 2018 Accounts receivable, net $ 11,105 $ (1,053 ) $ 10,052 Accumulated deficit $ (165,069 ) $ (1,053 ) $ (166,122 ) Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The cash balance at times may exceed federally insured limits. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date. Significant customers are those that represent more than 10% of the Company’s net revenue or accounts receivable for each period presented. For each significant customer, percentage of net revenue and accounts receivable are as follows: Percentage of Net Revenue for the Three Months Ended March 31, Percentage of Net Accounts Receivable as of 2019 2018 (as restated) March 31, 2019 December 31, 2018 Customers Costco 26 % 38 % 10 % 16 % Amazon 12 % * 19 % 22 % iHerb 14 % * * * * Represents less than 10% of net revenue or net accounts receivable. The Company uses a limited number of non-affiliated suppliers for contract manufacturing of its products. The Company had the following concentration of purchases with contract manufacturers: For the three months Ended March 31, Vendor 2019 2018 (as restated) Nutra Blend 20 % 25 % S.K. Laboratories 40 % 22 % 4Excelsior * 18 % Bakery Barn * 14 % Prinova 10 % 17 % * Represents less than 10% of purchases. Share-Based Payments and Stock-Based Compensation Share-based compensation awards, including stock options and restricted stock awards, are recorded at estimated fair value on the applicable awards’ grant date, based on the estimated number of awards that are expected to vest. The grant date fair value is amortized on a straight-line basis over the time in which the awards are expected to vest, or immediately if no vesting is required. Share-based compensation awards issued to non-employees for services are recorded at fair value on the grant date. The fair value of restricted stock awards is based on the fair value of the stock underlying the awards on the grant date as there is no exercise price. The fair value of stock options is estimated using the Black-Scholes option-pricing model. The determination of the fair value of each stock award using this option-pricing model is affected by the Company’s assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards and the expected term of the awards based on an analysis of the actual and projected employee stock option exercise behaviors and the contractual term of the awards. Due to the Company’s limited experience with the expected term of options, the simplified method was utilized in determining the expected option term as prescribed in Staff Accounting Bulletin No. 110. The Company recognizes stock-based compensation expense over the requisite service period, which is generally consistent with the vesting of the awards, based on the estimated fair value of all stock-based payments issued to employees and directors that are expected to vest. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases Leases (842), Targeted Improvements The Company adopted the ASUs, as of January 1, 2019, using the modified retrospective transition method prescribed by ASU 2018-11. Under this transition method, financial results reported in periods prior to the first quarter of 2019 are unchanged. As a result of the adoption of the ASUs, the Company recorded a right-of-use (“ROU”) asset and liability of $2.1 million. Also as a result of the adoption, the Company reclassified $0.2 million of liabilities on its consolidated balance sheets as of January 1, 2019 against the operating lease ROU asset. The adoption of these ASUs did not result in a cumulative-effect adjustment to the opening balance of accumulated deficit. In addition, the Company elected the package of practical expedients permitted by the transition guidance. The adoption of these ASU’s did not have an impact on the Company’s consolidated statements of operations or cash flows. In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments On September 20, 2018, FASB issued Accounting Standards Update No. 2018-07, “Compensation - Stock Compensation” (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees. This ASU expands the scope of ASC Topic 718, “Compensation - Stock Compensation”, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. ASU 2018-07 supersedes ASC Subtopic 505-50, “Equity - Equity-Based Payments to Non-Employees”. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The new standard has been adopted by the Company. The Company has evaluated the impact of ASU 2018-07 on its consolidated financial statements and it did not have a material impact. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Note 3 - Fair Value of Financia

Note 3 - Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Management believes the fair values of the Company’s debt obligations approximate carrying value because the debts carry market rates of interest available to the Company. As of March 31, 2019, and December 31, 2018, the Company held no assets or liabilities that required re-measurement at fair value on a recurring basis. Purchase Commitment Upon the completion of the sale of a former subsidiary, BioZone Laboratories Inc. (“Biozone”), on May 9, 2016, the Company entered into a manufacturing and supply agreement whereby the Company agreed to minimum purchase requirements of products from BioZone over a three-year period. The Company fell below the requirements, and as a result, the Company reserved a total amount of $0.7 million to cover the estimated purchase commitment shortfall during the year ended December 31, 2018, which remained unchanged during the three months ended March 31, 2019. In July 2019, the Company settled this matter through the payment of $0.6 million and the issuance of 150,000 shares of the Company’s common stock, which was valued at $60,000 on the settlement date.

Note 4 - Restructuring

Note 4 - Restructuring	3 Months Ended
	Mar. 31, 2019
Restructuring and Related Activities [Abstract]
Restructuring	As part of an effort to better focus and align the Company’s resources toward profitable growth, on August 24, 2015, the Board authorized the Company to undertake steps to commence a restructuring of the business and operations, which concluded during the third quarter of 2016. As of December 31, 2018, the Company had a balance of $0.4 million, representing contract termination costs, and $0.1 million representing abandoned lease facilities. As of March 31, 2019, the Company made payments to settle $0.2 million of the outstanding contract termination costs, while the remaining balance of $0.2 million was paid in the second quarter of 2019. As a result of the adoption of the new lease standards, the restructuring liability for the company’s abandoned lease facilities was used to reduce the ROU asset, in accordance with the new standards. See additional information in “Note 6. Leases.”

Note 5 - Balance Sheet Componen

Note 5 - Balance Sheet Components	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	Inventory Inventory consisted solely of finished goods and raw materials, used to manufacture our products at one of our co-manufacturers as of March 31, 2019 and December 31, 2018. The Company records charges for obsolete and slow-moving inventory based on the age of the product as determined by the expiration date or otherwise determined to be obsolete. Products within one year of their expiration dates are considered for write-off purposes. Historically, the Company has had minimal returns with established customers. Other than write-off of inventory during restructuring activities, the Company incurred insignificant inventory write-offs during each of the three months ended March 31, 2019 and 2018. Inventory write-downs, once established, are not reversed as they establish a new cost basis for the inventory. Property and Equipment Property and equipment consisted of the following as of March 31, 2019 and December 31, 2018 (in thousands): As of March 31, 2019 As of December 31, 2018 Furniture, fixtures, and equipment $ 2,585 $ 3,511 Leasehold improvements 236 236 Vehicles 39 39 Displays 453 453 Website 497 497 Property and equipment, gross 3,810 4,736 Less: accumulated depreciation and amortization (3,377 ) (4,223 ) Property and equipment, net $ 433 $ 513 Depreciation and amortization expense related to property and equipment was $0.1 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively, which is included in “Selling, general, and administrative” expense in the accompanying consolidated statements of operations. Intangible Assets Intangible assets consisted of the following (in thousands): As of March 31, 2019 Gross Value Accumulated Amortization Net Carrying Value Remaining Weighted-Average Useful Lives (years) Amortized Intangible Assets Brand (apparel rights) $ 2,244 $ (1,327 ) $ 917 2.9 Total intangible assets $ 2,244 $ (1,327 ) $ 917 As of December 31, 2018 Gross Value Accumulated Amortization Net Carrying Value Remaining Weighted-Average Useful Lives (years) Amortized Intangible Assets Brand (apparel rights) $ 2,244 $ (1,247 ) $ 997 3.1 Total intangible assets $ 2,244 $ (1,247 ) $ 997 Intangible assets amortization expense was $0.1 million for each of the three months ended March 31, 2019 and 2018, respectively, which is included in “Selling, general, and administrative” expense in the accompanying consolidated statements of operations. As of March 31, 2019, the estimated future amortization expense of intangible assets is as follows (in thousands): For the Year Ending December 31, Remainder of 2019 $ 240 2020 320 2021 320 2022 37 Total amortization expense $ 917

Note 6 - Leases

Note 6 - Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Leases	The Company has operating leases for warehouse facilities and office spaces across the U.S. The remaining lease terms for these leases range from 1 to 4 years. The Company also leases manufacturing and warehouse equipment under finance lease arrangements, which expire at various dates through July 2020. The Company does not intend to extend the lease terms expiring in 2020. In adopting the new lease standards (“ASC 842”), the Company has elected the “package of practical expedients,” which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, as the latter is not applicable to the Company. In addition, the Company elected not to apply ASC 842 to arrangements with lease terms of 12 month or less. The Company determines if a contract contains a lease when the contract conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a ROU asset and a lease liability. ROU assets and lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. At adoption, the Company reduced the ROU asset through a derecognition of the restructuring liability for its abandoned lease facilities. Subsequent to adoption, the Company no longer recognized lease expense on a straight-line basis, as the impact of the derecognition resulted in a front-loading of the lease expenses. Supplemental balance sheet information related to leases was as follows (in thousands): Balance Sheet Classification March 31, 2019 Assets Operating ROU assets, net $ 1,742 Finance Property and equipment, net 148 Total Assets 1,890 Liabilities Current liabilities: Operating Operating lease liability - current $ 765 Finance Current accrued liability 122 Total current liabilities 887 Non-current liabilities: Operating Operating lease liability - long term 1,150 Finance Other long term liabilities 26 Total non-current liabilities 1,176 Total lease liabilities $ 2,063 The Company has elected the practical expedient to combine lease and non-lease components into a single component for all of its leases. Fixed lease costs represent the explicitly quantified lease payments prescribed by the lease agreement and are included in the measurement of the ROU asset and corresponding lease liability. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented as part of the initial ROU asset or lease liability. The Company's lease agreements do not contain any material restrictive covenants. The components of lease cost for operating and finance leases for the three months ended March 31, 2019 were as follows (in thousands): Income Statement Classification Three months ended March 31, 2019 Operating lease cost Selling, general and administrative $ 249 Finance lease cost: Amortization of ROU asset Selling, general and administrative 27 Interest on lease liabilities Selling, general and administrative 2 Total finance lease cost 29 Variable lease payments Selling, general and administrative 64 Sublease income Other income (99 ) Total lease cost $ 243 The Company had no short-term leases as of March 31, 2019. The Company’s leases do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate based on the information available at the effective date in determining the present value of future payments for those leases. Supplemental cash flow information related to leases was as follows: Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities (in thousands): Operating cash flows from operating leases 202 Operating cash flows from finance leases 2 Financing cash flows from finance leases 26 The weighted average remaining lease term was as follows: Operating leases (in years) 2.7 Finance leases (in years) 1.2 The weighted average discount rate was as follows: Operating leases 18 % Finance leases 5 % The maturities of lease liabilities at March 31, 2019 were as follows (in thousands): Operating Finance Remaining nine months of the year ending 2019 $ 793 $ 98 2020 808 55 2021 481 — 2022 369 — Thereafter — — Total future undiscounted lease payments 2,451 153 Less amounts representing interest (536 ) (5 ) Present value of lease liabilities $ 1,915 $ 148

Note 7 - Interest and Other Exp

Note 7 - Interest and Other Expense, Net	3 Months Ended
	Mar. 31, 2019
Other Income and Expenses [Abstract]
Interest and Other Expense, Net	For the three months ended March 31, 2019 and 2018, “Interest and other expense, net” consisted of the following (in thousands): For the Three Months Ended March 31, 2019 2018 (as restated) Interest expense, related party $ (532 ) $ (541 ) Interest expense, related party debt discount (15 ) (15 ) Interest expense, other (293 ) (67 ) Interest expense, secured borrowing arrangement (225 ) (346 ) Foreign currency transaction loss (200 ) (113 ) Other 100 5 Total interest and other expense, net $ (1,165 ) $ (1,077 ) “Other” for 2019 includes sublease income and interest income.

Note 8 - Debt

Note 8 - Debt	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Debt	As of March 31, 2019 and December 31, 2018, the Company’s debt consisted of the following (in thousands): As of March 31, 2019 As of December 31,2018 Refinanced convertible note, related party $ 18,000 $ 18,000 Obligations under secured borrowing arrangement 3,443 1,285 Line of credit – inventory financing 2,500 1,500 Unamortized debt discount, related party (45 ) (60 ) Total debt 23,898 20,725 Less: current portion (23,898 ) (20,725 ) Long term debt $ — $ — Related-Party Refinanced Convertible Note On November 3, 2017, the Company entered into the refinancing with Mr. Ryan Drexler, the Company’s Chairman of the Board of Directors, Chief Executive Officer and President (the “Refinancing”). As part of the Refinancing, the Company issued to Mr. Drexler an amended and restated convertible secured promissory note (the “Refinanced Convertible Note”) in the original principal amount of $18,000,000, which amended and restated (i) a convertible secured promissory note dated as of December 7, 2015, amended as of January 14, 2017, in the original principal amount of $6,000,000 with an interest rate of 8% prior to the amendment and 10% following the amendment (the “2015 Convertible Note”), (ii) a convertible secured promissory note dated as of November 8, 2016, in the original principal amount of $11,000,000 with an interest rate of 10% (the “2016 Convertible Note”) , and (iii) a secured demand promissory note dated as of July 27, 2017, in the original principal amount of $1,000,000 with an interest rate of 15% (the “2017 Note”, and together with the 2015 Convertible Note and the 2016 Convertible Note, collectively, the “Prior Notes”). The due date of the 2015 Convertible Note and the 2016 Convertible Note was November 8, 2017. The 2017 Note was due on demand. The $18.0 million Refinanced Convertible Note bears interest at the rate of 12% per annum. Interest payments are due on the last day of each quarter. At the Company’s option (as determined by its independent directors), the Company may repay up to one-sixth of any interest payment by either adding such amount to the principal amount of the note or by converting such interest amount into an equivalent amount of the Company’s common stock. Any interest not paid when due shall be capitalized and added to the principal amount of the Refinanced Convertible Note and bear interest on the applicable interest payment date along with all other unpaid principal, capitalized interest, and other capitalized obligations. Both the principal and the interest under the Refinanced Convertible Note are due on December 31, 2019, unless converted earlier. Mr. Drexler may convert the outstanding principal and accrued interest into shares of the Company’s common stock at a conversion price of $1.11 per share at any time. The Company may prepay the Refinanced Convertible Note by giving Mr. Drexler between 15 and 60 days’ notice depending upon the specific circumstances, subject to Mr. Drexler’s conversion right. The Refinanced Convertible Note contains customary events of default, including, among others, the failure by the Company to make a payment of principal or interest when due. Following an event of default, interest will accrue at the rate of 14% per annum. In addition, following an event of default, any conversion, redemption, payment or prepayment of the Refinanced Convertible Note will be at a premium of 105%. The Refinanced Convertible Note also contains customary restrictions on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth in the Refinanced Convertible Note. The Refinanced Convertible Note is subordinated to certain other indebtedness of the Company. As part of the Refinancing, the Company and Mr. Drexler entered into a restructuring agreement (the “Restructuring Agreement”) pursuant to which the parties agreed to amend and restate the security agreement resulting in a Third Amended and Restated Security Agreement (the “Amended Security Agreement”) in which the Prior Notes were secured by all of the assets and properties of the Company and its subsidiaries whether tangible or intangible. Pursuant to the Restructuring Agreement, the Company agreed to pay, on the effective date of the Refinancing, all outstanding interest on the Prior Notes through November 8, 2017 and certain fees and expenses incurred by Mr. Drexler in connection with the Restructuring. On September 16, 2019, Mr. Ryan Drexler, the Chief Executive Officer, President and Chairman of the Board of Directors of MusclePharm Corporation, a Nevada corporation (the “Company”), delivered a notice to the Company and its independent directors of his election to convert, effective as of September 16, 2019 (the “Notice Date”), $18,000,000 of the amount outstanding under that certain Amended and Restated Convertible Secured Promissory Note, dated as of November 8, 2017 (the “Note”), issued by the Company to Mr. Drexler, into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a conversion price of $1.11 per share, pursuant to the terms and conditions of the Note (the “Partial Conversion”). As of the Notice Date, the total amount outstanding under the Note (including principal and accrued and unpaid interest) was equal to $19,262,910. Pursuant to the terms of the Note, the Company instructed the transfer agent for its shares to issue to Mr. Drexler 16,216,216 shares (the “Shares”) of its Common Stock in respect of the Partial Conversion. The outstanding principal and the interest, due on December 31, 2019, were refinanced under a new agreement on July 1, 2020. See additional information in “Note 16. Subsequent Events.” For the three months ended March 31, 2019 and 2018, interest expense, including the amortization of debt discount, related to the related party convertible secured promissory notes was $0.5 million and $0.6 million, respectively. During the three months ended March 31, 2019 and 2018, $0.4 million and $0.3 million, respectively, in interest was paid in cash to Mr. Drexler. Related-Party Revolving Note On October 4, 2019, the Company entered into a secured revolving promissory note (the “Revolving Note”) with Mr. Drexler. Under the terms of the Revolving Note, the Company can borrow up to $3.0 million. The Revolving Note bears interest at the rate of 12% annually. The use of funds will be solely for the purchase of whey protein to be used in the manufacturing of MusclePharm products. The Company may prepay the Revolving Note by giving Mr. Drexler one days’ written notice. The Revolving Note contains customary events of default, including, among others, the failure by the Company to make a payment of principal or interest when due. Following an event of default, Mr. Drexler is entitled to accelerate the entire indebtedness under the Revolving Note. The Revolving Note also contains customary restrictions on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts. The Revolving Note is subordinated to certain other indebtedness of the Company held by Crossroads In connection with the Revolving Note, the Company and Mr. Drexler entered into a security agreement dated October 4, 2019 pursuant to which the Revolving Note is secured by all of the assets and properties of the Company and its subsidiaries whether tangible or intangible. As of December 31, 2019, the outstanding balance on the revolving note was $1.2 million. Both the outstanding principal and all accrued interest, which became due on March 31, 2020, were refinanced under a new agreement on July 1, 2020. . The revolving note is included in “Line of credit” in the consolidated balance sheets. See additional information in “Note 16. Subsequent Events.” Related-Party Note Payable The Company entered into a collateral receipt and security agreement with Mr. Drexler, dated December 27, 2019 pursuant to which Mr. Drexler agreed to post bond relating to the judgment ruled on the ThermoLife case, pending the appeal. The amount paid by Mr. Drexler on behalf of the Company, including fees, was $0.25 million. The amount, which was outstanding as of December 31, 2019, was refinanced under a new agreement on July 1, 2020. The note payable is included in “Convertible note with a related party, net of discount” in the consolidated balance sheets. See additional information in “Note 16. Subsequent Events.” Line of Credit - Inventory Financing On October 6, 2017, the Company entered into a Loan and Security Agreement (“Security Agreement”) with Crossroads Financial Group, LLC (“Crossroads”). Pursuant to the Security Agreement, the Company may borrow up to 70% of its Inventory Cost or up to 75% of Net Orderly Liquidation Value (each as defined in the Security Agreement), up to a maximum amount of $3.0 million at an interest rate of 1.5% per month, subject to a minimum monthly fee of $22,500. Subsequent to the end of 2017, the maximum amount was increased to $4.0 million. The term of the Security Agreement automatically extends in one-year increments, unless earlier terminated pursuant to the terms of the Security Agreement. The Security Agreement contains customary events of default, including, among others, the failure to make payments on amounts owed when due, default under any other material agreement or the departure of Mr. Drexler. The Security Agreement also contains customary restrictions on the ability of the Company to, among other things, grant liens, incur debt, and transfer assets. Under the Security Agreement, the Company agreed to grant Crossroads a security interest in all of the Company’s present and future accounts, chattel paper, goods (including inventory and equipment), instruments, investment property, documents, general intangibles, intangibles, letter of credit rights, commercial tort claims, deposit accounts, supporting obligations, documents, records and the proceeds thereof. As of March 31, 2019, and December 31, 2018, we owed Crossroads $2.5 million and $1.5 million, respectively. On April 1, 2019, the Company and Crossroads amended the terms of the agreement. The agreement was extended until March 31, 2020, the rate was modified to 1.33% per month, and increased the amount the Company can borrow from $3.0 million to $4.0 million. On February 26, 2020, the Company and Crossroads amended the terms of the agreement. The agreement was extended until April 1, 2021 and the amount the Company can borrow was decreased from $4.0 million to $3.0 million. Secured Borrowing Arrangement In January 2016, the Company entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Prestige Capital Corporation (“Prestige”) pursuant to which the Company agreed to sell and assign and Prestige agreed to buy and accept, certain accounts receivable owed to the Company (“Accounts”). Under the terms of the Purchase and Sale Agreement, upon the receipt and acceptance of each assignment of Accounts, Prestige will pay the Company 80% of the net face amount of the assigned Accounts, up to a maximum total borrowing of $12.5 million subject to sufficient amounts of accounts receivable to secure the loan. The remaining 20% will be paid to the Company upon collection of the assigned Accounts, less any chargebacks (including chargebacks for any customer amounts that remain outstanding for over 90 days), disputes, or other amounts due to Prestige. Prestige’s purchase of the assigned Accounts from the Company will be at a discount fee which varies from 0.7% to 4%, based on the number of days outstanding from the assignment of Accounts to collection of the assigned Accounts. In addition, the Company granted Prestige a continuing security interest in and lien upon all accounts receivable, inventory, fixed assets, general intangibles, and other assets. Prestige will have no recourse against the Company if payments are not made due to the insolvency of an account debtor within 90 days of invoice date, with the exception of international and certain domestic customers During the three months ended March 31, 2019 and 2018, the Company assigned to Prestige, accounts with an aggregate face amount of approximately $10.6 million and $16.9 million, respectively, for which Prestige paid to the Company approximately $8.5 million and $13.5 million, respectively, in cash. During the three months ended March 31, 2019 and 2018, $6.3 million and $13.3 million, respectively, was repaid to Prestige, including fees and interest.

Note 9 - Commitments and Contin

Note 9 - Commitments and Contingencies	3 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Leases The Company leases office and warehouse facilities under operating leases, which expire at various dates through 2022. The Company also leases manufacturing and warehouse equipment under finance leases, which expire at various dates through July 2020. The Company does not intend to extend the lease terms expiring in 2020. See additional information in “Note 6. Leases.” Purchase Commitment Upon the completion of the sale of a former subsidiary, BioZone, on May 9, 2016, the Company entered into a manufacturing and supply agreement whereby the Company agreed to minimum purchase requirements of products from BioZone over a three-year period. The Company fell below the requirements, and as a result, the Company reserved a total amount of $0.7 million to cover the estimated purchase commitment shortfall during the year ended December 31, 2018, which remained unchanged during the three months ended March 31, 2019. In July 2019, the Company settled this matter through the payment of $0.6 million and the issuance of 150,000 shares of the Company’s common stock, which was valued at $60,000 on the settlement date. Settlements Manchester City Football Group The Company was engaged in a dispute with City Football Group Limited (“CFG”), the owner of Manchester City Football Group, concerning amounts allegedly owed by the Company under a sponsorship agreement with CFG (the “Sponsorship Agreement”). In August 2016, CFG commenced arbitration in the United Kingdom against the Company, seeking approximately $8.3 million for the Company’s purported breach of the Sponsorship Agreement. On July 28, 2017, the Company approved a Settlement Agreement (the “CFG Settlement Agreement”) with CFG effective July 7, 2017. The CFG Settlement Agreement represents a full and final settlement of all litigation between the parties. Under the terms of the agreement, the Company agreed to pay CFG a sum of $3 million, which was recorded as accrued expenses in 2017. The settlement consists of a $1 million payment that was advanced by a related party on July 7, 2017, a $1 million installment paid on July 7, 2018 and a subsequent $1 million installment payment to be paid by July 7, 2019. Of this amount, the Company has remitted $0.3 million. During the three months ended March 31, 2019 and 2018, the Company recorded a charge of $29,000 and $61,000, respectively. This charge, representing imputed interest, is included in “Interest and other expense, net” in the Company’s consolidated statements of operations. Former Executive Lawsuit The Company was engaged in a dispute with Mr. Richard Estalella (“Estalella”) concerning amounts allegedly owed by the Company under an employment agreement with Estalella. Estalella was seeking certain equitable relief and unspecified damages. On May 7, 2018, the Court vacated the trial in contemplation of the parties’ settlement of this matter. On June 19, 2018, the Company approved a settlement agreement (the “Estalella Settlement Agreement”) with Estalella, concerning amounts allegedly owed by the Company under an employment agreement with Estalella (the “Employment Litigation”). The Estalella Settlement Agreement represents a full and final settlement of the Employment Litigation. Under the terms of the agreement, the Company agreed to pay Estalella a sum of $0.93 million consisting of a $0.33 million initial payment that was made in July 2018, and subsequent payments of $0.15 million installments to be paid within 90, 180, 270 and 360 days of the initial payment, respectively. As of March 31, 2019, the outstanding payment of $0.15 million was recorded in accrued expenses, and was subsequently paid in the second quarter of 2019. Manziel Matter On July 15, 2014, JMAN2 General LP (“JMAN2”), Jonathan Manziel and MusclePharm entered into an endorsement agreement, pursuant to which the Endorser would provide certain endorsements of MusclePharm’s businesses, products and services in exchange for payments to JMAN2 by MusclePharm. On April 17, 2018, JMAN2 commenced an action against MusclePharm in the District Court, City and County of Denver, Colorado and on July 19, 2018 filed an amended complaint against MusclePharm, in which JMAN2 asserted various claims against MusclePharm concerning their rights and obligations under the Endorsement Agreement. On April 10, 2019, a settlement agreement was reached for an amount of $0.1 million, which had been recorded as an accrued expense as of December 31, 2018. Of this amount, $70,000 was paid in 2019, while the balance was paid in the first quarter of 2020. United World Wrestling Arbitration In November 2017, United World Wrestling (“UWW”), an amateur wrestling governing body, initiated arbitration against the Company before the Court of Arbitration for Sport in Lausanne, Switzerland (“CAS”), alleging that the Company owed it $0.6 million, comprised of a $0.4 million sponsorship fee plus accrued interest, under the terms of a 2015 sponsorship agreement. In September 2018, the CAS issued an order and decision in UWW’s favor for $0.4 million, plus interest at 12% per annum, as well as attorney’s fees in the amount of 5,000 Swiss Francs. On January 25, 2019, the two parties reached a settlement agreement for $0.4 million, which had been recorded as an accrued expense as of December 2018. As of March 31, 2019, $0.2 million was paid, and the outstanding balance of $0.2 million was paid in the second quarter of 2019. Durnford Matter On July 28, 2015, Plaintiff, Tucker Durnford, filed a First Amended Class Action Complaint which alleged that the Company’s (now discontinued) Arnold Iron Mass product violates consumer protection laws by misleading consumers about the amount and sources of protein in the product. On February 10, 2016, the court granted our motion to dismiss the complaint on federal preemption grounds. On October 12, 2018, the Ninth Circuit reversed the dismissal. On October 8, 2019, the parties successfully mediated the case to a settlement of $0.15 million, which had been recorded as an accrued expense as of December 31, 2018. Of the settlement amount, $0.1 million was paid during the fourth quarter of 2019 and the balance was paid during the first quarter of 2020. Contingencies In the normal course of business or otherwise, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred. The Company provides disclosures for material contingencies when there is a reasonable possibility that a loss or an additional loss may be incurred. In assessing whether a loss is a reasonable possibility, the Company may consider the following factors, among others: the nature of the litigation, claim or assessment, available information, opinions or views of legal counsel and other advisors, and the experience gained from similar cases. As of March 31, 2019, the Company was involved in the following material legal proceedings described below. ThermoLife International In January 2016, ThermoLife International LLC (“ThermoLife”), a supplier of nitrates to MusclePharm, filed a complaint against the Company in Arizona state court. ThermoLife alleged that the Company failed to meet minimum purchase requirements contained in the parties’ supply agreement. In March 2016, the Company filed counterclaims alleging that ThermoLife’s products were defective. Through orders issued in September and November 2018, the court dismissed MusclePharm’s counterclaims and found that the Company was liable to ThermoLife for failing to meet its minimum purchase requirements. The court held a bench trial on the issue of damages in October 2019, and on December 4, 2019, the court entered judgment in favor of ThermoLife and against the Company in the amount of $1.6 million, comprised of $0.9 million in damages, interest in the amount of $0.3 million and attorneys’ fees and costs in the amount of $0.4 million. The Company recorded $1.6 million in accrued expenses as of December 31, 2018. In the interim, the Company filed an appeal, which is in the process of being briefed, and has posted bonds in the total amount of $0.6 million in order to stay execution on the judgment pending appeal. Of the $0.6 million, $0.25 million (including fees) was paid by Mr. Drexler on behalf of the Company on December 31, 2019. See “Note 8. Debt” for additional information. Subsequent to December 31, 2019 the balance of $0.35 million was secured by a personal guaranty from Mr. Drexler, while the associated fees of $12,500 was paid by the Company. The Company intends to continuously vigorously pursuing its defenses, including on appeal. White Winston Select Asset Fund Series MP-18, LLC et al., v MusclePharm Corp., et al., (Nev. Dist. Ct.; Cal. Superior Court; Colorado Dist. Ct.; Mass. Super. Ct.) On August 21, 2018, White Winston Select Asset Fund Series MP-18, LLC and White Winston Select Asset Fund, LLC (together “White Winston”) initiated a derivative action against MusclePharm and its directors (collectively the “director defendants”). White Winston alleges that the director defendants breached their fiduciary duties by improperly approving the refinancing of three promissory notes issued by MusclePharm to Drexler (the “Amended Note”), in exchange for $18.0 million in loans. White Winston alleges that this refinancing improperly diluted their economic and voting power and constituted an improper distribution in violation of Nevada law. In its complaint, White Winston sought the appointment of a receiver over MusclePharm, a permanent injunction against the exercise of Drexler’s conversion right under the Amended Note, and other unspecified monetary damages. On September 13, 2018, White Winston filed an amended complaint, which added a former MusclePharm executive, as a plaintiff (together with White Winston, the “White Winston Plaintiffs”). On December 9, 2019, the White Winston Plaintiffs filed a Second Amended Complaint, in which they added allegations relating to the resignation of MusclePharm’s auditor, Plante & Moran PLLC (“Plante Moran”). MusclePharm has moved to dismiss the Second Amended Complaint. That motion has not yet been fully briefed. Along with its complaint, the White Winston Plaintiffs also filed a motion for a temporary restraining order (“TRO”) and preliminary injunction enjoining the exercise of Drexler’s conversion right under the Amended Note. On August 23, 2018, the Nevada district court issued an ex parte TRO. On September 14, 2018, the court let the TRO expire and denied the White Winston Plaintiffs’ request for a preliminary injunction, finding, among other things, that the White Winston Plaintiffs did not show a likelihood of success on the merits of the underlying action and failed to establish irreparable harm. Following the court’s decision, MusclePharm filed a motion seeking to recoup the legal fees and costs it incurred in responding to the preliminary injunction motion. On October 31, 2019, the court awarded MusclePharm $56,000 in fees and costs. The White Winston Plaintiffs have appealed that award. Due to the uncertainty associated with determining our liability, if any, and due to our inability to ascertain with any reasonable degree of likelihood, as of the date of this report, the outcome of the trial, the Company has not recorded an estimate for its potential liability. On June 17, 2019, the White Winston Plaintiffs moved for the appointment of a temporary receiver over MusclePharm, citing Plante Moran’s resignation. The court granted the White Winston Plaintiffs’ request to hold an evidentiary hearing on the motion, but the date for that hearing was not set as of the date hereof. On July 30, 2019, the White Winston Plaintiffs filed an action in the Superior Court of the State of California in and for the County of Los Angeles, seeking access to MusclePharm’s books and records. MusclePharm has answered the petition, asserting as a defense that the request does not have a proper purpose. A trial on the petition has been set for February 25, 2021. The Company intends to vigorously defend these actions. IRS Audit On April 6, 2016, the Internal Revenue Service (“IRS”) selected our 2014 Federal Income Tax Return for audit. As a result of the audit, the IRS proposed certain adjustments with respect to the tax reporting of our former executives’ 2014 restricted stock grants. Due to the Company’s current and historical loss position, the proposed adjustments would have no material impact on the Company’s Federal income tax. On October 5, 2016, the IRS commenced an audit of our employment and withholding tax liability for 2014. The IRS contends that the Company inaccurately reported the value of the restricted stock grants and improperly failed to provide for employment taxes and Federal tax withholding on these grants. In addition, the IRS is proposing certain penalties associated with the Company’s filings. On April 4, 2017, the Company received a “30-day letter” from the IRS asserting back taxes and penalties of approximately $5.3 million, of which $4.4 million related to withholding taxes, specifically, income withholding and Social Security taxes, and $0.9 million related to penalties. Additionally, the IRS asserts that the Company owes information reporting penalties of approximately $2.0 million. The Company’s counsel has submitted a formal protest to the IRS disputing on several grounds all of the proposed adjustments and penalties on the Company’s behalf, and the Company has been pursuing this matter vigorously through the IRS appeal process. An Appeals Conference was held with the IRS in Denver, Colorado on July 31, 2019. At the conference, the Company made substantial arguments challenging the IRS’s claims for employment taxes and penalties. On December 16, 2019, a further Appeals Conference was held with the IRS by telephone. At the telephone conference, the Appeals Officer confirmed that he agreed with the Company’s argument that the failure to deposit penalties should be conceded by the IRS. The failure to deposit penalties total about $2.0 million. Thus, with this concession, the IRS’s claims have been reduced from approximately $7.3 million to about $5.3 million. The remaining issue in dispute in this matter involves the fair market value of restricted stock units in the Company granted to certain former officers (the “Former Officers”) of the Company under Internal Revenue Code § 83. The Company and the IRS disagree as to the value of the restricted stock on the date of the grants, i.e., October 1, 2014. The Company and the IRS have exchanged expert valuation reports on the fair market value of the stock and have had extensive negotiations on this issue. The parties, however, have not been able to reach an agreement with respect to the value of the stock. The IRS has also made parallel claims regarding the restricted stock units against the Former Officers of the Company. The IRS has asserted that the Former Officers received ordinary income from the stock grants, and that they owe additional personal income taxes based on the fair market value of the stock. The Former Officers’ cases, unlike the Company’s case, are pending before the United States Tax Court. In the Tax Court litigation, the Former Officers are challenging the IRS’s determinations regarding the fair market value of the restricted stock grants on October 1, 2014. The Former Officers have separate counsel from the Company. The same IRS Appeals Officer and Revenue Agents assigned to the Company’s case are also involved in the cases for the Former Officers. Throughout the proceedings, the Company has argued to the IRS that it is the Former Officers who are directly and principally liable for the amount of any tax due, and not the Company. The Former Officers cases were scheduled for trial in Tax Court on March 9, 2020. The trial of the cases was continued by the Court on February 4, 2020. The basis for the continuance was that the IRS and the Former Officers had made progress toward a settlement of the valuation issue involving the grants of the restricted stock. The outcome of these settlement negotiations will be relevant to the Company’s case. The Company is closely monitoring the settlement discussions between the IRS and the Former Officers. The Tax Court has ordered the Former Officers to file status reports regarding progress of their settlement negotiations with the IRS on or before October 22, 2020. Due to the uncertainty associated with determining our liability for the asserted taxes and penalties, if any, and to our inability to ascertain with any reasonable degree of likelihood, as of the date of this report, the outcome of the IRS appeals process, the Company has not recorded an estimate for its potential liability, if any, associated with these taxes. On August 22, 2018, Richard Estalella filed an action against the Company and two other defendants in the Colorado District Court for the County of Denver, seeking damages arising out of the IRS’s assertion of tax liability and penalties relating to the 2014 restricted stock grants. The Company has answered Estalella’s complaint, asserted counterclaims against Estalella for his failure to ensure that all withholding taxes were paid in connection with the 2014 restricted stock grants, and filed cross-claims against a valuation firm named in the action for failing to properly value the 2014 restricted stock grants for tax purposes. The Company is waiting on the next steps from the court and will continue to vigorously litigate the matter. 4Excelsior Matter On March 18, 2019, 4Excelsior, a manufacturer of MusclePharm products, filed an action against MusclePharm in the Superior Court of the State of California for the County of Los Angeles, claiming approximately $6.2 million in damages relating to allegedly unpaid invoices, as well as approximately $7.8 million in consequential damages. On January 27, 2020, MusclePharm filed a counterclaim against 4Excelsior seeking unidentified damages relating to, among other things, 4Excelsior’s failure to fulfill a purchase order. MusclePharm also moved to strike 4Excelsior’s consequential damages on the grounds that they are unrecoverable under the Uniform Commercial Code. The court denied that motion, and the action has proceeded to discovery. The Company recognized a liability of $5.0 million (past due invoices plus interest) as of March 31, 2019. Trial has not yet been set, although a Trial Setting Conference has been set for September 21, 2020. The Company intends to vigorously defend this action. Nutrablend Matter On February 27, 2020, Nutrablend, a manufacturer of MusclePharm products, filed an action against MusclePharm in the United States District Court for the Eastern District of California, claiming approximately $3.1 million in allegedly unpaid invoices. These invoices relate to the third and fourth quarter of 2019, and a liability has been recorded in the books for the related periods. Trial has been set for November 17, 2020. The Company intends to vigorously defend this action.

Note 10 - Stockholders' Deficit

Note 10 - Stockholders' Deficit	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Stockholders' Deficit	Common Stock The fair value of all stock issuances is based upon the quoted closing trading price on the date of issuance. Common stock outstanding as of March 31, 2019 and December 31, 2018 includes shares legally outstanding even if subject to future vesting. For the three months ended March 31, 2019, the Company had the following transactions related to its common stock including restricted stock awards (in thousands, except share and per share data): Transaction Type Quantity (Shares) Valuation Range of Value per Share Stock issued for advertising services 336,113 $ 303 $ 0.90 Total 336,113 $ 303 $ 0.90 For the three months ended March 31, 2018, the Company had the following transactions related to its common stock including restricted stock awards (in thousands, except share and per share data): Transaction Type Quantity (Shares) Valuation Range of Value per Share Stock issued to related party for interest 81,113 $ 53 $ 0.65 Total 81,113 $ 53 $ 0.65 Warrants For the three months ended March 31, 2019 and 2018, the Company did not issue any warrants. As of both March 31, 2019 and 2018, the Company had outstanding warrants of 1,389,378 shares. Treasury Stock For the three months ended March 31, 2019 and 2018, the Company did not repurchase any shares of its common stock and held 875,621 shares in treasury as of both March 31, 2019 and 2018.

Note 11 - Stock-Based Compensat

Note 11 - Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Restricted Stock The Company’s stock-based compensation for the three months ended March 31, 2019 and 2018 consisted primarily of restricted stock awards. The restricted stock awards granted to employees, executives and Board members during the three months ended March 31, 2019 was as follows: Unvested Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value Unvested balance – December 31, 2018 197,500 $ 1.05 Granted — — Vested (62,500 ) 1.00 Unvested balance – March 31, 2019 135,000 1.07 There were no restricted stock awards granted during the three months ended March 31, 2018 or 2019, respectively. As of March 31, 2019, the total unrecognized expense for unvested restricted stock awards, net of expected forfeitures, was $63,000, which is expected to be amortized over a weighted average period of 0.2 years. Stock Options The Company may grant options to purchase shares of the Company’s common stock to certain employees and directors pursuant to the 2015 Incentive Compensation Plan (the “2015 Plan”). Under the 2015 Plan, all stock options are granted with an exercise price equal to or greater than the fair market value of a share of the Company’s common stock on the date of grant. Vesting is generally determined by the plan administrator under the 2015 Plan. No stock option may be exercisable more than ten years after the date it is granted. Stock Options Summary Table The following table describes the total options outstanding, granted, exercised, expired and forfeited as of and during the three months ended March 31, 2019. Shares obtained from the exercise of our options are subject to various trading restrictions. Options Pursuant to the 2015 Plan Weighted Average Exercise Price Per Share Weighted Average Fair Value of Options Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Issued and outstanding as of December 31, 2018 171,703 $ 1.89 $ 1.72 7.17 — Granted — — — — — Exercised — — — — — Forfeited — — — — — Issued and outstanding as of March 31, 2019 171,703 $ 1.89 $ 1.72 6.92 — Exercisable as of March 31, 2019 171,703 $ 1.89 $ 1.72 6.92 — For the three months ended March 31, 2019, the Company recorded no stock compensation expense related to options. For the three months ended March 31, 2018, the Company recorded stock compensation expense of $16,000 related to options.

Note 12 - Net Loss per Share

Note 12 - Net Loss per Share	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Net Loss per Share	Basic net loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock outstanding during each period. There was no dilutive effect for the outstanding potentially dilutive securities for either the three months ended March 31, 2019 or 2018, as the Company reported a net loss for both periods. The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented (in thousands, except share and per share data): For the Three Months Ended March 31, 2019 2018 (as restated) Net loss $ (4,505 ) $ (2,511 ) Weighted average common shares used in computing net loss per share, basic and diluted 15,183,402 14,957,217 Net loss per share, basic and diluted $ (0.30 ) $ (0.17 ) Diluted net loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the treasury stock method to determine whether there is a dilutive effect of outstanding potentially dilutive securities, and the if-converted method to assess the dilutive effect of the convertible notes. There was no dilutive effect for the outstanding awards for the three months ended March 31, 2019 and 2018, as the Company reported a net loss for both periods. However, if the Company had net income for the three months ended March 31, 2019, the potentially dilutive securities included in the earnings per share computation would have been 17,912,297. If the Company had net income for the three months ended March 31, 2018, the potentially dilutive securities included in the earnings per share computation would have been 17,881,141. Total outstanding potentially dilutive securities were comprised of the following: As of March 31, 2019 2018 (as restated) Stock options 171,703 171,703 Warrants 1,389,378 1,389,378 Unvested restricted stock 135,000 103,844 Convertible notes 16,216,216 16,216,216 Total common stock equivalents 17,912,297 17,881,141

Note 13 - Income Taxes

Note 13 - Income Taxes	3 Months Ended
	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income Taxes	The Company recorded a tax provision of $10,000 and $69,000 for the three months ended March 31, 2019 and 2018, respectively. Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has established a full valuation allowance as it is more likely than not that the tax benefits will not be realized as of March 31, 2019.

Note 14 - Segments, Geographica

Note 14 - Segments, Geographical Information	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
Segments, Geographical Information	The Company’s chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company currently has a single reporting segment and operating unit structure. In addition, substantially all long-lived assets are attributable to operations in the U.S. for both periods presented. Revenue, net by geography is based on the company addresses of the customers. The following table sets forth revenue, net by geographic area (in thousands): For the Three Months Ended March 31, 2019 2018 (as restated) Revenue, net: United States $ 12,987 $ 13,700 International 5,788 10,487 Total revenue, net $ 18,775 $ 24,187

Note 15 - Changes and Correctio

Note 15 - Changes and Correction of Errors in Previously Reported Consolidated Financial Statements	3 Months Ended
	Mar. 31, 2019
Accounting Changes and Error Corrections [Abstract]
Changes and Correction of Errors in Previously Reported Consolidated Financial Statements	Background on the Restatement In February 2019, the Company was made aware, as part of the year-end sales cut-off testing procedures performed during the Company’s 2018 annual audit, by its then independent auditors, Plante & Moran, PLLC, that sales transactions may have been recognized as revenue prematurely, which could have a material impact on revenue recognition for the year ended December 31, 2018. Upon such notification, the Company reviewed its revenue recognition reporting system, practices and underlying documents supporting the appropriateness of revenue under the Company’s previously established accounting policies for each quarterly period in the year ended December 31, 2018. In addition to the 2018 year-end period, the Company initially concluded that a potential material misstatement in revenue recognition was isolated to the previously issued quarterly financial statements for the three and nine months ended September 30, 2018. Audit Committee Investigation In March 2019, following management’s presentation of their initial assessment of the revenue recognition issue, the Audit Committee of the Board of Directors engaged independent legal counsel and a forensic accountant to conduct an investigation and to work with the Company to determine the potential impact on accounting for revenues. The investigation included the review of the Company’s initial assessment, interviews with key personnel, correspondence and document review, among other procedures. In April 2019, as a result of the findings of the Audit Committee’s investigation to date, the Company determined that certain of its employees had engaged in deliberate inappropriate conduct, which resulted in revenue being intentionally recorded in periods prior to the criteria for revenue recognition under GAAP being satisfied. Further, the investigation discovered that revenue had been prematurely recorded in prior periods as well as the periods initially identified by management. The investigation revealed that certain customer orders had been invoiced, triggering revenue recognition, prior to the actual shipment leaving the Company’s control. Such orders from customers had been marked as fulfilled in the Company’s enterprise reporting platform (“ERP”), thereby triggering the generation of an invoice and the recognition of revenue, in advance of shipments from both the Company’s distribution center in Tennessee and for orders that were drop-shipped directly to key customers from certain contract manufacturers. In addition, it was discovered during the investigation that certain orders had been moved to third-party locations at the respective cut-off periods and not actually shipped to the end customer until after the cut-off period resulting in the premature issuance of invoices to customers and recognition of revenue. As a result of the Audit Committee’s investigation, certain employees were terminated, and others received written reprimands related to their conduct as it relates to their behavior. In connection with the improprieties identified during the investigation resulting in the restatement of previously reported financial statements, the Company identified control deficiencies in its internal control over financial reporting that constitute material weaknesses. Other Adjustments Resulting from Reconsidering Previously Issued Financial Statements As a result of issues identified during the Audit Committee investigation, management reconsidered the Company’s previously issued consolidated financial statements and as a result additional corrections to the Company’s previously issued consolidated financial statements for each of the quarterly reporting periods ended September 30, 2018 and for the year ended December 31, 2017 were identified. These errors, for each period presented below, were primarily due to the following: ● Improper classification of trade promotions, payable to the Company’s customers, as operating expenses instead of a reduction in revenues; ● Improper cut-off related to sales transactions recorded prior to transfer of control to customers in 2018 and risk of loss transferred to the customer in 2017; ● Corrections of estimates of the expected value of customer payments, in the form of credits, issued to customers; ● Untimely recording of the change in the estimated useful life of leasehold improvements and an asset retirement obligation related to a modification to the lease of the Company’s former headquarters, and ● Incorrect treatment of debt discounts related to the related-party convertible note. Other adjustments include, but are not limited to the following; purchase price variances, accrual for legal fees, payroll tax adjustment on restricted stock, rebate receivable and recognizing revenue on a net versus gross basis. Accumulated deficit has been adjusted to reflect changes to net loss, for each period restated. Restatement Adjustments Several restatement adjustments were made to the Company’s previously filed consolidated financial statements in order to reflect revenue recognition in the appropriate periods as discussed above. Accordingly, for the subject sales transactions, revenue and accounts receivable balances were reduced by an equivalent amount in the period that the sale was originally recorded as revenue, and revenue was increased in the subsequent period in which the criteria for revenue recognition were met. Further, for the subject sales transactions, cost of revenue was reduced, and inventory was increased, in the period that the sale was originally recorded as revenue, and cost of revenue was increased, and inventory was reduced, in the period the sale was ultimately recorded as revenue. In addition, (i) revenue and operating expenses were reduced by an equivalent amount relating to the reclassification of customer payments, which were originally recorded on a gross versus net basis; (ii) revenue was increased or decreased each period, as appropriate, relating to revised estimates of the expected value of credits issued to customers, (iii) untimely recording of the change in the estimated useful life of leasehold improvements and an asset retirement obligation related to a modification to the lease of the Company’s former headquarters and (iv) other adjustments as referred to above. March 31, 2018 Restatements (Unaudited) As of and for the three months ended March 31, 2018, the Company recorded the following restatement adjustments and charges (in thousands): Impact on consolidated statements of operations for the three months ended March 31, 2018 (in thousands) - increase (decrease): ● Revenue, net: Reversal of December 31, 2017 accrual for credits – $1,281 Sales cutoff – $545 Correction of estimate of expected value of customer credits – ($1,572) Reclassification of payments to customers – ($2,584) Recognizing revenue on a net versus gross basis– ($30) ● Cost of revenue: Sales cutoff – $776 Reversal of December 31, 2017 purchase price variance - $154 Recognizing revenue on a net versus gross basis– ($30) Accrual for rebate receivable – ($170) Reclassification of advertising expenses directly related to product sales - $107 ● Advertising and promotion: Reversal of December 31, 2017 accrual for credits - ($90) Reclassification of payments to customers – ($2,582) Sales cutoff - $3 Reclassification of advertising expenses directly related to product sales and commissions – ($178) ● Selling, general and administrative: Reversal of December 31, 2017 accrual for credits – ($72) Depreciation adjustment for facility relocation – ($56) Reclassification of payments to customers – ($2) Reclassification of advertising expenses representing commissions - $71 ● Professional fees: reversal of December 2017 legal over accrual – $148 ● Interest and other expense, net: adjusted debt discount amortization – ($233) ● Net loss – $206 Impact on consolidated balance sheets - increase (decrease): ● Accounts receivable, net of allowance for doubtful accounts: Sales cutoff – ($3,556) Correction of estimate of expected value of customer credits – ($1,573) ASC 606 modified retrospective transition – ($1,053) ● Inventory: Sales cutoff – ($2,364) ● Property and equipment, net: Depreciation adjustment for facility relocation – ($856) ● Prepaid expenses and other current assets: accrual for rebate receivable – $170 ● Accounts payable: Sales cutoff – $320 ● Accrued liabilities: Payroll tax adjustment on restricted stock – ($230) ● Convertible note with a related party, net of discount: debt discount adjustment net of amortization – $979 ● Additional paid-in capital: debt discount adjustment – ($1,212) ● Accumulated Deficit – $4,361 The unaudited restated consolidated balance sheets as of March 31, 2018 is presented below (in thousands, except per share data): March 31, 2018 As Previously Reported Restatement Adjustments Restated (Unaudited) ASSETS Current assets: Cash $ 5,114 $ — $ 5,114 Accounts receivable, net of allowance for doubtful accounts of $1,518 as of March 31, 2018 16,925 (6,182 ) 10,743 Inventory 7,738 2,364 10,102 Prepaid giveaways 111 — 111 Prepaid expenses and other current assets 895 170 1,065 Total current assets 30,783 (3,648 ) 27,135 Property and equipment, net 1,632 (856 ) 776 Intangible assets, net 1,237 — 1,237 Other assets 239 — 239 TOTAL ASSETS $ 33,891 $ (4,504 ) $ 29,387 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Obligation under secured borrowing arrangement $ 5,547 $ — $ 5,547 Line of credit 2,000 — 2,000 Accounts payable 14,897 320 15,217 Accrued liabilities 7,441 (230 ) 7,211 Accrued restructuring charges, current 560 — 560 Total current liabilities 30,445 90 30,535 Convertible note with a related party, net of discount 16,917 979 17,896 Accrued restructuring charges, long-term 110 — 110 Other long-term liabilities 1,060 — 1,060 Total liabilities 48,532 1,069 49,601 Commitments and contingencies (Note 9) Stockholders' deficit: Common stock, par value of $0.001 per share, 100,000,000 shares authorized; 15,940,288 shares issued as of March 31, 2018; 15,064,667 shares outstanding as of March 31, 2018 14 — 14 Additional paid-in capital 159,798 (1,212 ) 158,586 Treasury stock, at cost; 875,621 shares (10,039 — (10,039 Accumulated other comprehensive loss (142 — (142 Accumulated deficit (164,272 (4,361 ) (168,633 TOTAL STOCKHOLDERS’ DEFICIT (14,641 (5,573 ) (20,214 TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 33,891 $ (4,504 ) $ 29,387 The unaudited restated quarterly consolidated statements of operations for the three months ended March 31, 2018 is presented below (in thousands, except per share data): Three Months Ended March 31, 2018 As Previously Reported Restatement Adjustments Restated (Unaudited) Revenue, net $ 26,547 $ (2,360 ) $ 24,187 Cost of revenue 18,328 837 19,165 Gross profit 8,219 (3,197 ) 5,022 Operating expenses: Advertising and promotion 3,661 (2,847 ) 814 Salaries and benefits 2,154 — 2,154 Selling, general and administrative 2,546 (59 ) 2,487 Research and development 212 — 212 Professional fees 572 148 720 Total operating expenses 9,145 (2,758 ) 6,387 Loss from operations (926 ) (439 ) (1,365 ) Other (expense) income: Interest and other expense, net (1,310 ) 233 (1,077 ) Loss before provision for income taxes (2,236 ) (206 ) (2,442 ) Provision for income taxes 69 — 69 Net loss $ (2,305 ) $ (206 ) $ (2,511 ) Net loss per share, basic and diluted $ (0.16 ) $ (0.01 ) $ (0.17 ) Weighted average shares used to compute net loss per share, basic and diluted 14,615,677 341,540 14,957,217 The unaudited restated consolidated statements of cash flows for the three months ended March 31, 2018 is presented below (in thousands): Three Months Ended March 31, 2018 As Previously Reported Restatement Adjustments Restated (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,305 ) $ (206 ) $ (2,511 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 287 (56 ) 231 Bad debt expense 164 — 164 Amortization of debt discount 248 (233 ) 15 Inventory provision — 35 35 Stock-based compensation 137 — 137 Changes in operating assets and liabilities: — Accounts receivable (443 ) (434 ) (877 ) Inventory (1,255 ) 592 (663 ) Prepaid giveaways (23 — (23 ) Prepaid expenses and other current assets 100 (170 ) (70 ) Other assets (14 ) — (14 ) Accounts payable and accrued liabilities 2,917 472 3,389 Accrued restructuring charges (45 ) — (45 ) Net cash used in operating activities (232 ) — (232 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (14 ) — (14 ) Net cash used in investing activities (14 ) — (14 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on line of credit (1,000 ) — (1,000 ) Proceeds from secured borrowing arrangement, net of reserves 13,494 — 13,494 Payments on secured borrowing arrangement, net of fees (13,332 ) — (13,332 ) Repayment of capital lease obligations (34 ) — (34 ) Net cash used in financing activities (872 ) — (872 ) Effect of exchange rate changes on cash 4 — 4 NET CHANGE IN CASH (1,114 ) — (1,114 ) CASH — BEGINNING OF PERIOD 6,228 6,228 CASH — END OF PERIOD $ 5,114 $ $ 5,114 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 614 $ $ 614 Cash paid for taxes $ 68 $ $ 68 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: Property and equipment acquired in conjunction with capital leases $ — $ $ — Purchase of property and equipment included in current liabilities $ 13 $ $ 13 Interest paid through issuance of shares of common stock $ 53 $ $ 53

Note 16 - Subsequent Events

Note 16 - Subsequent Events	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	GAAP requires an entity to disclose events that occur after the balance sheet date but before financial statements are issued or are available to be issued (“subsequent events”) as well as the date through which an entity has evaluated subsequent events. There are two types of subsequent events. The first type consists of events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, (“recognized subsequent events”). The second type consists of events that provide evidence about conditions that did not exist at the date of the balance sheet but arose subsequent to that date (“non-recognized subsequent events”). Recognized Subsequent Events ThermoLife International In January 2016, ThermoLife, a supplier of nitrates to MusclePharm, filed a complaint against us in Arizona state court. ThermoLife alleged that we failed to meet minimum purchase requirements contained in the parties’ supply agreement. In March 2016, we filed counterclaims alleging that ThermoLife’s products were defective. Through orders issued in September and November 2018, the court dismissed MusclePharm’s counterclaims and found that the Company was liable to ThermoLife for failing to meet its minimum purchase requirements. The court held a bench trial on the issue of damages in October 2019, and on December 4, 2019, the court entered judgment in favor of ThermoLife and against the Company in the amount of $1.6 million, comprised of $0.9 million in damages, interest in the amount of $0.3 million and attorneys’ fees and costs in the amount of $0.4 million. The Company recorded $1.6 million in accrued expenses as of December 31, 2018. In the interim, the Company filed an appeal, which is in the process of being briefed, and has posted bonds in the total amount of $0.6 million in order to stay execution on the judgment pending appeal. Of the $0.6 million, $0.25 million (including fees) was paid by Mr. Drexler on behalf of the Company on December 31, 2019. See “Note 8. Debt” for additional information. Subsequent to December 31, 2019 the balance of $0.35 million was secured by a personal guaranty from Mr. Drexler, while the associated fees of $12,500 was paid by the Company. The Company intends to continue to vigorously pursue its defenses on appeal. Manziel Matter On July 15, 2014, JMAN2 General LP (“JMAN2”), Jonathan Manziel (“Endorser”) and MusclePharm entered into an endorsement agreement, in which the Endorser would provide certain endorsements of MusclePharm’s businesses, products and services in exchange for payments to JMAN2 by MusclePharm. On April 17, 2018, JMAN2 commenced an action against MusclePharm in the District Court, City and County of Denver, Colorado and on July 19, 2018 filed an amended complaint against MusclePharm, in which JMAN2 asserted various claims against MusclePharm concerning their rights and obligations under the Endorsement Agreement. On April 10, 2019, a settlement agreement was reached for an amount of $0.1 million, which had been recorded as an accrued expense as of December 31, 2018. Of this amount, $70,000 was paid in 2019, while the balance was paid in the first quarter of 2020. Durnford Matter On July 28, 2015, Plaintiff, Tucker Durnford, filed a First Amended Class Action Complaint which alleged that the Company’s (now discontinued) Arnold Iron Mass product violates consumer protection laws by misleading consumers about the amount and sources of protein in the product. On February 10, 2016, the court granted our motion to dismiss the complaint on federal preemption grounds. On October 12, 2018, the Ninth Circuit reversed the dismissal. On October 8, 2019, the parties successfully mediated the case to a settlement of $0.15 million, which had been recorded as an accrued expense as of December 31, 2018. Of the settlement amount, $0.1 million was paid during the fourth quarter of 2019 and the balance was paid during the first quarter of 2020. Unrecognized Subsequent Events CARES Act On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Among the changes to the U.S. federal income tax, the CARES Act restored net operating loss carryback rules that were eliminated by 2017 Tax Cuts and Jobs Act, modified the limit on the deduction for net interest expense and accelerated the timeframe for refunds of AMT credits. Based on an analysis of the impact of the CARES Act, the Company has not identified any overall material effect on the 2018 and 2019 tax liabilities. HSBF Note Due to economic uncertainty as a result of the ongoing pandemic (COVID-19), on May 14, 2020, the Company received an aggregate principal amount of $964,910 pursuant to the borrowing arrangement (“Note”) with Harvest Small Business Finance, LLC (“HSBF”) and agreed to pay the principal amount plus interest at a 1% fixed interest rate per year, on the unpaid principal balance. No payments are due on the Note until November 16, 2020 (the “Deferment Period”). However, interest will continue to accrue during the Deferment Period. The Note will mature on May 16, 2022. The Note includes forgiveness provisions in accordance with the requirements of the Paycheck Protection Program, Section 1106 of the CARES Act. The Company has not determined the amount of forgiveness in connection with the loan, partly due to the ongoing routine changes in the method of calculating the amount. Related-Party Refinanced Convertible Note On July 1, 2020, the Company entered into the refinancing with Mr. Ryan Drexler, the Company’s Chairman of the Board of Directors, Chief Executive Officer and President (the “Refinancing”). As part of the Refinancing, the Company issued to Mr. Drexler an amended and restated convertible secured promissory note (the “Refinanced Convertible Note”) in the original principal amount of $2,735,199, which amended and restated (i) a convertible secured promissory note dated as of November 8, 2017, $1,134,483 of which was outstanding as of July 1, 2020 (ii) a collateral receipt and security agreement with Mr. Drexler dated as of December 27, 2019, $252,500 of which was outstanding as of July 1, 2020, and (iii) a secured revolving promissory note dated as of October 4, 2019, $1,348,216 of which was outstanding as of July 1, 2020. The $2.7 million Refinanced Convertible Note bears interest at the rate of 12% per annum. Unless earlier converted or repaid, all outstanding principal and any accrued but unpaid interest under the Refinanced Convertible Note shall be due and payable on November 30, 2020. Any interest not paid when due shall be capitalized and added to the principal amount of the Refinanced Convertible Note and bear interest on the applicable interest payment date along with all other unpaid principal, capitalized interest, and other capitalized obligations. Mr. Drexler may convert the outstanding principal and accrued interest into shares of the Company’s common stock at a conversion price equal to or greater than (i) the closing price per share of the common stock on the last business day immediately preceding November 30, 2020 or (ii) $0.17. The Company may prepay the Refinanced Convertible Note by giving Mr. Drexler between 15 and 60 days’ notice depending upon the specific circumstances, subject to Mr. Drexler’s conversion right. The Refinanced Convertible Note also contains customary restrictions on the ability of the Company to, among other things, grant liens or incur indebtedness other than certain obligations incurred in the ordinary course of business. The restrictions are also subject to certain additional qualifications and carveouts, as set forth in the Refinanced Convertible Note. The Refinanced Convertible Note is subordinated to certain other indebtedness of the Company. There are no other events subsequent to March 31, 2019 that have not been described in the accompanying footnotes.

Note 2 - Summary of Significa_2

Note 2 - Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	The accompanying Consolidated Financial Statements have been prepared using the accrual method of accounting in accordance with generally accepted accounting principles in the United States (“GAAP”) and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Consolidated Financial Statements include the accounts of MusclePharm Corporation and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Unaudited Interim Financial Information	The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with GAAP and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. The Company’s management believes the unaudited interim Consolidated Financial Statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position as of March 31, 2019, results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three months ended March 31, 2019 and 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ended December 31, 2019. These unaudited interim Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on August 24, 2020.
Use of Estimates	The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Such estimates include, but are not limited to, allowance for doubtful accounts, revenue discounts and allowances, the valuation of inventory and deferred tax assets, the assessment of useful lives, recoverability and valuation of long-lived assets, likelihood and range of possible losses on contingencies, restructuring liabilities, valuations of equity securities and intangible assets, fair value of derivatives, warrants and options, present value of lease liabilities, among others. Actual results could differ from those estimates.
Revenue Recognition	The Company adopted ASC 606, “ Revenue from Contracts with Customers, a. Nature of Goods and Services The Company sells a variety of protein products through a broad distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, specialty stores and websites and other e-commerce channels, all of which sell our products to consumers. b. When Performance Obligations are Satisfied For performance obligations related to the shipping and invoicing of products, control transfers at the point in time upon which finished goods are delivered to the Company’s customers or when finished goods are picked up by a customer or a customer’s carrier, depending on shipping terms. Once a product has been delivered or picked up by the customer, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. The Company considers control to have transferred upon delivery or customer receipt because the Company has an enforceable right to payment at that time, the customer has legal title to the asset, the Company has transferred physical possession of the asset, and the customer has significant risk and rewards of ownership of the asset. c. Variable Consideration The Company conducts extensive promotional activities, primarily through the use of off-list discounts, slotting, coupons, cooperative advertising, periodic price reduction arrangements, and end-aisle and other in-store displays. The costs of such activities are netted against sales and are recorded when the related sale takes place. The reserves for sales returns and consumer and trade promotion liabilities are established based on the Company’s best estimate of the amounts necessary to settle future and existing obligations for products sold as of the balance sheet date. d. Practical Expedients The Company expenses incremental direct costs of obtaining a contract (broker commissions) when the related sale takes place, since the amortization period of the commissions paid for the sale of products is less than a year. These costs are recorded in “Selling, general and administrative” expenses in the accompanying consolidated statements of operations. The Company accounts for shipping and handling costs as fulfillment activities which are therefore recognized upon shipment of the goods. Shipping and handling costs related to inbound purchases of raw material and finished goods are included in cost of revenues in our consolidated statements of operations. For the three months ended March 31, 2019 and 2018, the Company incurred $0.3 million and $0.4 million, respectively, of inbound shipping and handling costs. Shipping and handling costs related to shipments to our customers is included in “Selling, general and administrative” expense in our consolidated statements of operations. For both the three months ended March 31, 2019 and 2018, the Company incurred $1.0 million, of shipping and handling costs related to shipments to our customers. The Company excludes from its revenue any amounts collected from customers for sales (and similar) taxes. During the three months ended March 31, 2019 and 2018, the Company recorded discounts, and to a lesser degree, sales returns, totaling $7.6 million and $7.9 million, respectively, which accounted for 29% and 25% of gross revenue in each period, respectively. The Company adopted ASC 606 using the modified retrospective method and the cumulative effect of this change in accounting method for the expected value of customer credits related to certain contracts in place, as defined by ASC 606, is presented below: Balance at December 31, 2017 Adjustment Balance at January 1, 2018 Accounts receivable, net $ 11,105 $ (1,053 ) $ 10,052 Accumulated deficit $ (165,069 ) $ (1,053 ) $ (166,122 )
Concentrations	Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company minimizes its credit risk associated with cash by periodically evaluating the credit quality of its primary financial institution. The cash balance at times may exceed federally insured limits. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date. Significant customers are those that represent more than 10% of the Company’s net revenue or accounts receivable for each period presented. For each significant customer, percentage of net revenue and accounts receivable are as follows: Percentage of Net Revenue for the Three Months Ended March 31, Percentage of Net Accounts Receivable as of 2019 2018 (as restated) March 31, 2019 December 31, 2018 Customers Costco 26 % 38 % 10 % 16 % Amazon 12 % * 19 % 22 % iHerb 14 % * * * * Represents less than 10% of net revenue or net accounts receivable. The Company uses a limited number of non-affiliated suppliers for contract manufacturing of its products. The Company had the following concentration of purchases with contract manufacturers: For the three months Ended March 31, Vendor 2019 2018 (as restated) Nutra Blend 20 % 25 % S.K. Laboratories 40 % 22 % 4Excelsior * 18 % Bakery Barn * 14 % Prinova 10 % 17 % * Represents less than 10% of purchases.
Share-Based Payments and Stock-Based Compensation	Share-based compensation awards, including stock options and restricted stock awards, are recorded at estimated fair value on the applicable awards’ grant date, based on the estimated number of awards that are expected to vest. The grant date fair value is amortized on a straight-line basis over the time in which the awards are expected to vest, or immediately if no vesting is required. Share-based compensation awards issued to non-employees for services are recorded at fair value on the grant date. The fair value of restricted stock awards is based on the fair value of the stock underlying the awards on the grant date as there is no exercise price. The fair value of stock options is estimated using the Black-Scholes option-pricing model. The determination of the fair value of each stock award using this option-pricing model is affected by the Company’s assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards and the expected term of the awards based on an analysis of the actual and projected employee stock option exercise behaviors and the contractual term of the awards. Due to the Company’s limited experience with the expected term of options, the simplified method was utilized in determining the expected option term as prescribed in Staff Accounting Bulletin No. 110. The Company recognizes stock-based compensation expense over the requisite service period, which is generally consistent with the vesting of the awards, based on the estimated fair value of all stock-based payments issued to employees and directors that are expected to vest.
Recent Accounting Pronouncements	In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases Leases (842), Targeted Improvements The Company adopted the ASUs, as of January 1, 2019, using the modified retrospective transition method prescribed by ASU 2018-11. Under this transition method, financial results reported in periods prior to the first quarter of 2019 are unchanged. As a result of the adoption of the ASUs, the Company recorded a right-of-use (“ROU”) asset and liability of $2.1 million. Also as a result of the adoption, the Company reclassified $0.2 million of liabilities on its consolidated balance sheets as of January 1, 2019 against the operating lease ROU asset. The adoption of these ASUs did not result in a cumulative-effect adjustment to the opening balance of accumulated deficit. In addition, the Company elected the package of practical expedients permitted by the transition guidance. The adoption of these ASU’s did not have an impact on the Company’s consolidated statements of operations or cash flows. In July 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments On September 20, 2018, FASB issued Accounting Standards Update No. 2018-07, “Compensation - Stock Compensation” (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments issued to non-employees. This ASU expands the scope of ASC Topic 718, “Compensation - Stock Compensation”, which currently only includes share-based payments issued to employees, to also include share-based payments issued to non-employees for goods and services. Consequently, the accounting for share-based payments to non-employees and employees will be substantially aligned. ASU 2018-07 supersedes ASC Subtopic 505-50, “Equity - Equity-Based Payments to Non-Employees”. The amendments in this ASU are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The new standard has been adopted by the Company. The Company has evaluated the impact of ASU 2018-07 on its consolidated financial statements and it did not have a material impact. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Note 2 - Summary of Significa_3

Note 2 - Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Adoption of accounting standard	Balance at December 31, 2017 Adjustment Balance at January 1, 2018 Accounts receivable, net $ 11,105 $ (1,053 ) $ 10,052 Accumulated deficit $ (165,069 ) $ (1,053 ) $ (166,122 )
Significant customers	Percentage of Net Revenue for the Three Months Ended March 31, Percentage of Net Accounts Receivable as of 2019 2018 (as restated) March 31, 2019 December 31, 2018 Customers Costco 26 % 38 % 10 % 16 % Amazon 12 % * 19 % 22 % iHerb 14 % * * * * Represents less than 10% of net revenue or net accounts receivable. The Company had the following concentration of purchases with contract manufacturers: For the three months Ended March 31, Vendor 2019 2018 (as restated) Nutra Blend 20 % 25 % S.K. Laboratories 40 % 22 % 4Excelsior * 18 % Bakery Barn * 14 % Prinova 10 % 17 % * Represents less than 10% of purchases.

Note 5 - Balance Sheet Compon_2

Note 5 - Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Property and equipment	As of March 31, 2019 As of December 31, 2018 Furniture, fixtures, and equipment $ 2,585 $ 3,511 Leasehold improvements 236 236 Vehicles 39 39 Displays 453 453 Website 497 497 Property and equipment, gross 3,810 4,736 Less: accumulated depreciation and amortization (3,377 ) (4,223 ) Property and equipment, net $ 433 $ 513
Intangible assets	As of March 31, 2019 Gross Value Accumulated Amortization Net Carrying Value Remaining Weighted-Average Useful Lives (years) Amortized Intangible Assets Brand (apparel rights) $ 2,244 $ (1,327 ) $ 917 2.9 Total intangible assets $ 2,244 $ (1,327 ) $ 917 As of December 31, 2018 Gross Value Accumulated Amortization Net Carrying Value Remaining Weighted-Average Useful Lives (years) Amortized Intangible Assets Brand (apparel rights) $ 2,244 $ (1,247 ) $ 997 3.1 Total intangible assets $ 2,244 $ (1,247 ) $ 997
Estimated future amortization expense of intangible assets	For the Year Ending December 31, Remainder of 2019 $ 240 2020 320 2021 320 2022 37 Total amortization expense $ 917

Note 6 - Leases (Tables)

Note 6 - Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Supplemental balance sheet information related to leases	Balance Sheet Classification March 31, 2019 Assets Operating ROU assets, net $ 1,742 Finance Property and equipment, net 148 Total Assets 1,890 Liabilities Current liabilities: Operating Operating lease liability - current $ 765 Finance Current accrued liability 122 Total current liabilities 887 Non-current liabilities: Operating Operating lease liability - long term 1,150 Finance Other long term liabilities 26 Total non-current liabilities 1,176 Total lease liabilities $ 2,063
Lease cost	Income Statement Classification Three months ended March 31, 2019 Operating lease cost Selling, general and administrative $ 249 Finance lease cost: Amortization of ROU asset Selling, general and administrative 27 Interest on lease liabilities Selling, general and administrative 2 Total finance lease cost 29 Variable lease payments Selling, general and administrative 64 Sublease income Other income (99 ) Total lease cost $ 243
Supplemental cash flow information related to leases	Three months ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities (in thousands): Operating cash flows from operating leases 202 Operating cash flows from finance leases 2 Financing cash flows from finance leases 26 The weighted average remaining lease term was as follows: Operating leases (in years) 2.7 Finance leases (in years) 1.2 The weighted average discount rate was as follows: Operating leases 18 % Finance leases 5 %
Maturities of lease liabilities	Operating Finance Remaining nine months of the year ending 2019 $ 793 $ 98 2020 808 55 2021 481 — 2022 369 — Thereafter — — Total future undiscounted lease payments 2,451 153 Less amounts representing interest (536 ) (5 ) Present value of lease liabilities $ 1,915 $ 148

Note 7 - Interest and Other E_2

Note 7 - Interest and Other Expense, Net (Tables)	3 Months Ended
	Mar. 31, 2019
Other Income and Expenses [Abstract]
Interest and other expense, net	For the Three Months Ended March 31, 2019 2018 (as restated) Interest expense, related party $ (532 ) $ (541 ) Interest expense, related party debt discount (15 ) (15 ) Interest expense, other (293 ) (67 ) Interest expense, secured borrowing arrangement (225 ) (346 ) Foreign currency transaction loss (200 ) (113 ) Other 100 5 Total interest and other expense, net $ (1,165 ) $ (1,077 )

Note 8 - Debt (Tables)

Note 8 - Debt (Tables)	3 Months Ended
	Mar. 31, 2019
Debt Disclosure [Abstract]
Debt	As of March 31, 2019 As of December 31,2018 Refinanced convertible note, related party $ 18,000 $ 18,000 Obligations under secured borrowing arrangement 3,443 1,285 Line of credit – inventory financing 2,500 1,500 Unamortized debt discount, related party (45 ) (60 ) Total debt 23,898 20,725 Less: current portion (23,898 ) (20,725 ) Long term debt $ — $ —

Note 10 - Stockholders' Defic_2

Note 10 - Stockholders' Deficit (Tables)	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Stock issued	For the three months ended March 31, 2019, the Company had the following transactions related to its common stock including restricted stock awards (in thousands, except share and per share data): Transaction Type Quantity (Shares) Valuation Range of Value per Share Stock issued for advertising services 336,113 $ 303 $ 0.90 Total 336,113 $ 303 $ 0.90 For the three months ended March 31, 2018, the Company had the following transactions related to its common stock including restricted stock awards (in thousands, except share and per share data): Transaction Type Quantity (Shares) Valuation Range of Value per Share Stock issued to related party for interest 81,113 $ 53 $ 0.65 Total 81,113 $ 53 $ 0.65

Note 11 - Stock-Based Compens_2

Note 11 - Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Share-based Payment Arrangement [Abstract]
Restricted stock unit activity	Unvested Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value Unvested balance – December 31, 2018 197,500 $ 1.05 Granted — — Vested (62,500 ) 1.00 Unvested balance – March 31, 2019 135,000 1.07
Stock option activity	Options Pursuant to the 2015 Plan Weighted Average Exercise Price Per Share Weighted Average Fair Value of Options Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Issued and outstanding as of December 31, 2018 171,703 $ 1.89 $ 1.72 7.17 — Granted — — — — — Exercised — — — — — Forfeited — — — — — Issued and outstanding as of March 31, 2019 171,703 $ 1.89 $ 1.72 6.92 — Exercisable as of March 31, 2019 171,703 $ 1.89 $ 1.72 6.92 —

Note 12 - Net Loss per Share (T

Note 12 - Net Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Basic and diluted net loss per share	For the Three Months Ended March 31, 2019 2018 (as restated) Net loss $ (4,505 ) $ (2,511 ) Weighted average common shares used in computing net loss per share, basic and diluted 15,183,402 14,957,217 Net loss per share, basic and diluted $ (0.30 ) $ (0.17 )
Antidilutive securities excluded from computation of diluted earnings per share	As of March 31, 2019 2018 (as restated) Stock options 171,703 171,703 Warrants 1,389,378 1,389,378 Unvested restricted stock 135,000 103,844 Convertible notes 16,216,216 16,216,216 Total common stock equivalents 17,912,297 17,881,141

Note 14 - Segments, Geographi_2

Note 14 - Segments, Geographical Information (Tables)	3 Months Ended
	Mar. 31, 2019
Segment Reporting [Abstract]
Revenue, net by geographic area	For the Three Months Ended March 31, 2019 2018 (as restated) Revenue, net: United States $ 12,987 $ 13,700 International 5,788 10,487 Total revenue, net $ 18,775 $ 24,187

Note 15 - Changes and Correct_2

Note 15 - Changes and Correction of Errors in Previously Reported Consolidated Financial Statements (Tables)	3 Months Ended
	Mar. 31, 2019
Accounting Changes and Error Corrections [Abstract]
Error corrections and prior period adjustments	The unaudited restated consolidated balance sheets as of March 31, 2018 is presented below (in thousands, except per share data): March 31, 2018 As Previously Reported Restatement Adjustments Restated (Unaudited) ASSETS Current assets: Cash $ 5,114 $ — $ 5,114 Accounts receivable, net of allowance for doubtful accounts of $1,518 as of March 31, 2018 16,925 (6,182 ) 10,743 Inventory 7,738 2,364 10,102 Prepaid giveaways 111 — 111 Prepaid expenses and other current assets 895 170 1,065 Total current assets 30,783 (3,648 ) 27,135 Property and equipment, net 1,632 (856 ) 776 Intangible assets, net 1,237 — 1,237 Other assets 239 — 239 TOTAL ASSETS $ 33,891 $ (4,504 ) $ 29,387 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Obligation under secured borrowing arrangement $ 5,547 $ — $ 5,547 Line of credit 2,000 — 2,000 Accounts payable 14,897 320 15,217 Accrued liabilities 7,441 (230 ) 7,211 Accrued restructuring charges, current 560 — 560 Total current liabilities 30,445 90 30,535 Convertible note with a related party, net of discount 16,917 979 17,896 Accrued restructuring charges, long-term 110 — 110 Other long-term liabilities 1,060 — 1,060 Total liabilities 48,532 1,069 49,601 Commitments and contingencies (Note 9) Stockholders' deficit: Common stock, par value of $0.001 per share, 100,000,000 shares authorized; 15,940,288 shares issued as of March 31, 2018; 15,064,667 shares outstanding as of March 31, 2018 14 — 14 Additional paid-in capital 159,798 (1,212 ) 158,586 Treasury stock, at cost; 875,621 shares (10,039 — (10,039 Accumulated other comprehensive loss (142 — (142 Accumulated deficit (164,272 (4,361 ) (168,633 TOTAL STOCKHOLDERS’ DEFICIT (14,641 (5,573 ) (20,214 TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 33,891 $ (4,504 ) $ 29,387 The unaudited restated quarterly consolidated statements of operations for the three months ended March 31, 2018 is presented below (in thousands, except per share data): Three Months Ended March 31, 2018 As Previously Reported Restatement Adjustments Restated (Unaudited) Revenue, net $ 26,547 $ (2,360 ) $ 24,187 Cost of revenue 18,328 837 19,165 Gross profit 8,219 (3,197 ) 5,022 Operating expenses: Advertising and promotion 3,661 (2,847 ) 814 Salaries and benefits 2,154 — 2,154 Selling, general and administrative 2,546 (59 ) 2,487 Research and development 212 — 212 Professional fees 572 148 720 Total operating expenses 9,145 (2,758 ) 6,387 Loss from operations (926 ) (439 ) (1,365 ) Other (expense) income: Interest and other expense, net (1,310 ) 233 (1,077 ) Loss before provision for income taxes (2,236 ) (206 ) (2,442 ) Provision for income taxes 69 — 69 Net loss $ (2,305 ) $ (206 ) $ (2,511 ) Net loss per share, basic and diluted $ (0.16 ) $ (0.01 ) $ (0.17 ) Weighted average shares used to compute net loss per share, basic and diluted 14,615,677 341,540 14,957,217 The unaudited restated consolidated statements of cash flows for the three months ended March 31, 2018 is presented below (in thousands): Three Months Ended March 31, 2018 As Previously Reported Restatement Adjustments Restated (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,305 ) $ (206 ) $ (2,511 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 287 (56 ) 231 Bad debt expense 164 — 164 Amortization of debt discount 248 (233 ) 15 Inventory provision — 35 35 Stock-based compensation 137 — 137 Changes in operating assets and liabilities: — Accounts receivable (443 ) (434 ) (877 ) Inventory (1,255 ) 592 (663 ) Prepaid giveaways (23 — (23 ) Prepaid expenses and other current assets 100 (170 ) (70 ) Other assets (14 ) — (14 ) Accounts payable and accrued liabilities 2,917 472 3,389 Accrued restructuring charges (45 ) — (45 ) Net cash used in operating activities (232 ) — (232 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (14 ) — (14 ) Net cash used in investing activities (14 ) — (14 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on line of credit (1,000 ) — (1,000 ) Proceeds from secured borrowing arrangement, net of reserves 13,494 — 13,494 Payments on secured borrowing arrangement, net of fees (13,332 ) — (13,332 ) Repayment of capital lease obligations (34 ) — (34 ) Net cash used in financing activities (872 ) — (872 ) Effect of exchange rate changes on cash 4 — 4 NET CHANGE IN CASH (1,114 ) — (1,114 ) CASH — BEGINNING OF PERIOD 6,228 6,228 CASH — END OF PERIOD $ 5,114 $ $ 5,114 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest $ 614 $ $ 614 Cash paid for taxes $ 68 $ $ 68 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: Property and equipment acquired in conjunction with capital leases $ — $ $ — Purchase of property and equipment included in current liabilities $ 13 $ $ 13 Interest paid through issuance of shares of common stock $ 53 $ $ 53

Note 1 - Description of Busin_2

Note 1 - Description of Business (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash	$ 613	$ 2,317	$ 5,114	$ 6,228
Working capital deficit	(34,400)
Stockholders' deficit	(32,360)	(28,195)	(20,214)	$ (16,848)
Accumulated deficit	$ (181,436)	$ (176,877)	$ (168,633)

Note 2 - Summary of Significa_4

Note 2 - Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Accounts receivable, net	$ 5,548	$ 6,273	$ 10,743	$ 10,052
Accumulated deficit				(166,122)
As Previously Reported
Accounts receivable, net			16,925	11,105
Accumulated deficit				(165,069)
Restatement Adjustments
Accounts receivable, net			$ (6,182)	(1,053)
Accumulated deficit				$ (1,053)

Note 2 - Summary of Significa_5

Note 2 - Summary of Significant Accounting Policies (Details 1) - Customer Concentration Risk		3 Months Ended				12 Months Ended
		Mar. 31, 2019		Mar. 31, 2018		Dec. 31, 2018
Sales Revenue, Net | Costco
Concentration risk, percentage		26.00%		38.00%
Sales Revenue, Net | Amazon
Concentration risk, percentage		12.00%			[1]
Sales Revenue, Net | iHerb
Concentration risk, percentage		14.00%			[1]
Accounts Receivable | Costco
Concentration risk, percentage		10.00%				16.00%
Accounts Receivable | Amazon
Concentration risk, percentage		19.00%				22.00%
Accounts Receivable | iHerb
Concentration risk, percentage	[1]
Purchases | Nutra Blend
Concentration risk, percentage		20.00%		25.00%
Purchases | S.K. Laboratories
Concentration risk, percentage		40.00%		22.00%
Purchases | 4 Excelsior
Concentration risk, percentage			[2]	18.00%
Purchases | Bakery Barn
Concentration risk, percentage			[2]	14.00%
Purchases | Prinova
Concentration risk, percentage		10.00%		17.00%
[1]	Represents less than 10% of net revenue or net accounts receivable.
[2]	Represents less than 10% of purchases.

Note 2 - Summary of Significa_6

Note 2 - Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accounting Policies [Abstract]
Shipping and handling costs	$ 1,000	$ 1,000
Sales returns and discounts	$ 7,600	$ 7,900
Sales returns and discounts as a percentage of sales	29.00%	25.00%

Note 4 - Restructuring (Details

Note 4 - Restructuring (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Cash payments	$ 200
Contract Termination Costs
Provision of restructuring and accrued restructuring charges		$ 400
Abandoned Leased Facilities
Provision of restructuring and accrued restructuring charges		$ 100

Note 5 - Balance Sheet Compon_3

Note 5 - Balance Sheet Components (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Property and equipment, gross	$ 3,810	$ 4,736
Less: accumulated depreciation and amortization	(3,377)	(4,223)
Property and equipment, net	433	513	$ 776
Furniture, Fixtures and Equipment
Property and equipment, gross	2,585	3,511
Leasehold Improvements
Property and equipment, gross	236	236
Vehicles
Property and equipment, gross	39	39
Displays
Property and equipment, gross	453	453
Website
Property and equipment, gross	$ 497	$ 497

Note 5 - Balance Sheet Compon_4

Note 5 - Balance Sheet Components (Details 1) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Finite-lived intangible assets, gross	$ 2,244	$ 2,244
Finite-lived intangible assets, accumulated amortization	(1,327)	(1,247)
Finite-lived intangible assets, net	917	997	$ 1,237
Brand (Apparel Rights)
Finite-lived intangible assets, gross	2,244	2,244
Finite-lived intangible assets, accumulated amortization	(1,327)	(1,247)
Finite-lived intangible assets, net	$ 917	$ 997
Finite-lived intangible assets, remaining weighted-average useful life	2 years 10 months 24 days	3 years 1 month 6 days

Note 5 - Balance Sheet Compon_5

Note 5 - Balance Sheet Components (Details 2) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Remainder of 2019	$ 240
2020	320
2021	320
2022	37
Total amortization expense	$ 917	$ 997	$ 1,237

Note 5 - Balance Sheet Compon_6

Note 5 - Balance Sheet Components (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Depreciation and amortization expense	$ 116	$ 151
Amortization of intangible assets	$ 80	$ 80

Note 6 - Leases (Details)

Note 6 - Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating, ROU assets, net	$ 1,742	$ 0
Finance, property and equipment, net	148
Total assets	1,890
Operating, operating lease liability - current	765	0
Finance, current accrued liability	122
Total current liabilities	887
Operating, operating lease liability - long term	1,150	$ 0
Finance, other long term liabilities	26
Total non-current liabilities	1,176
Total lease liabilities	$ 2,063

Note 6 - Leases (Details 1)

Note 6 - Leases (Details 1) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Leases [Abstract]
Operating lease cost, selling, general and administrative	$ 249
Finance lease cost, amortization of ROU asset, selling, general and administrative	27
Finance lease cost, interest on lease liabilities, selling, general and administrative	2
Total finance lease cost	29
Variable lease payments, selling, general and administrative	64
Sublease income, other income	(99)
Total lease cost	$ 243

Note 6 - Leases (Details 2)

Note 6 - Leases (Details 2) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Leases [Abstract]
Operating cash flows from operating lease	$ 202
Operating cash flows from finance leases	2
Financing cash flows from finance leases	$ 26
Weighted average remaining lease term, operating leases	2 years 8 months 12 days
Weighted average remaining lease term, finance leases	1 year 2 months 12 days
Weighted average discount rate, operating leases	18.00%
Weighted average discount rate, finance leases	5.00%

Note 6 - Leases (Details 3)

Note 6 - Leases (Details 3) $ in Thousands	Mar. 31, 2019USD ($)
Operating
Remaining nine months of the year ending 2019	$ 793
2020	808
2021	481
2022	369
Thereafter	0
Total future undiscounted lease payments	2,451
Less amounts representing interest	(536)
Present value of lease liabilities	1,915
Finance
Remaining nine months of the year ending 2019	98
2020	55
2021	0
2022	0
Thereafter	0
Total future undiscounted lease payments	153
Less amounts representing interest	(5)
Present value of lease liabilities	$ 148

Note 7 - Interest and Other E_3

Note 7 - Interest and Other Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Other Income Expense Net [Abstract]
Interest expense, related party	$ (532)	$ (541)
Interest expense, related party debt discount	(15)	(15)
Interest expense, other	(293)	(67)
Interest expense, secured borrowing arrangement	(225)	(346)
Foreign currency transaction loss	(200)	(113)
Other	100	5
Total interest and other expense, net	$ (1,165)	$ (1,077)

Note 8 - Debt (Details)

Note 8 - Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Debt Disclosure [Abstract]
Refinanced convertible note, related party	$ 18,000	$ 18,000
Obligations under secured borrowing arrangement	3,443	1,285	$ 5,547
Line of credit - inventory financing	2,500	1,500	$ 2,000
Unamortized debt discount, related party	(45)	(60)
Total debt	23,898	20,725
Less: current portion	(23,898)	(20,725)
Long term debt	$ 0	$ 0

Note 8 - Debt (Details Narrativ

Note 8 - Debt (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Debt Disclosure [Abstract]
Interest expense, related party	$ 532	$ 541
Interest paid to related party	400	300
Line of credit - inventory financing	2,500	2,000	$ 1,500
Obligations under secured borrowing arrangement	3,443	5,547	$ 1,285
Cash received on account of sale of accounts	8,500	13,500
Repayments of account receivable sale	$ 6,300	$ 13,300

Note 10 - Stockholders' Defic_3

Note 10 - Stockholders' Deficit (Details) - Common Stock - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock issued for advertising services, quantity	336,113
Stock issued for advertising services, valuation	303
Stock issued for advertising services, range of value per share	$ .90
Stock issued to related party for interest, quantity		81,113
Stock issued to related party for interest, valuation		$ 53
Stock issued to related party for interest, range of value per share		$ .65
Total, quantity	336,113	81,113
Total, valuation	$ 303	$ 53
Total, range of value per share	$ 0.90	$ 0.65

Note 10 - Stockholders' Defic_4

Note 10 - Stockholders' Deficit (Details Narrative) - shares	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Equity [Abstract]
Warrants outstanding	1,389,378		1,389,378
Treasury stock	875,621	875,621	875,621

Note 11 - Stock-Based Compens_3

Note 11 - Stock-Based Compensation (Details)	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Share-based Payment Arrangement [Abstract]
Number of shares, unvested, beginning | shares	197,500
Number of shares, granted | shares	0
Number of shares, vested | shares	(62,500)
Number of shares, unvested, ending | shares	135,000
Weighted-average grant date fair value, unvested, beginning | $ / shares	$ 1.05
Weighted-average grant date fair value, granted | $ / shares	.00
Weighted-average grant date fair value, vested | $ / shares	1
Weighted-average grant date fair value, unvested, ending | $ / shares	$ 1.07

Note 11 - Stock-Based Compens_4

Note 11 - Stock-Based Compensation (Details 1) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Share-based Payment Arrangement [Abstract]
Options issued and outstanding, beginning | shares	1.72
Options granted | shares	0
Options exercised | shares	0
Options forfeited | shares	0
Options issued and outstanding, ending | shares	171,703
Options exercisable | shares	171,703
Weighted average option price per share, issued and outstanding, beginning	$ 1.89
Weighted average option price per share, granted	.00
Weighted average option price per share, exercised	.00
Weighted average option price per share, forfeited	.00
Weighted average option price per share, issued and outstanding, ending	1.89
Weighted average option price per share, exercisable	1.89
Weighted average fair value of options granted, issued and outstanding, beginning	1.72
Weighted average fair value of options granted, granted	.00
Weighted average fair value of options granted, exercised	.00
Weighted average fair value of options granted, forfeited	.00
Weighted average fair value of options granted, issued and outstanding, ending	1.72
Weighted average fair value of options granted, exercisable	$ 1.72
Weighted average remaining contractual life, years, issued and outstanding	6 years 11 months 1 day
Weighted average remaining contractual life, years, exercisable	6 years 11 months 1 day
Aggregate intrinsic value, issued and outstanding | $	$ 0
Aggregate intrinsic value, exercisable | $	$ 0

Note 11 - Stock-Based Compens_5

Note 11 - Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Payment Arrangement [Abstract]
Unrecognized expense for unvested restricted stock awards	$ 63
Unrecognized expense for unvested restricted stock awards period of recognition	2 months 12 days
Stock compensation expense related to options	$ 0	$ 16

Note 12 - Net Loss per Share (D

Note 12 - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net loss	$ (4,505)	$ (2,511)
Weighted average common shares used in computing net loss per share, basic and diluted	15,183,402	14,957,217
Net loss per share, basic and diluted	$ (0.30)	$ (0.17)

Note 13 - Income Taxes (Details

Note 13 - Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 10	$ 69

Note 14 - Segments, Geographi_3

Note 14 - Segments, Geographical Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue, net	$ 18,775	$ 24,187
United States
Revenue, net	12,987	13,700
International
Revenue, net	$ 5,788	$ 10,487

Note 15 - Changes and Correct_3

Note 15 - Changes and Correction of Errors in Previously Reported Consolidated Financial Statements (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash	$ 613	$ 2,317	$ 5,114	$ 6,228
Accounts receivable, net	5,548	6,273	10,743	10,052
Inventory	9,819	13,661	10,102
Prepaid giveaways			111
Prepaid expenses and other current assets	827	576	1,065
Total current assets	16,807	22,827	27,135
Property and equipment, net	433	513	776
Intangible assets, net	917	997	1,237
Other assets	274	264	239
Total assets	20,173	24,601	29,387
Current liabilities:
Obligation under secured borrowing arrangement	3,443	1,285	5,547
Line of credit	2,500	1,500	2,000
Accounts payable	19,932	24,797	15,217
Accrued liabilities	6,600	6,543	7,211
Accrued restructuring charges, current	0	493	560
Total current liabilities	51,195	52,558	30,535
Convertible note with a related party, net of discount			17,896
Accrued restructuring charges, long-term	0	30	110
Other long-term liabilities	188	208	1,060
Total liabilities	52,533	52,796	49,601
Commitments and contingencies (Note 9)
Stockholders' deficit:
Common stock	15	15	14
Additional paid-in capital	159,105	158,944	158,586
Treasury stock, at cost	(10,039)	(10,039)	(10,039)
Accumulated other comprehensive loss	(5)	(238)	(142)
Accumulated deficit	(181,436)	(176,877)	(168,633)
Total stockholders' deficit	(32,360)	(28,195)	(20,214)	(16,848)
Total liabilities and stockholders' deficit	$ 20,173	$ 24,601	29,387
As Previously Reported
Current assets:
Cash			5,114	6,228
Accounts receivable, net			16,925	11,105
Inventory			7,738
Prepaid giveaways			111
Prepaid expenses and other current assets			895
Total current assets			30,783
Property and equipment, net			1,632
Intangible assets, net			1,237
Other assets			239
Total assets			33,891
Current liabilities:
Obligation under secured borrowing arrangement			5,547
Line of credit			2,000
Accounts payable			14,897
Accrued liabilities			7,441
Accrued restructuring charges, current			560
Total current liabilities			30,445
Convertible note with a related party, net of discount			16,917
Accrued restructuring charges, long-term			110
Other long-term liabilities			1,060
Total liabilities			48,532
Commitments and contingencies (Note 9)
Stockholders' deficit:
Common stock			14
Additional paid-in capital			159,798
Treasury stock, at cost			(10,039)
Accumulated other comprehensive loss			(142)
Accumulated deficit			(164,272)
Total stockholders' deficit			(14,641)
Total liabilities and stockholders' deficit			33,891
Restatement Adjustments
Current assets:
Cash			0	0
Accounts receivable, net			(6,182)	$ (1,053)
Inventory			2,364
Prepaid giveaways			0
Prepaid expenses and other current assets			170
Total current assets			(3,648)
Property and equipment, net			(856)
Intangible assets, net			0
Other assets			0
Total assets			(4,504)
Current liabilities:
Obligation under secured borrowing arrangement			0
Line of credit			0
Accounts payable			320
Accrued liabilities			(230)
Accrued restructuring charges, current			0
Total current liabilities			90
Convertible note with a related party, net of discount			979
Accrued restructuring charges, long-term			0
Other long-term liabilities			0
Total liabilities			1,069
Commitments and contingencies (Note 9)
Stockholders' deficit:
Common stock			0
Additional paid-in capital			(1,212)
Treasury stock, at cost			0
Accumulated other comprehensive loss			0
Accumulated deficit			(4,361)
Total stockholders' deficit			(5,573)
Total liabilities and stockholders' deficit			$ (4,504)

Note 15 - Changes and Correct_4

Note 15 - Changes and Correction of Errors in Previously Reported Consolidated Financial Statements (Details 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue, net	$ 18,775	$ 24,187
Cost of revenue	15,855	19,165
Gross profit	2,920	5,022
Operating expenses:
Advertising and promotion	751	814
Salaries and benefits	1,880	2,154
Selling, general and administrative	2,642	2,487
Research and development	247	212
Professional fees	726	720
Total operating expenses	6,246	6,387
Loss from operations	(3,326)	(1,365)
Other (expense) income:
Interest and other expense, net	(1,165)	(1,077)
Loss before provision for income taxes	(4,495)	(2,442)
Provision for income taxes	10	69
Net loss	$ (4,505)	$ (2,511)
Net loss per share, basic and diluted	$ (0.30)	$ (0.17)
Weighted average shares used to compute net loss per share, basic and diluted	15,183,402	14,957,217
As Previously Reported
Revenue, net		$ 26,547
Cost of revenue		18,328
Gross profit		8,219
Operating expenses:
Advertising and promotion		3,661
Salaries and benefits		2,154
Selling, general and administrative		2,546
Research and development		212
Professional fees		572
Total operating expenses		9,145
Loss from operations		(926)
Other (expense) income:
Interest and other expense, net		(1,310)
Loss before provision for income taxes		(2,236)
Provision for income taxes		69
Net loss		$ (2,305)
Net loss per share, basic and diluted		$ (0.16)
Weighted average shares used to compute net loss per share, basic and diluted		14,615,677
Restatement Adjustments
Revenue, net		$ (2,360)
Cost of revenue		837
Gross profit		(3,197)
Operating expenses:
Advertising and promotion		(2,847)
Salaries and benefits		0
Selling, general and administrative		(59)
Research and development		0
Professional fees		148
Total operating expenses		(2,758)
Loss from operations		(439)
Other (expense) income:
Interest and other expense, net		233
Loss before provision for income taxes		(206)
Provision for income taxes		0
Net loss		$ (206)
Net loss per share, basic and diluted		$ (0.01)
Weighted average shares used to compute net loss per share, basic and diluted		341,540

Note 15 - Changes and Correct_5

Note 15 - Changes and Correction of Errors in Previously Reported Consolidated Financial Statements (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (4,505)	$ (2,511)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	116	151
Bad debt expense	167	164
Amortization of debt discount	15	15
Inventory provision	177	35
Stock-based compensation	64	137
Changes in operating assets and liabilities:
Accounts receivable	557	(877)
Inventory	3,665	(663)
Prepaid giveaways		(23)
Prepaid expenses and other current assets	(250)	(93)
Other assets	179	(14)
Accounts payable and accrued liabilities	(5,169)	3,389
Accrued restructuring charges	(200)	(45)
Net cash used in operating activities	(4,827)	(232)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(13)	(14)
Net cash used in investing activities	(13)	(14)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit	0	(1,000)
Proceeds from secured borrowing arrangement, net of reserves	8,495	13,494
Payments on secured borrowing arrangement, net of fees	(6,338)	(13,332)
Repayment of capital lease obligations	(26)	(34)
Net cash used in financing activities	3,131	(872)
Effect of exchange rate changes on cash	5	4
Net change in cash	(1,704)	(1,114)
Cash - beginning of period	2,317	6,228
Cash - end of period	613	5,114
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	440	614
Cash paid for taxes	0	68
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Property and equipment acquired in conjunction with capital leases	29	0
Purchase of property and equipment included in current liabilities		13
Interest paid through issuance of shares of common stock	$ 0	53
As Previously Reported
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		(2,305)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		287
Bad debt expense		164
Amortization of debt discount		248
Inventory provision		0
Stock-based compensation		137
Changes in operating assets and liabilities:
Accounts receivable		(443)
Inventory		(1,255)
Prepaid giveaways		(23)
Prepaid expenses and other current assets		100
Other assets		(14)
Accounts payable and accrued liabilities		2,917
Accrued restructuring charges		(45)
Net cash used in operating activities		(232)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(14)
Net cash used in investing activities		(14)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit		(1,000)
Proceeds from secured borrowing arrangement, net of reserves		13,494
Payments on secured borrowing arrangement, net of fees		(13,332)
Repayment of capital lease obligations		(34)
Net cash used in financing activities		(872)
Effect of exchange rate changes on cash		4
Net change in cash		(1,114)
Cash - beginning of period		6,228
Cash - end of period		5,114
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		614
Cash paid for taxes		68
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Property and equipment acquired in conjunction with capital leases		0
Purchase of property and equipment included in current liabilities		13
Interest paid through issuance of shares of common stock		53
Restatement Adjustments
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		(206)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		(56)
Bad debt expense		0
Amortization of debt discount		(233)
Inventory provision		35
Stock-based compensation		0
Changes in operating assets and liabilities:
Accounts receivable		(434)
Inventory		592
Prepaid giveaways		0
Prepaid expenses and other current assets		(170)
Other assets		0
Accounts payable and accrued liabilities		472
Accrued restructuring charges		0
Net cash used in operating activities		0
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		0
Net cash used in investing activities		0
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit		0
Proceeds from secured borrowing arrangement, net of reserves		0
Payments on secured borrowing arrangement, net of fees		0
Repayment of capital lease obligations		0
Net cash used in financing activities		0
Effect of exchange rate changes on cash		0
Net change in cash		0
Cash - beginning of period		0
Cash - end of period		0
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		0
Cash paid for taxes		0
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
Property and equipment acquired in conjunction with capital leases		0
Purchase of property and equipment included in current liabilities		0
Interest paid through issuance of shares of common stock		$ 0