What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-04-15 compared with 2020-05-29 · 1439 added, 1515 removed, 1495 unchanged (66% of the section changed)

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our internal control over financial reporting as of December 31, 2020:

Company does not have written documentation of our internal control policies and procedures.

Company does not have sufficient resources in its accounting function, which restricts the Company’s ability to gather,

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officers hold office at the pleasure of our board of directors, or until their deaths, resignations or removals.

of May 29, 2020, our current directors and executive officers and their ages are:

Principal Positions Held With Us

Chief Investment Officer and Chairman of the Board

of April 15, 2021, our current directors and executive officers and their ages are:

Positions Held With Us

Chief Investment Officer

and Chairman of the Board

Chief Executive Officer, Secretary

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Chief Marketing Officer

Noel DeWinter±

Omprakash Vajinapalli

Major General (Ret) Malcolm B.

Philip Balatsos+

to the Board of Directors on February 6, 2020

±Passed

away on February 4, 2020

to the Board of Directors on October 27, 2020

Mohan has served as Chairman of the Board and a director of Muscle Maker, Inc.

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on the Board.

DeWinter has served as director of Muscle Maker, Inc.

since February 2017 through February 4, 2020.

DeWinter passed away on February 4, 2020 and was replaced on the Board by Stephen Spanos.

DeWinter has over 40 years of both

private and public accounting and finance experience within a number of different industries.

DeWinter received his MBA from

the University of Pennsylvania.

DeWinter served as the Chief Financial Officer of American Restaurant Holdings, Inc.

April 2013 until June 2018.

He was also the Chief Financial Officer of Apollo Medical Holdings from 2008 until 2010.

Apollo Medical

(AMEH) is a public healthcare company providing inpatient hospitalist services to various Southern California hospitals.

experience includes the Chief Financial Officer of Capital Pacific Homes and the same position at Wahlco Environmental Systems.

Wahlco was an NYSE-listed public company during his tenure as Chief Financial Officer.

on his education and extensive experience in financial and accounting matters, we have deemed Mr.

DeWinter fit to serve on the

Southall III.

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Menchik fit to serve on the Board.

Marques has served as director of Muscle Maker, Inc.

since April 2018.

Since June 1992, Mr.

Marques is self-employed

and has owned and operated various businesses in the trucking and real estate industries.

Marques currently serves as the

President of Continental Transportation Corp., a motor freight transportation company.

on his experience in various business entities, we have deemed Mr.

Marques fit to serve on the Board.

Petrosian has served as director of Muscle Maker, Inc.

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on the Board.

Vajinapalli has served as director of Muscle Maker, Inc.

since July 2018.

Vajinapalli, since July

2007, has served as the CEO/President of HighRise IT Consultancy LLC.

Vajinapalli received a Bachelor of Engineering from

Bangalore University in 1993.

on his experience with various technology and IT related industries and education, we deem Mr.

Vajinapalli fit to serve on the

Carl has served as director of Muscle Maker, Inc.

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Carl a fit to serve on the Board.

General (Ret) Malcolm B.

Gen (Ret) Frost has 31 years of military experience providing

large-scale strategic and operational leadership and oversight in the Indo-Asia-Pacific, Middle East, Europe, and the United States

for the United States Army - successfully leading the evolution of soldier training programs in peace and war from platoon through

2-star command level.

(Ret) Frost has been deployed to combat several times in a variety of leadership and command positions.

Since 2019, Maj.

(Ret) Frost served as Executive Consultant for Fortune 500 and larger corporations through Malcolm Frost

and Associates LLC.

From 2015 through 2019, Maj.

(Ret) Frost served as the Commanding General for the US Army Training and

Doctrine Command located at Fort Eustis, Virginia and as the Chief of Public Affairs for the US Army Headquarters based in Washington,

(Ret) Frost also served as the Deputy Commanding General for Support for the US Army, Deputy Director of Operations

for the US Department of Defense and the Director of Operations for the US Army Pacific Headquarters.

He deployed to Bosnia-Hercegovina

as a company commander in 1995 and deployed twice to Iraq as commander of an 800 person Cavalry Squadron operating in Tal Afar

during the Surge in 2006-7, and as commander of a 5K person Stryker Brigade Combat Team operating in Diyala, Salah ad Din, and

Kirkuk provinces in 2010-11.

Additionally, he deployed as Director of Operations of a 4,000 person airborne brigade task force

in Afghanistan in 2002-3.

In addition to a Bachelor of Science Degree in Human Resources Management from the United States Military

Academy at West Point, Maj.

(Ret) Frost holds advanced degrees from Webster University and the U.S.

Army War College in Human

Resources Development and National Security Strategy, respectively.

He is the recipient of the Distinguished Service Medal x2,

Defense Superior Service Medal, Legion of Merit x3, Bronze Star Medal x3, Air Medal, Army Commendation Medal x6 including one

for Valor, Combat Infantryman Badge, Master Parachutist Badge and Ranger Tab.

He is a Certified Project Director and is the recipient

Department of State Meritorious Honor Award for reconstruction, civic and humanitarian achievements while serving

on his vast business and financial experience with the military as well as his business experience, we have deemed Maj.

Frost a fit to serve on the Board.

Since 2016, Mr.

Balatsos has worked in the restaurant and hospitality industries.

founded and has served as the owner operator of LAPH Hospitality which operates a café/catering business and also serves

as a consultant providing financial, purchasing and usage analysis as well as rollout services pertaining to ordering, invoicing

and inventorying systems.

From 2016 through 2018, Mr.

Balatsos held various positions with Barteca Restaurant Group including

Assistant General Manager and Purchasing Manager.

Prior to 2016, Mr.

Balatsos held various position on Wall Street for 16 years

including Vice President, Foreign Exchange Sales/Trading for Credit Suisse, Director, Foreign Exchange Hedge Fund Sales for Barclays

Capital and Financial Advisor for Stifel Nicolaus & Co.

Balatsos graduated from Skidmore College in 1999 with a Bachelor

of Science in Business Administration and from Institute of Culinary Education in 2016.

Relationships

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of Directors and Board Committees

applied to list our common stock on the Nasdaq capital market.

stock (symbol:

GRIL) is listed on the NASDAQ capital market.

Under the rules of Nasdaq, “independent”

must make up a majority of a listed company’s board of directors.

directors must

make up a majority of a listed company’s board of directors.

In addition, applicable Nasdaq rules require that, subject

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Our board of directors has determined that Stephen Spanos, A.B.

Menchik, John Marques, Peter S.

Petrosian, Omprakash Vajinapalli and Jeff Carl, qualify as independent directors

in accordance with the Nasdaq Capital Market, or Nasdaq listing requirements.

Menchik, Peter S.

Petrosian, Malcolm Frost, Philip Baltasos and Jeff Carl, qualify as independent directors in accordance

with the Nasdaq Capital Market, or Nasdaq listing requirements.

Kevin Mohan is not considered independent.

Nasdaq’s

independence definition includes a series of objective tests, such as that the director is not, and has not been for at least

three (3) years, one of our employees and that neither the director nor any of his or her family members has engaged in various

types of business dealings with us.

In addition, as required by Nasdaq rules, our board of directors has made a subjective determination

as to each independent director that no relationships exist that, in the opinion of our board of directors, would interfere with

the exercise of independent judgment in carrying out the responsibilities of a director.

In making these determinations, our board

of directors reviewed and discussed information provided by the directors and us with regard to each director’s business

and personal activities and relationships as they may relate to us and our management.

There are no family relationships among

any of our directors or executive officers.

Nasdaq’s independence

definition includes a series of objective tests, such as that the director is not, and has not been for at least three (3) years,

one of our employees and that neither the director nor any of his or her family members has engaged in various types of business

dealings with us.

In addition, as required by Nasdaq rules, our board of directors has made a subjective determination as to each

independent director that no relationships exist that, in the opinion of our board of directors, would interfere with the exercise

of independent judgment in carrying out the responsibilities of a director.

In making these determinations, our board of directors

reviewed and discussed information provided by the directors and us with regard to each director’s business and personal

activities and relationships as they may relate to us and our management.

There are no family relationships among any of our directors

or executive officers.

required under Nasdaq rules and regulations and in expectation of listing on Nasdaq, our independent directors meet in regularly

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Audit Committee has three members, including Messrs.

Spanos, Marques and Petrosian.

Spanos serves as the chairman of the Audit

Committee and satisfies the definition of “audit committee financial expert”.

Spanos, Balatsos and Petrosian.

Spanos serves as the chairman of the

Audit Committee and satisfies the definition of “audit committee financial expert”.

audit committee is authorized to:

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Other Compensation

Executive Officer of Muscle Maker, Inc.

Chief Executive

Officer of Muscle Maker, Inc.

Ferdinand Groenewald

Financial Officer of Muscle Maker, Inc.

Chief Financial

Officer of Muscle Maker, Inc.

Kenneth Miller

Operating Officer of Muscle Maker, Inc.

October 26, 2018, we entered into an Employment Agreement with Michael Roper, which replaced his employment agreement from May

Chief Operating

Officer of Muscle Maker, Inc.

Chief Operating

Officer of Muscle Maker, Inc.

October 26, 2018, the Company entered into an Employment Agreement with Michael Roper, which replaced his employment agreement

from May 2018.

Pursuant to the Employment Agreement, Mr.

Roper will continue to be employed as our Chief Executive Officer for a period

of two years unless earlier terminated pursuant to the terms of the agreement.

The Employment Agreement will be automatically

extended upon our listing on a national exchange and raising $3 million (the “IPO”).

During the term of the Employment

Agreement, Mr.

Roper will be entitled to a base salary at the annualized rate of $250,000, which will be increased to $275,000

upon achieving various milestones required by the Investors that participated in the September 2018 Offering and again to $350,000

upon our completing the IPO.

Roper will be eligible for a discretionary performance bonus to be paid in cash or equity, provided,

however, no cash bonus will be paid until the closing of the IPO.

Roper is entitled to $100,000 bonus upon closing of the

Roper is also entitled to 14,285 shares of our common stock that will be issued upon a Public offering of at least $3

Roper will continue to be employed as Chief Executive Officer of the

Company for a period of two years unless earlier terminated pursuant to the terms of the agreement.

The Employment Agreement will

be automatically extended upon listing the Company on a national exchange and raising $3,000,000 (the “Public Offering”).

During the term of the Employment Agreement, Mr.

Roper will be entitled to a base salary at the annualized rate of $250,000, which

was increased to $275,000 upon achieving various milestones required by the Investors that participated in the September 2018

Offering and will be increased to $350,000 upon the Company completing the Public Offering.

Roper will be eligible for a discretionary

performance bonus to be paid in cash or equity, provided, however, no cash bonus will be paid until the closing of the Public

Roper was paid a $100,000 bonus upon closing of the Public Offering.

Roper was also issued 14,285 shares of

our common stock upon the closing of the Public Offering.

In addition, pursuant to board approval on June 29, 2019, Mr.

Roper is entitled to 35,714 shares of our restricted common

stock awards that will be issued upon a Public Offering of at least $3 million.

In the event we raise $3 million or $5 million,

Roper will receive 21,428 restricted common stock awards or 35,714 restricted common stock awards, respectively.

Roper will receive 14,285 restricted common stock awards upon the one- and two-year anniversaries of his employment.

Roper’s common stock was issued on April 21, 2020, subsequent to completing the initial public offering.

September 26, 2018, we appointed Ferdinand Groenewald as our Chief Financial Officer and entered into an Employment Agreement

was issued 35,714 shares of our restricted common stock awards upon closing of the Public Offering.

In addition, upon the closing

of the Public Offering Mr.

Roper received 14,285 shares of common stock pursuant to his employment agreement.

Roper was issued

an additional 35,714 pursuant to his employment agreement upon the closing of the Public Offering of at least $5 million.

Roper’s common stock was issued on February 18, 2020 and his bonus was paid, subsequent to completing our Public Offering.

On August 11, 2020, Mr.

Roper agreed to cancel 100,000 shares of common stock previously issued to him and waived all rights to

equity compensation provided under his employment agreement.

September 26, 2018, the Company rehired Ferdinand Groenewald as Chief Financial Officer of the Company and entered into an Employment

Agreement with Mr.

Pursuant to the agreement, Mr.

Groenewald will be employed as our Chief Financial Officer for a period of

two years unless earlier terminated pursuant to the terms of the agreement.

During the term of the agreement, Mr.

Groenewald will

be entitled to a base salary at the annualized rate of $150,000 and will be eligible for a discretionary performance cash bonuses

which will include $10,000 upon completion of the audit for the year ended December 31, 2017 and $25,000 and up to 1,428 shares

of common stock upon completion of a public offering of not less than $3 million together with listing on a national exchange

(the “Public Offering”), which may be increased to 3,571 in the event $5 million is raised.

Groenewald will be employed as Chief Financial Officer of the Company

for a period of two years unless earlier terminated pursuant to the terms of the agreement.

During the term of the agreement,

Groenewald will be entitled to a base salary at the annualized rate of $150,000 and will be eligible for a discretionary performance

cash bonuses which will include $10,000 upon completion of the audit for the year ended December 31, 2017 and $25,000 and up to

1,428 shares of common stock upon completion of a public offering of not less than $3 million together with listing on a national

exchange (the “Public Offering”), which may be increased to 3,571 in the event $5 million is raised.

Groenewald’s

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Groenewald is also eligible to participate in employee

benefits plans as we may institute from time to time that are available for full-time employees.

In addition, pursuant to board

approval, Mr.

Groenewald is entitled to 15,714 shares of our common stock that will be issued upon a Public Offering of at least

Groenewald’s common stock was issued on April 21, 2020, subsequent to completing the initial public offering.

September 26, 2018, we appointed Kenneth Miller as our Chief Operating Officer and entered into an employment agreement with Mr.

benefits plans as the Company may institute from time to time that are available for full-time employees.

Groenewald was paid

a discretionary performance cash and equity bonuses including cash of $25,000 and 19,285 upon completion of the Public Offering.

On August 11, 2020, Mr.

Groenewald agreed to cancel 19,285 shares of the Company’s common stock previously issued and waved

all rights to the equity compensation provided under his employment agreement.

September 26, 2018, the Company appointed Kenneth Miller as Chief Operating Officer of the Company and entered into an Employment

Agreement with Mr.

Pursuant to the agreement, Mr.

Miller will be employed as our Chief Operating Officer for a period of two years unless

earlier terminated pursuant to the terms of the agreement.

Miller will be employed as Chief Operating Officer of the Company for

a period of two years unless earlier terminated pursuant to the terms of the agreement.

During the term of the agreement, Mr.

Miller will be entitled to a

base salary at the annualized rate of $200,000, which will be increased to $275,000 upon successful closing of the Public Offering.

Miller is also entitled to 14,285 shares of our common stock that will be issued upon a Public Offering of at least $3 million.

Miller is eligible for a discretionary performance cash and equity bonuses which will include cash of $50,000 and 10,714 shares

of common stock upon completion of the Public Offering, which may be increased to 17,857 shares in the event $5 million is raised.

Miller is also eligible to participate in employee benefits plans as we may institute from time to time that are available

for full-time employees.

Miller’s common stock was issued on April 21, 2020, subsequent to completing the initial

public offering.

Miller will be entitled to a base salary at the annualized rate of $200,000, which will be increased to $275,000 upon successful

closing of the Public Offering.

Miller was issued 14,285 shares of the Company’s common stock upon closing of the Public

In addition, Mr.

Miller was paid a discretionary performance cash and equity bonuses including cash of $50,000 and 17,857

shares of common stock upon completion of the Public Offering.

Miller is also eligible to participate in employee benefits

plans as we may institute from time to time that are available for full-time employees.

On August 11, 2020, Mr.

Miller agreed

to cancel 32,142 shares of common stock previously issued to him and waived all rights to equity compensation provided under his

employment agreement.

October 26, 2018, we entered into an Employment Agreement with Kevin Mohan.

Pursuant to the Employment Agreement, Mr.

be engaged as our Chief Investment Officer for a period of two years unless earlier terminated pursuant to the terms of the agreement.

The Employment Agreement will be automatically extended upon the IPO.

During the term of the Employment Agreement, Mr.

be entitled to a base salary at the annualized rate of $156,000, which will be increased to $175,000 upon the IPO.

be eligible for a discretionary performance bonus to be paid in cash following the closing of the IPO.

Mohan was paid $50,000

bonus upon closing of the IPO.

Mohan was also issued 28,571 shares of our common stock upon the closing of the IPO.

pursuant to board approval on June 29, 2019, Mr.

Mohan was issued 35,714 shares of our restricted common stock awards upon closing

Mohan’s common stock was issued on February 18, 2020 and his bonus was paid, subsequent to completing our

On August 11, 2020, Mr.

Mohan agreed to cancel 64,285 shares of common stock previously issued to him and waived all rights

to equity compensation provided under his employment agreement.

of Compensation

Roper, Groenewald and Miller received a fixed base salary in an amount determined in accordance with their then employment agreement

with Muscle Maker Inc., and based on a number of factors, including:

Roper, Groenewald, Miller and Mohan received a fixed base salary in an amount determined in accordance with their then employment

agreement with Muscle Maker Inc., and based on a number of factors, including:

nature, responsibilities and duties of the officer’s position;

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competitiveness of the market for the officer’s services.

fiscal 2018 and 2019, Mr.

Groenewald received $5,000 and $10,000 respectively in cash bonus payments.

The 2018 payment was provided

as an incentive towards moving his residence from New Jersey to Texas.

The 2019 payment was provided upon completion of the 2018

audit as stipulated in his employment agreement.

fiscal 2018 and 2019, we did not issue any restricted shares of our common stock to our named executive officers.

Equity Incentive Plans

Roper, Groenewald, Miller and Mohan received a bonus in connection with completing our IPO pursuant to their employment agreement.

In addition, discretionary performance based bonus was paid to Messrs.

Roper, Groenewald, Miller and Mohan.

fiscal 2019 we did not issue any restricted shares of our common stock to our named executive officers.

fiscal 2020, we issued an aggregate of 216,783 shares of our restricted common stock, with an aggregate value fair value of $1,083,915,

to our executive team pursuant to their employment agreements as part of completing the initial public offering.

On August 11,

2020, the executive team entered into an agreement individually with us to cancel an aggregate of 216,783 vested shares of our

restricted common stock previously issued in the first quarter of 2020 and acknowledge that no further compensation is due under

their employment agreements.

Incentive Plans

board of directors and shareholders approved the 2017 Stock Option and Stock Issuance Plan or the 2017 Plan on July 27, 2017 and

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options and non-qualified stock options.

We have reserved a total of 153,061 shares of common stock for issuance under the 2017

Of these shares, approximately 4,591 shares were issued to the directors (765 shares per director) under the 2017 Plan by

the Board of Directors on September 21, 2017.

2017 Plan administrator (which is the Board of Directors or a committee or other person(s) appointed or designated by the Board)

has the authority to administer the 2017 Plan and determine, among other things, the interpretation of any provisions of the 2017

Plan, the eligible employees who are granted options, the number of options that may be granted, vesting schedules, and option

exercise prices.

Our stock options have a contractual life not to exceed ten years.

We issue new shares of common stock upon exercise

of stock options.

options may constitute either “incentive stock options”

within the meaning of Section 422 of the Internal Revenue

Code or “non-statutory stock options.”

The primary difference between incentive stock options and non-statutory stock

options is that the former are not available to non-employees of the corporation.

In addition, while neither is subject to tax

at the time of grant, incentive stock options are not subject to tax at the time of exercise (but could be subject to alternative

minimum tax), while upon exercise of the non-qualified options, the optionee will recognize ordinary income with respect to any

vested shares purchased under the option;

such income will be in an amount equal to the excess of the value of the vested shares

on the exercise date over the exercise price paid for those shares.

We no longer utilize the 2017 Plan.

Of these shares, approximately 4,591 shares

were issued to the directors (765 shares per director) under the 2017 Plan by the Board of Directors on September 21, 2017.

board of directors and shareholders approved the 2019 Equity Incentive Plan or the 2019 Plan.

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We have reserved a total of 214,286 shares of common stock for issuance under the 2019 Plan.

No shares have been issued under

the 2019 Plan to date.

administrator which is the Compensation Committee or another committee of at least two person or the Board has the authority, without

limitation (i) to designate participants to receive awards, (ii) determine the types of awards to be granted to participants,

As of the date of the issuance of

these consolidated financial statements 188,527 shares have been issued under the 2019 Plan.

Upon the adoption of our 2020 Equity

Incentive Plan, we no longer issue awards under the 2019 Plan, but any existing awards granted to our management team and Board

of Directors will remain outstanding under the 2019.

board of directors and shareholders approved and adopted on September 16, 2020 the 2020 Equity Incentive Plan (“2020 Plan”),

effective on September 16, 2020 under which stock options and restricted stock may be granted to officers, directors, employees

and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights, restricted stock

awards, restricted stock Units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination

of the foregoing.

Under the 2020 Plan, the we reserved 1,750,000 shares of common stock for issuance.

As of the date of the issuance

of these consolidated financial statements 178,333 shares have been issued under the 2020 Plan.

administrator, which is the Compensation Committee or another committee of at least two persons or the Board, has the authority,

without limitation (i) to designate participants to receive awards, (ii) determine the types of awards to be granted to participants,

(iii) determine the number of shares of common stock to be covered by awards, (iv) determine the terms and conditions of any awards

granted under the 2020 Plan, (v) determine to what extent and under what circumstances awards may be settled in cash, shares of

common stock, other securities, other awards or other property, or canceled, forfeited or suspended, (vi) determine whether, to

what extent, and under what circumstances the delivery of cash, common stock, other securities, other awards or other property

common stock, other securities, other awards or other property, or cancelled, forfeited or suspended, (vi) determine whether,

to what extent, and under what circumstances the delivery of cash, common stock, other securities, other awards or other property

and other amounts payable with respect to an award shall be made;

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compensation plans:

Plan Category

Securities to be

Outstanding Options

under the Plan

Weighted-Average

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(excluding securities

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

2018, the directors did not receive any compensation.

July 16, 2019, we entered into letter agreements with each of our existing non-executive directors, John Marques, Paul Menchik,

Peter Petrosian, AB Southall III and Omprakash Vajinapalli.

On September 3, 2019 and February 6, 2020, we entered into a letter

agreement with Jeff Carl and Stephen Spanos, respectively, under the same terms as the letter agreements dated July 16, 2019 entered

into with each of the other Directors.

Directors that also serve as executives will not be entitled to any additional compensation

for serving as our directors.

The letter agreements set forth certain terms pursuant to which the directors will serve as our

As directors have not received compensation for services to date, we agreed to provide equity in lieu of cash compensation

and equity compensation for services rendered during 2017, 2018 and 2019.

For past director services in lieu of cash unpaid to

(i) directors that served as directors during the year ended December 31, 2017 will each receive shares of common stock

valued at $4,500 to be priced at the price per share of our public offering in connection with our uplisting, which we refer to

in this prospectus as the Uplisting Offering, (ii) directors that served as directors during the year ended December 31, 2018

will each receive shares of common stock valued at $9,000, which shall be prorated for a partial year of service, to be priced

at the price per share of the Uplisting Offering and (iii) directors that served as directors during the year ended December 31,

2019 through the date of the Uplisting Offering will each receive shares of common stock valued at $9,000, which shall be prorated

for a partial year of service, to be priced at the price per share of the Uplisting Offering.

Following the public offering, directors

will be paid cash for the balance of 2019.

Within 30 days from the Uplisting Offering and assuming a $5.00 per share price, we

will issue 1,082 shares of common stock to Messrs.

Menchik, and Southall, 843 shares of common stock to Mr.

Marques, 878 shares

of common stock to Mr.

Petrosian, 489 shares of common stock to Mr.

Carl and 640 shares of common stock to Mr.

Spanos will not receive shares upon the consummation of the Uplisting Offering.

letter agreements provide that each director will receive an annual cash fee of $9,000 as consideration for their service as a

In addition, each director will receive 1,428 shares of common stock per year for service as a director, 185 shares

of common stock per year for service on each committee and 142 shares of common stock per year for service as chair for such committee.

The shares of common stock for committee service will be limited to two committees.

directors have not received compensation for services to date, we agreed to provide equity in lieu of cash compensation and equity

compensation for services rendered during 2017, 2018 and 2019.

For past director services in lieu of cash unpaid to date:

directors that served as directors during the year ended December 31, 2017 will each receive shares of common stock valued at

$4,500 to be priced at the price per share of our public offering in connection with the Uplisting Offering, (ii) directors that

served as directors during the year ended December 31, 2018 will each receive shares of common stock valued at $9,000, which shall

be prorated for a partial year of service, to be priced at the price per share of the Uplisting Offering and (iii) directors that

served as directors during the year ended December 31, 2019 through the date of the Uplisting Offering will each receive shares

of common stock valued at $9,000, which shall be prorated for a partial year of service, to be priced at the price per share of

the Uplisting Offering.

Following the public offering, directors will be paid cash for the balance of 2019.

further compensation for past director services, we will issue shares of common stock as follows, which shall be prorated for

a partial year:

(i) directors that served as directors during the year ended December 31, 2017 will each receive 714 shares of

common stock, (ii) directors that served as directors during the year ended December 31, 2018 will each receive 1,428 shares of

common stock and (iii) directors that served as directors during the year ended December 31, 2019 will each receive 1,428 shares

of common stock.

Equity compensation plans

approved by security holders

Equity compensation

plans not approved by security holders

September 21, 2017, Muscle Maker granted 765 shares of common stock under our Muscle Maker 2017 Stock Option and Stock Issuance

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of the date of grant and (ii) 8.333% as of (a) October 1, 2017, (b) November 1, 2017, (c) December 1, 2017, and (d) January 1,

2018, the directors did not receive any compensation.

July 16, 2019, the board of directors approved a board compensation plan that would compensate the board members for their deferred

compensation for 2019, 2018 and 2017.

The board members are eligible for cash compensation of $4,500 or $9,000 per year.

paid as follows:

(i) directors serving on the board during 2018 and 2017, will be granted shares is lieu of payment as the letter

agreements set forth certain terms pursuant to which the directors will serve as directors of the Company.

addition, on an ongoing basis pursuant to the approved board compensation plan each director will receive 1,428 shares of common

stock per year for service as director, 185 shares of common stock per year for service on each committee and 142 shares of common

stock per year for service as chair for such committee.

The shares of common stock for committee service will be limited to two

Company issued shares of common stock upon the occurrence of the public offering and up listing on a national exchange as follows,

which was prorated for a partial year:

(i) directors that served as directors during the year ended December 31, 2017 each received

714 shares of common stock, (ii) directors that served as directors during the year ended December 31, 2018 each received 1,428

shares of common stock and (iii) directors that served as directors during the year ended December 31, 2019 each received 1,428

shares of common stock.

directors did not received compensation for services prior to the Company being up listed on a national exchange, the Company

agreed to provide equity in lieu of cash compensation and equity compensation for services rendered during 2017, 2018 and 2019.

For past director services in lieu of cash unpaid to date:

(i) directors that served as directors during the year ended December

31, 2017 each received shares of common stock valued at $4,500 priced at the price per share of the Company’s public offering

in connection with its uplisting (the “Uplisting Offering”), (ii) directors that served as directors during the year

ended December 31, 2018 each received shares of common stock valued at $9,000, which was prorated for a partial year of service,

and priced at the price per share of the Uplisting Offering and (iii) directors that served as directors during the year ended

December 31, 2019 through the date of the Uplisting Offering each received shares of common stock valued at $9,000, which was

prorated for a partial year of service, priced at the price per share of the Uplisting Offering.

December 4, 2020, the board of directors approved a new board compensation plan that would compensate the board members for their

deferred compensation for the fourth quarter 2020 through the third quarter of 2021.

The board members are eligible for cash compensation

of $12,000 per year to be paid quarterly within 30 days of the close of each quarter.

addition, on an ongoing basis pursuant to the approved board compensation plan each director will receive $8,000 in value of common

stock per year for service as director, $6,000 in value of shares of common stock per year for service on each committee and $4,000

in value of shares of common stock per year for service as chair for such committee.

The number of shares to be issued would be

based upon the closing price of the last trading date of each calendar quarter.

The shares of common stock for committee service

will be limited to two committees.

Mohan is an employee-director and does not receive compensation for serving in his role as a director.

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OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS .

following table sets forth information about the beneficial ownership of our common stock at May 29, 2020, for:

following table sets forth information about the beneficial ownership of our common stock at April 15, 2021, for:

person, or group of affiliated persons, whom we know to beneficially own more than 5% of our common stock;

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or warrants or upon conversion of a security that are either exercisable or convertible on or before a date that is 60 days after

May 29, 2020.

These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants

for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose

of computing the percentage ownership of any other person.

Unless otherwise indicated, the persons or entities identified in this

table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable

community property laws.

as otherwise noted below, the address for persons listed in the table is c/o Muscle Maker, Inc., 308 East Renfro Street, Suite

101, Burleson, Texas 76028.

April 15, 2021.

These shares are deemed to be outstanding and beneficially owned by the person holding those options or

warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the

purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, the persons or entities identified

in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to

applicable community property laws.

as otherwise noted below, the address for persons listed in the table is c/o Muscle Maker, Inc., 2600 South Shore Blvd., Suite

300, League City, Texas 77573.

percentage ownership information shown in the column labeled “Percentage of Shares Outstanding”

is based upon 13,826,734

shares of common stock outstanding as of May 29, 2020.

Name of Beneficial Owner

Number of Shares Beneficially

Percentage of Shares Outstanding Prior to Offering (1)

shares of common stock outstanding as of April 15, 2021.

of Beneficial Owner

Beneficially Owned (1)

Outstanding Prior to

5% Stockholders:

Catalytic Holdings 1 LLC (10)

Greentree Financial Group, Inc (15)

Thoroughbred Diagnostics, LLC (10)

Directors and Named Executive Officers:

Holdings 1 LLC (2)

Thoroughbred Diagnostics,

Armistice Capital Master

Directors and Named Executive

Kevin Mohan (4)

1 unchanged sentence

Kenneth Miller (7)

Noel De Winter (4)

Stephen Spanos (8)

Southall, III

John Marques (2)

Petrosian (7)

Omprakash Vajinapalli (8)

Jeff Carl (12)

All executive officers and directors as a group (13 persons)

Major General (ret)

Malcolm Frost (13)

Philip Balatsos (14)

All executive officers and directors

as a group (12 persons)

denotes less than 1%

ownership as reported in the above table has been determined in accordance with Rule

13d-3 promulgated under the Securities Exchange Act of 1934, as amended, and is not necessarily

indicative of beneficial ownership for any other purpose.

The number of shares of common

stock shown as beneficially owned includes shares of common stock issuable upon (i) the

exercise of stock options that will become exercisable within sixty (60) days of May

29, 2020, (ii) the conversion of the convertible promissory notes into shares

of our common stock, and (iii) the exercise of warrants that will become exercisable

within sixty (60) days of May 29, 2020.

Shares of common stock issuable pursuant

to the foregoing methods are deemed outstanding for purposes of calculating the percentage

of beneficial ownership of the person or entity holding such securities.

ownership as reported in the above table has been determined in accordance with Rule 13d-3 promulgated under the Securities

Exchange Act of 1934, as amended, and is not necessarily indicative of beneficial ownership for any other purpose.

of shares of common stock shown as beneficially owned includes shares of common stock issuable upon (i) the exercise of stock

options that will become exercisable within sixty (60) days of April 15, 2021, (ii) the conversion of the convertible

promissory notes into shares of our common stock, and (iii) the exercise of warrants that will become exercisable within sixty

(60) days of April 15, 2021.

Shares of common stock issuable pursuant to the foregoing methods are deemed outstanding

for purposes of calculating the percentage of beneficial ownership of the person or entity holding such securities.

the total percentages of beneficial ownership are in excess of one hundred percent (100%).

Marques beneficially owns (i) indirectly 167,454 shares of Common Stock of Muscle Maker through Membership, LLC, (ii) directly

55,831 shares of Common Stock of Muscle Maker of which 35,714 are subject to presently exercisable purchase warrants issued

to John Marques.

John Marques is the sole member and manager of Membership, LLC.

Marques may be deemed to have

voting and dispositive power of all securities beneficially owned by Membership, LLC reported herein.

Mohan beneficially owns (i) indirectly 5,571 shares of Common Stock of Muscle Maker through various family members that reside

in the same household as Kevin Mohan and (ii) directly 141,680 shares of common stock of Muscle Maker of which 7,142 are subject

to presently exercisable purchase warrants issued to Kevin Mohan.

De Winter beneficially owns (i) indirectly 4,178 shares of Common Stock of Muscle Maker as trustee of the Arthur Noel DeWinter

(ii) directly 11,123 shares of Common Stock of Muscle Maker.

DeWinter is also to be issued 1,082 shares of common

stock at the price of the Company’s public offering as compensation for serving as a director during 2018 and through

fourth quarter 2019.

The shares were priced assuming a public offering of $5.00 per share.

Southall III beneficially owns (i) directly 78,996 shares of Common Stock of Muscle Maker, and (ii) directly 43,461 shares

of Common Stock of Muscle Maker subject to presently exercisable purchase warrants issued to A.B.

Menchik beneficially owns (i) directly 47,699 shares of Common Stock of Muscle Maker, and (ii) directly 10,000 shares of

Common Stock of Muscle Maker subject to presently exercisable purchase warrants issued to Paul L.

Petrosian beneficially owns directly 6,273 shares of Common Stock of Muscle Maker issued for services rendered as a board

Vajinapalli beneficially owns (i) directly 18,457 shares of Common Stock of Muscle Maker and (ii) indirectly 9,740 shares

of Common Stock of Muscle Maker through a family member that reside in the same household as Omprakash Vajinapalli.

Carl beneficially owns directly 1,763 shares of Common Stock of Muscle Maker.

Holdings, LLC beneficially owns (i) 1,701,500 shares of Common Stock of Muscle Maker (ii) 873,246 shares of Common Stock of

Muscle Maker which are subject to presently exercisable purchase warrants.

The natural person with voting and investment control

for Catalytic Holdings, LLC is Dmitriy Shapiro.

Thoroughbred Diagnostics, LLC beneficially owns (i) 1,200,000 shares of Common

Stock of Muscle Maker (ii) 600,000 shares of Common Stock of Muscle Maker which are subject to presently exercisable purchase

The natural person with voting and investment control for Thoroughbred Diagnostics, LLC is Joey Giamichael.

Roper beneficially owns directly 100,000 shares of Common Stock of Muscle Maker issued for services rendered pursuant to his

employment agreement.

Groenewald beneficially owns directly 19,285 shares of Common Stock of Muscle Maker issued for services rendered pursuant

to his employment agreement.

Miller beneficially owns directly 32,142 shares of Common Stock of Muscle Maker issued for services rendered pursuant to his

employment agreement.

Spanos beneficially owns directly 1,439 shares of common stock of the Company for serving as a director through the second

quarter of 2020.

Financial Group, Inc beneficially owns 420,000 shares of Common Stock of Muscle Maker.

Holdings, LLC beneficially owns (i) 1,145,888 shares of common stock of the Company (ii) 850,750 shares of Common

Stock of the Company which are subject to presently exercisable purchase warrants.

The natural person with voting and

investment control for Greentree Financial Group, Inc is Robert C Cottone.

investment control for Catalytic Holdings, LLC is Dmitriy Shapiro.

Thoroughbred Diagnostics, LLC beneficially owns (i) 1,109,000

shares of Common Stock of Muscle Maker (ii) 600,000 shares of Common Stock of Muscle Maker which are subject to presently

exercisable purchase warrants.

The natural person with voting and investment control for Thoroughbred Diagnostics, LLC is

Joey Giamichael.

Capital Master Fund LTD beneficial owns (i) 1,250,000 shares of the common stock of the Company (ii) 4,115,227 shares of common

stock of the Company which are subject to presently exercisable purchase warrants and (iii) 2,865,227 shares of common stock

of the Company which are subject to presently exercisable pre-funded purchase warrants.

There is a beneficial ownership limitation

on the warrants and prefunded warrants owned by the holder that limits beneficial ownership of the holder to 9.99% of the

number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable

upon exercise of the warrant at any time.

The beneficial ownership limitation can be increase by the holder by giving written

notice to the Company, but this will not take effect until 61 days after the delivery of the notice to the Company.

Capital Master Fund LTD is managed by Armistice Capital, LLC, its investment manager.

Steven Boyd, the managing member of Armistice Capital, LLC

has the sole voting and investment power over the securities held by Armistice Capital Master Fund LTD.

Mohan beneficially owns (i) indirectly 5,574 shares of Common Stock of Muscle Maker through various family members that reside

in the same household as Kevin Mohan and (ii) directly 130,963 shares of common stock of Muscle Maker of which 10,714

are subject to presently exercisable purchase warrants issued to Kevin Mohan.

Roper beneficial owns directly 100,000 shares of common stock of the Company for serving as the Chief Executive Officer

of the Company.

Groenewald beneficial owns directly 19,285 shares of common stock of the Company for serving as the Chief Financial Officer

of the Company.

Miller beneficial owns directly 32,142 shares of common stock of the Company for serving as Chief Operating Officer of the

Spanos beneficially owns directly 6,701 shares of common stock of the Company for serving as a director through the

second quarter of 2020.

Southall III beneficially owns (i) directly 104,095 shares of Common Stock of Muscle Maker, and (ii) directly 10,000

shares of Common Stock of Muscle Maker subject to presently exercisable purchase warrants issued to A.B.

Menchik beneficially owns (i) directly 52,930 shares of Common Stock of Muscle Maker, and (ii) directly 10,000 shares

of Common Stock of Muscle Maker subject to presently exercisable purchase warrants issued to Paul L.

Petrosian beneficially owns directly 10,022 shares of Common Stock of Muscle Maker issued for services rendered

as a board of director.

Carl beneficially owns directly 8,713 shares of Common Stock of Muscle Maker for services rendered as a board of director.

General (ret) Malcolm Frost beneficially owns directly 1,692 shares of Common Stock of Muscle Maker for services rendered

as a board of director.

Balatsos beneficially owns directly 3,206 shares of Common Stock of Muscle Maker for services rendered as a board of

RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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pursuant to board approval, Mr.

Groenewald is entitled to 15,714 shares of our common stock that will be issued upon a Public

Offering of at least $3,000,000.

Groenewald was issued 15,714 shares of our common stock upon closing of the IPO.

On August 11,

Groenewald agreed to cancel 19,285 shares of common stock previously issued to him and waived all rights to equity compensation

provided under his employment agreement.

September 26, 2018, we appointed Kenneth Miller as our Chief Operating Officer and entered into an Employment Agreement with Mr.

6 unchanged sentences

Miller is also entitled to 14,285 shares of our common stock that will be issued upon a Public offering of at least $3,000,000.

Miller is eligible for a discretionary performance cash and equity bonuses which will include cash of $50,000 and 10,714 shares

of common stock upon completion of the Public Offering, which may be increased to 17,857 shares in the event $5 million is raised.

Miller is also eligible to participate in employee benefits plans as we may institute from time to time that are available

for full-time employees.

Miller is eligible for a discretionary performance cash and equity bonuses which will include cash of $50,000.

was issued 14,285 shares of our common stock upon closing of the IPO.

In addition, Mr.

Miller was paid a discretionary performance

cash and equity bonuses including cash of $50,000 and 17,857 shares of common stock upon completion of the IPO.

also eligible to participate in employee benefits plans as we may institute from time to time that are available for full-time

On August 11, 2020, Mr.

Miller agreed to cancel 32,142 shares of common stock previously issued to him and waived all

rights to equity compensation provided under his employment agreement

October 26, 2018, we entered into an Employment Agreement with Michael Roper, which replaced his employment agreement from May

11 unchanged sentences

in cash or equity, provided, however, no cash bonus will be paid until the closing of the IPO.

Roper is entitled to $100,000

bonus upon closing of the IPO.

Roper is also entitled to 14,285 shares of our common stock that will be issued upon a Public

offering of at least $3,000,000.

In addition, pursuant to board approval on June 29, 2019, Mr.

Roper is entitled to 35,714 shares

of our common stock that will be issued upon a Public Offering of at least $3,000,000.

In the event we raise $3 million or $5

million upon completion of a public offering together with listing on a national exchange, then Mr.

Roper will receive 21,428

restricted common stock awards or 35,714 restricted common stock awards, respectively.

In addition, Mr.

Roper will receive 14,285

restricted common stock awards upon the one- and two-year anniversaries of his employment.

Roper was paid $100,000 bonus

upon closing of the IPO.

Roper was also issued 14,285 shares of our common stock upon the closing of the IPO.

pursuant to board approval on June 29, 2019, Mr.

Roper was issued 35,714 shares of our restricted common stock awards upon closing

In addition, upon the closing of the IPO Mr.

Roper received 14,285 shares of common stock pursuant to his employment

Roper was issued an additional 35,714 pursuant to his employment agreement upon the closing of the IPO of at least

Roper’s common stock was issued on February 18, 2020 and his bonus was paid, subsequent to completing our

On August 11, 2020, Mr.

Roper agreed to cancel 100,000 shares of common stock previously issued to him and waived all rights

to equity compensation provided under his employment agreement.

October 26, 2018, we entered into an Employment Agreement with Kevin Mohan.

5 unchanged sentences

be eligible for a discretionary performance bonus to be paid in cash following the closing of the IPO.

Mohan is entitled to

Mohan was paid $50,000

bonus upon closing of the IPO.

In the event we raise $3 million or $5 million, then Mr.

Mohan will receive 14,285 restricted

common stock awards or 28,571 restricted common stock awards, respectively.

In addition, pursuant to board approval on June 29,

Mohan is entitled to 35,714 shares of our common stock that will be issued upon a Public Offering of at least $3,000,000.

Mohan was also issued 28,571 shares of our common stock upon the closing of the IPO.

pursuant to board approval on June 29, 2019, Mr.

Mohan was issued 35,714 shares of our restricted common stock awards upon closing

Mohan’s common stock was issued on February 18, 2020 and his bonus was paid, subsequent to completing our

On August 11, 2020, Mr.

Mohan agreed to cancel 64,285 shares of common stock previously issued to him and waived all rights

to equity compensation provided under his employment agreement.

have entered into indemnification agreements with each of our directors and entered into such agreements with certain of our executive

11 unchanged sentences

Fees consist of fees billed and expected to be billed for services rendered for the audit of our consolidated financial statements

for the fiscal years ended December 31, 2019 and 2018 and in connection with the filing of Forms 1-A.

for the fiscal years ended December 31, 2020 and 2019 and in connection with the filing of multiple Forms S-1.

Audit-Related

13 unchanged sentences

AND FINANCIAL STATEMENT SCHEDULES .

Form of Underwriting Agreement (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

Articles of Incorporation of Muscle Maker, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 14, 2019)

Bylaws of Muscle Maker, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 14, 2019)

Certificate of Change Pursuant to NRS 78.209 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 11, 2019)

Form of Selling Agent Warrant (incorporated by reference to Exhibit 3.1 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Form of Warrant (incorporated by reference to Exhibit 3.2 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Form of Convertible Promissory Note (incorporated by reference to Exhibit 3.3 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Form of Subscription Agreement for BANQ subscribers (incorporated by reference to Exhibit 4.1 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Form of Subscription Agreement (incorporated by reference to Exhibit 4.2 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Form of Warrants to Purchase Common Stock –

September 2018 Offering (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on November 6, 2018)

Form of 15% Senior Secured Convertible Promissory Notes –

September 2018 Offering (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on November 6, 2018)

Form of Securities Purchase Agreement by and between Muscle Maker, Inc.

and the Investors –

September 2018 Offering (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 6, 2018).

Form of Security and Pledge Agreement by and between Muscle Maker, Inc.

and the Investors –

September 2018 Offering (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on November 6, 2018).

Form of 12% senior Secured Convertible Promissory Notes - April 2019 Offering (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April 17, 2019)

Form of Warrants to Purchase Common Stock - April 2019 Offering (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on April 17, 2019)

Form of Securities Purchase Agreement by and between Muscle Maker, Inc., Muscle Maker USA, Inc.

and the April 2019 Investors (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 17, 2019)

Form of Security Agreement by and between Muscle Maker, Inc., Muscle Maker USA, Inc.

and the April 2019 Investors (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 17, 2019)

Form of Security Agreement by and between Muscle Maker, Inc., Muscle Maker USA, Inc.

and the April 2019 Investors (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 17, 2019)

First Amendment to 15% Senior Secured Convertible Promissory Note dated April 10, 2019 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on April 17, 2019)

Form of Representative’s Warrant (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

of Incorporation of Muscle Maker, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s

Current Report on Form 8-K filed on November 14, 2019)

of Muscle Maker, Inc.

(incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed

on November 14, 2019)

of Change Pursuant to NRS 78.209 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form

8-K filed on December 11, 2019)

of Amendment to Articles of Incorporation of Muscle Maker, Inc., a Nevada corporation

(incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report

on Form 10-Q filed on November 16, 2020)

of Warrants to Purchase Common Stock –

September 2018 Offering (incorporated by reference to Exhibit 4.2 to the Registrant’s

Current Report on Form 8-K filed on November 6, 2018)

of Warrants to Purchase Common Stock - April 2019 Offering (incorporated by reference to Exhibit 4.2 to the Registrant’s

Current Report on Form 8-K filed on April 17, 2019)

of Representative’s Warrant (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities

and Exchange Commission on November 26, 2019)

Equity Incentive Plan (Incorporated by reference to the Amendment No.

3 to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on January 10, 2020)

Muscle Maker 2017 Stock Option and Stock Issuance Plan and form of award agreements (incorporated by reference to Exhibit 6.1 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Form of Restricted Stock Agreement under Muscle Maker 2017 Stock Option and Stock Issuance Plan (incorporated by reference to Exhibit 6.5 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Assignment and Assumption Agreement, dated August 25, 2017, between Muscle Maker Brands Conversion, Inc.

and Muscle Maker Development, LLC (incorporated by reference to Exhibit 6.7 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Agreement of Conveyance, Transfer and Assigning of Assets and Assumptions of Obligations, dated September 15, 2017, between Muscle Maker, Inc.

and Muscle Maker Corp., LLC (incorporated by reference to Exhibit 6.8 to the Registrant’s Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Employment Agreement, between Muscle Maker and Ferdinand Groenewald (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 22, 2018)

Employment Agreement, between Muscle Maker and Ken Miller (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on October 22, 2018)

Employment Agreement between Michael Roper and Muscle Maker, Inc.

dated October 26, 2018 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on November 6, 2018)

Employment Agreement between Kevin Mohan and Muscle Maker, Inc.

dated October 26, 2018 (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on November 6, 2018)

Employment Agreement between Aimee Infante and Muscle Maker, Inc.

dated May 6, 2019 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 10, 2019)

3 to the Form S-1 Registration Statement filed with

the Securities and Exchange Commission on January 10, 2020)

Equity Incentive Plan

Maker 2017 Stock Option and Stock Issuance Plan and form of award agreements (incorporated by reference to Exhibit 6.1 to

Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

of Restricted Stock Agreement under Muscle Maker 2017 Stock Option and Stock Issuance Plan (incorporated by reference to Exhibit

6.5 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September 21, 2017)

and Assumption Agreement, dated August 25, 2017, between Muscle Maker Brands Conversion, Inc.

and Muscle Maker Development,

LLC (incorporated by reference to Exhibit 6.7 to Amendment No 1 to the Offering Statement Report on Form 1-A/A filed on September

of Conveyance, Transfer and Assigning of Assets and Assumptions of Obligations, dated September 15, 2017, between Muscle Maker,

and Muscle Maker Corp., LLC (incorporated by reference to Exhibit 6.8 to the Registrant’s Amendment No 1 to the

Offering Statement Report on Form 1-A/A filed on September 21, 2017)

Agreement, between Muscle Maker and Ferdinand Groenewald (incorporated by reference to Exhibit 10.1 to the Registrant’s

Current Report on Form 8-K filed on October 22, 2018)

Agreement, between Muscle Maker and Ken Miller (incorporated by reference to Exhibit 10.2 to the Registrant’s Current

Report on Form 8-K filed on October 22, 2018)

Agreement between Michael Roper and Muscle Maker, Inc.

dated October 26, 2018 (incorporated by reference to Exhibit 10.3 to

the Registrant’s Current Report on Form 8-K filed on November 6, 2018)

Agreement between Kevin Mohan and Muscle Maker, Inc.

dated October 26, 2018 (incorporated by reference to Exhibit 10.4 to

the Registrant’s Current Report on Form 8-K filed on November 6, 2018)

Agreement between Aimee Infante and Muscle Maker, Inc.

dated May 6, 2019 (incorporated by reference to Exhibit 10.1 to the

Registrant’s Current Report on Form 8-K filed on May 10, 2019)

10.10&dagger;

Form of Director Agreement dated July 16, 2019 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 10, 2019)

of Director Agreement dated July 16, 2019 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report

on Form 8-K filed on May 10, 2019)

10.11±

Master Distribution Agreement between Muscle Maker Franchising LLC and Sysco Corporation dated June 1, 2011 (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

Distribution Agreement between Muscle Maker Franchising LLC and Sysco Corporation dated June 1, 2011 (Incorporated by reference

to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

10.12±

Amendment to Master Distribution Agreement between Muscle Maker Franchising LLC and Sysco Corporation dated October 17, 2017 (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

Form of Conversion Agreement (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 10, 2019)

Form of Addendum to Conversion Agreement (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 10, 2019)

List of Subsidiaries (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

to Master Distribution Agreement between Muscle Maker Franchising LLC and Sysco Corporation dated October 17, 2017 (Incorporated

by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission on November 26, 2019)

of Conversion Agreement (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed

on December 10, 2019)

of Addendum to Conversion Agreement (Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on

Form 8-K filed on December 10, 2019)

of Subsidiaries (Incorporated by reference to the Form S-1 Registration Statement filed with the Securities and Exchange Commission

on November 26, 2019)

Certification

18 unchanged sentences

to be signed on its behalf by the undersigned, thereunto duly authorized.

April 15, 2021

Executive Officer

7 unchanged sentences

Investment Officer and Chairman of the Board

Omprakash Vajinapalli

/s/ Jeff Carl

Malcolm Frost

General (Ret) Malcolm B.

Philip Balatsos

MAKER, INC AND SUBSIDIARIES

9 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

To the Stockholders and Board of Directors

Muscle Maker, Inc.

and Subsidiaries

on the Financial Statements

have audited the accompanying consolidated balance sheets of Muscle Maker, Inc.

and Subsidiaries (the “Company”) as

of December 31, 2019 and 2018, the related consolidated statements of operations, changes in stockholders’

equity (deficit)

and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to

as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for

each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the

United States of America.

Paragraph –

Change in Accounting Principles

discussed in Note 3 to the financial statements, the Company changed its method of accounting for revenue recognition in 2019

due to the adoption of ASU No.

2014-09, Revenue from Contracts with Customers (Topic 606) , as amended, effective January

1, 2019, using the modified retrospective approach.

Paragraph –

Going Concern

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully

described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise

additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheet s of Muscle Maker, Inc.

and Subsidiaries (the “Company”) as of December 31, 2020 and 2019, the

related consolidated statements of operations, changes in stockholders’

equity (deficit) and cash flows for each of the

two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended

December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph –

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 1, the Company has incurred

significant losses and net cash used in operations and needs to raise additional funds to meet its obligations and sustain its

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s

plans in regards to these matters are also described in Note 1.

The financial statements do not include any adjustments that might

result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required

to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the

effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provide a

reasonable basis for our opinion.

/s/ Marcum llp

We have served as the Company’s auditor since 2016 .

We have served as the Company’s auditor

April 15, 2021

AND SUBSIDIARIES

1 unchanged sentence

Current Assets:

Accounts receivable, net of allowance for doubtful accounts of $75,000 and $45,000 as of December 31, 2019 and December 31, 2018, respectively

Current portion of loans receivable, net of allowance of $55,000 at December 31, 2019 and December 31, 2018, respectively

Current portion of loans receivable from related party

Prepaid expenses and other current assets

Accounts receivable,

net of allowance for doubtful accounts of $75,000 as of December 31, 2020 and December 31, 2019, respectively

Current portion of

loans receivable, net of allowance of $106,900 and $55,000 at December 31, 2020 and December 31, 2019, respectively

expenses and other current assets

Total Current Assets

Property and equipment, net

Intangible assets, net

Loans receivable, non-current

Security deposits and other assets

Property and equipment,

Intangible assets,

Loans receivable,

deposits and other assets

Liabilities and Stockholders’

Equity (Deficit)

Current Liabilities:

Accounts payable and accrued expenses

Convertible note payable to Former Parent, net of debt discount of $0 and $43,178 at December 31, 2019 and December 31, 2018, respectively

Convertible notes payable, net of debt discount of $38,918 at December 31, 2019

Accounts payable and

accrued expenses

Convertible note

payable to Former Parent

Convertible notes

payable, net of debt discount of $0 and $38,918 at December 31, 2020 and December 31, 2019

Other notes payable

Other notes payable, related party

Deferred revenue, current

Other notes payable,

related party

Deferred revenue,

Deferred rent, current

Other current liabilities

current liabilities

Total Current Liabilities

Convertible notes payable, net of debt discount of $0 and $1,313,259 at December 31, 2019 and December 31, 2018, respectively

Convertible notes payable, related parties, net of debt discount of $0 and $233,462 at December 31, 2019 and December 31, 2018, respectively

Convertible notes

Other notes payable

Other notes payable, related parties

Deferred revenue, non-current

Deferred rent, non-current

Total Liabilities

Deferred revenue,

rent, non-current

Commitments and Contingencies

Stockholders’

Equity (Deficit):

Common stock, $0.0001 par value, 14,285,714 shares authorized, 5,714,464 and 1,489,686 shares issued and outstanding as of December 31, 2019, and December 31, 2018, respectively

Additional paid-in capital

Accumulated deficit

Total Stockholders’

Total Liabilities and Stockholders’

Equity (Deficit)

Common stock, $0.0001

par value, 25,000,000 shares authorized, 11,725,764 and 5,714,464 shares issued and outstanding as of December 31, 2020, and

December 31, 2019, respectively

Additional paid-in

Stockholders’

Liabilities and Stockholders’

Notes to the Consolidated Financial Statements

1 unchanged sentence

STATEMENTS OF OPERATIONS

For the Twelve Months Ended

Company restaurant sales, net of discounts

Franchise royalties and fees

Franchise advertising fund contributions

Other revenues

the Years Ended

restaurant sales, net of discounts

Franchise royalties

advertising fund contributions

Total Revenues

Operating Costs and Expenses:

Restaurant operating

Food and beverage

restaurant operating expenses

Food and beverage costs

Other restaurant operating expenses

Total restaurant operating expenses

Costs of other revenues

Depreciation and amortization

Other expenses incurred for closed locations

Franchise advertising fund expenses

General and administrative expenses

Total Costs and Expenses

Total restaurant operating

Impairment of intangible

Depreciation and

Preopening expenses

Franchise advertising

fund expenses

and administrative expenses

Costs and Expenses

Loss from Operations

Other (Expense) Income:

Interest expense, net

Loss on sale of CTI

Inducement expense related to convertible notes

(15,102,206 )

Warrant modification expense

Amortization of debt discounts

Total Other Expense, Net

(24,731,039 )

Other Expenses:

Interest expense,

Change in fair value

of accrued compensation

Inducement expense

related to convertible notes

Warrant modification

of debt discounts

Other Expenses, Net

Loss Before Income Tax

(28,385,044 )

Income tax provision

(28,385,044 )

Net loss attributable to the non-controlling interest

Net Loss Attributable to Controlling Interest

$ (28,385,044 )

$ (7,202,469 )

Net Loss Attributable to Controlling Interest Per Share:

Basic and Diluted

Weighted Average Number of Common Shares Outstanding:

Basic and Diluted

tax provision

Net Loss Per Share:

Weighted Average Number of Common Shares

Notes to the Consolidated Financial Statements

1 unchanged sentence

STATEMENTS OF CHANGES IN STOCKHOLDERS’

EQUITY (DEFICIT )

- December 31, 2018

$ (23,833,656 )

$ (2,843,135 )

effect of change in accounting principle

of restricted stock

stock issued as compensation for services

conversion feature - Convertible Notes

issued and recorded as debt discount in connection with convertible notes payable

compensation:

Amortization of restricted common stock

Balance - March 31,

$ (26,193,037 )

$ (4,461,942 )

stock issued in exchange for interest earned on other notes payable

stock issued in exchange for interest earned on convertible notes payable

conversion feature - Convertible Notes

issued and recorded as debt discount in connection with convertible notes payable

compensation:

Amortization of restricted common stock

Balance - June 30,

$ (27,735,643 )

$ (4,876,057 )

stock issued as compensation to board of directors

stock issued as compensation for services

compensation:

Amortization of restricted common stock

Balance - September

$ (30,084,472 )

Balance - December 31, 2019

$ (53,094,602 )

stock issued as compensation to board of directors

of convertible notes payable into common stock

compensation:

Amortization of restricted common stock

Issuance of restricted stock

Common stock issued upon offering on February 12, 2020, net of underwriter’s

discount and offering costs of $920,000

Restricted common stock issued as compensation to executive team upon

completion of the initial public offering

Common stock issued as compensation to board of directors

Common stock issued as compensation for services

Common stock issued in exchange for accrued interest

Restricted common stock cancelled by executive team

Common stock issued as compensation for services as part of settlement

Common stock cancelled by consultant issued for prior services

Offering on September 10, 2020, net of underwriter’s discount and

offering cost of $660,000

Over-allotment exercised on October 27, 2020, net of underwriter’s

discount and offering cost of $75,600

Stock-based compensation:

Restricted common stock

Warrants –

Issued as compensation for services

Cancelled by consultant for prior services

(10,099,105 )

- December 31, 2019

Balance - December 31, 2020

$ (63,193,707 )

2 unchanged sentences

STATEMENTS OF CHANGES IN STOCKHOLDERS’

Additional Paid-in

Total Controlling

Non-Controlling

(DEFICIT) EQUITY

Balance - December 31, 2018

1 unchanged sentence

$ (2,843,135 )

$ (3,201,795 )

Beneficial conversion

feature - Convertible Notes

Warrants issued

in connection with convertible debt

Warrants issued

and recorded as debt discount in connection with notes payable

Offering on March

29, 2018, net of underwriter’s discount and offering cost of $58,798

Conversion of

convertible notes payable into common stock

Stock-based compensation:

Amortization of restricted common stock

Balance - March 31, 2018

$ (20,235,812 )

$ (2,437,191 )

$ (2,514,376 )

Issuance of restricted

Shares issued

for common stock

Beneficial conversion

feature - Convertible Notes

Beneficial conversion

feature - Convertible Note to Former Parent

Warrants issued

in connection with common stock and convertible debt

Warrants issued

and recorded as debt discount in connection with notes payable

Conversion of

convertible note payable to Former Parent into common stock

Stock-based compensation:

Amortization of restricted common stock

Sale of interest

Balance –

June 30, 2018

$ (22,183,834 )

$ (3,228,953 )

Restricted stock

issued as compensation for services

Beneficial conversion

feature - Convertible Notes

Warrants issued

in connection with common stock and convertible debt

Stock-based compensation

Amortization of restricted common stock

Balance –September 30, 2018

$ (23,328,391 )

$ (3,802,344 )

Warrants issued

in connection with common stock and convertible debt

Beneficial conversion

feature - Convertible Notes

Conversion of

convertible notes payable into common stock

Cumulative effect of change in accounting principle

Issuance of restricted stock

Restricted stock issued as compensation for services

Beneficial conversion feature - Convertible Notes

Warrants issued and recorded as debt discount in connection with convertible

notes payable

Common stock issued in exchange for interest earned on other notes payable

Common stock issued in exchange for interest earned on convertible notes

Common stock issued as compensation to board of directors

Common stock issued as compensation for services

Conversion of convertible notes payable into common stock

Warrant modification

Stock-based compensation

Amortization of restricted common stock

Balance –December 31, 2018

(28,385,044 )

Balance - December 31, 2019

$ -53,094,602

2 unchanged sentences

STATEMENTS OF CASH FLOWS

For the Twelve Months Ended

Cash Flows from Operating Activities

the Years Ended

Cash Flows from Operating

$ (10,099,105 )

$ (28,385,044 )

Adjustments to reconcile net loss to net cash used in operating

Depreciation and amortization

Accretion of interest expense

Interest expense related to issuances of warrants

Adjustments to reconcile

net loss to net cash used in operating activities:

Depreciation and

Stock-based compensation

Inducement expense related to convertible notes

Warrant modification expense

Loss on sale of CTI

Amortization of debt discounts

Inducement expense

related to convertible notes

Warrant modification

Impairment of intangible

Amortization of debt

Change in fair value

of compensation

Write off of property

and equipment

Bad debt expense

Deferred rent

Expenses paid by Former Parent

Changes in operating assets and liabilities:

Changes in operating

assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Security deposits and other assets

Accounts payable and accrued expenses

Prepaid expenses

and other current assets

Security deposits

and other assets

Accounts payable

and accrued expenses

Deferred revenue

Other current liabilities

Total Adjustments

Net Cash Used in Operating Activities

Cash Flows from Investing Activities

Purchases of property and equipment

Issuance of loans receivable

Cash paid in connection with the acquisition of Midtown

Cash paid in connection with the acquisition of Bronx

Collections from loans receivable

Collections from loans receivable - related party

Net Cash Used in Investing Activities

Cash Flows from Financing Activities

Proceeds from issuance of restricted stock

Proceeds from offering, net of underwriter’s discount

and offering costs

Repayments to Former Parent, net

Repayments of convertible note payable

Proceeds from other notes payable - related party

Proceeds from convertible notes payable

Proceeds from convertible notes payable - related parties

Repayments of convertible notes payable - related party

Repayments of other notes payable - related parties

Repayments of other notes payables

Proceeds from other notes payable

Net Cash Provided by Financing Activities

current liabilities

Cash Used in Operating Activities

Cash Flows from Investing

Purchases of property

and equipment

Issuance of loans

Cash paid in connection

with the acquisition of Midtown

Cash paid in connection

with the acquisition of Bronx

Cash paid in connection

with the acquisition of Philadelphia

Collections from

loans receivable

from loans receivable - related party

Cash Used in Investing Activities

Cash Flows from Financing

Proceeds from offerings,

net of underwriter’s discount and

offering costs of $1,580,000

Proceeds from over-allotment,

net of underwriter’s discount and offering costs of $75,600

Proceeds from PPP

Repayments of convertible

Proceeds from other

notes payable - related party

Proceeds from convertible

notes payable

Proceeds from convertible

notes payable - related parties

Repayments of convertible

notes payable - related party

Repayments of other

notes payable - related parties

Repayments of other

notes payables

from other notes payable

Cash Provided by Financing Activities

Net Increase in Cash

4 unchanged sentences

STATEMENTS OF CASH FLOWS –

For the Twelve Months Ended

Supplemental Disclosures of Cash Flow Information:

Cash paid for interest

Supplemental disclosures of non-cash investing and financing activities

Beneficial conversion feature

Warrants issued in connection with convertible debt

Conversion of convertible notes

payable to Former Parent into common stock

Conversion of notes payable into common stock

Other note payable exchanged for convertible note

Warrants issued and recorded as

debt discount in connection with notes payable

Convertible Note issued to Former

Parent in exchange for payable to Former Parent

Common stock issued in exchange

for interest earned on convertible notes payable

the Years Ended

Supplemental Disclosures

of Cash Flow Information:

paid for interest

Supplemental disclosures

of non-cash investing and financing activities

conversion feature

issued in connection with convertible debt

stock issued in exchange for interest earned on convertible notes payable

of restricted stock

Common stock issued in exchange

for interest earned on other notes payable

Conversion of convertible notes

payable into common stock

stock issued in exchange for interest earned on other notes payable

stock issued in exchange for accrued interest

of Chelsea NY –

loans receivables settled as consideration for the acquisition of Chelsea

& SUBSIDIARIES

1 unchanged sentence

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS, GOING CONCERN AND MANAGEMENT’S PLANS

(“MMI”), a former subsidiary of American Restaurant Holdings (“ARH”

or “Former Parent”)

was incorporated in California on December 8, 2014 and was a majority owner of Muscle Maker Brands, LLC, (“MMB”).

MMB’s subsidiaries included Company owned restaurants as well as Custom Technology, Inc., (“CTI”) a technology

and point of sale (“POS”) systems dealer and technology consultant.

MMB was formed on December 22, 2014 in the State

of California for the purpose of acquiring and operating company owned restaurants, as well as franchising its name and business

system to qualified franchisees.

Muscle Maker Franchising, LLC (“MMF”) was founded in 1995 in order to develop a brand

of healthy-option fast food restaurants.

January 23, 2015 (the “Closing Date”), MMI, MMB and MMF entered into an agreement whereby MMB purchased substantially

all of the assets and liabilities of MMF, MMI acquired 74% of the membership units of MMB, and certain members of MMF acquired

26% of the membership units of MMB.

March 23, 2017, ARH authorized and facilitated the distribution of 790,901 shares of Common Stock of MMI held by American Restaurants,

LLC, the wholly owned subsidiary of ARH, to the shareholders of the Former Parent (the “Spin-Off”).

As a result of

the Spin-Off on March 23, 2017, ARH is no longer a majority owner of MMI.

June 8, 2017, MMB converted from a limited liability company into a California corporation named Muscle Maker Brands Conversion,

(“MMBC”).

July 18, 2017, MMI formed Muscle Maker Development, LLC (“Muscle Maker Development”) in the State of Nevada for the

purpose of running our existing franchise operations and continuing to franchise the Muscle Maker Grill name and business system

to qualified franchisees.

Muscle Maker Development issued 1,000 membership units to its sole member and manager, MMI.

all the existing franchise agreements to Muscle Maker Development (“Assignment and Assumption Agreement”) pursuant

to the terms of that certain Assignment and Assumption Agreement, dated August 25, 2017, among MMI, MMB and Muscle Maker Development.

July 18, 2017, MMI formed Muscle Maker Corp., LLC (“Muscle Maker Corp.”) in the State of Nevada for the purpose of

developing new corporate stores and operating new and existing corporate stores of MMI.

Muscle Maker Corp.

issued 1,000 membership

units to its sole member and manager, MMI and MMI assigned all the existing corporate stores to Muscle Maker Corp.

September 15, 2017 (“Effective Merger Date”), pursuant to an Agreement of Merger, MMBC was merged (“Merger”)

into MMI, with MMI as the surviving corporation, in a tax-free reorganization.

Pursuant to the Merger, each share of common stock

of MMBC (the “MMBC Common Stock”) owned by the members of MMF was converted into 113 shares of common stock of MMI,

resulting in aggregate consideration of 221,567 shares of common stock of MMI to the members of MMF.

As a result of the Merger,

MMI directly owned 70% of the shares of CTI.

May 24, 2018, the Company entered into a stock purchase agreement among John Guild, JohnG Solutions LLC and CTI in which the Company

agreed to sell its 70% ownership in CTI for a total purchase price of $1.00.

(“MMI”), a Nevada corporation was incorporated in Nevada on October 25, 2019.

MMI was a wholly owned subsidiary

of Muscle Maker, Inc (“MMI-Cal”), a California corporation incorporated on December 8, 2014, but the two merged on

November 13, 2019 with MMI as the surviving entity.

MMI wholly owns Muscle Maker Development, LLC (“MMD”), Muscle

Maker Corp, LLC (“MMC”) and Muscle Maker USA, Inc (“Muscle USA”).

MMD was formed on July 18, 2017, in

the State of Nevada for the purpose of running our existing franchise operations and continuing to franchise the Muscle Maker

Grill name and business system to qualified franchisees.

MMC was formed on July 18, 2017, in the State of Nevada for the purpose

of developing new corporate stores and operating new and existing corporate stores of MMI.

Muscle USA was formed on March 14,

2019 in the State of Texas for the purpose of opening additional new corporate stores.

Muscle Maker Development International.

LLC, a directly wholly owned subsidiary, which was formed in Nevada on November 13, 2020 to franchise the Muscle Maker Grill name

and business system to qualified franchisees internationally.

is a fast-casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based

meals featuring chicken, seafood, pasta, hamburgers, wraps and flat breads.

In addition, our restaurants feature freshly prepared

entrée salads and an appealing selection of sides, protein shakes and fruit smoothies.

MMI operates in the fast-casual

restaurant segment.

is the owner of the trade name and service mark Muscle Maker Grill®, Healthy Joe’s and other trademarks and intellectual

property we use in connection with the operation of Muscle Maker Grill®

We license the right to use the Muscle

Maker Grill®

and Healthy Joe’s trademarks and intellectual property to our wholly-owned subsidiaries, MMD, MMC and Muscle

USA, and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill®

and Healthy Joe’s

and its subsidiaries are hereinafter referred to as the “Company”.

Company operates under the name Muscle Maker Grill and is a franchisor and owner operator of Muscle Maker Grill and Healthy Joe’s

As of December 31, 2020, the Company’s restaurant system included sixteen company-owned restaurants, and sixteen

franchise restaurants.

In addition, the Company built four new locations on university campuses but due to Covid-19 restrictions

have not yet opened these locations but incurred expenses during the twelve months ended December 31, 2020.

Four of the company-owned

restaurants are delivery-only locations.

A Muscle Maker Grill restaurant offers quality food freshly prepared with the Company’s

proprietary recipes created with the guest’s health in mind.

The menu is protein based, and features various supplements,

health food snacks, along with a nutritious children’s menu and meal plans.

March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues

to spread throughout the United States.

In response to the COVID-19 outbreak, “shelter in place”

orders and other

public health measures have been implemented across much of the United States.

COVID-19 global pandemic continues to rapidly evolve.

The Company is continually monitoring the outbreak of COVID-19 and the related

business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial

position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition

to the impact on its employees.

The pandemic has resulted in a negative impact on the Company’s operations during the year

ended December 31, 2020.

However, due to the rapid development and fluidity of this situation, the magnitude and duration of the

pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report.

could ultimately be an additional material impact on operations and liquidity of the Company, the full impact could not be determined,

as of the date of this report.

a result of the pandemic the Company has limited its operations through limiting hours of operations, reduced its capacity and

utilized a delivery only concept as mandated by each state and has temporarily closed five of our Company owned locations during

the second quarter of 2020.

In addition, the Company opened two new locations at the end of the third quarter on university campuses

that were subsequently temporarily closed due to the impact of COVID-19 on students returning to campuses.

As of the date of the

filing of this report the Company re-opened five of the seven temporarily closed locations and permanently closed two underperforming

Commencing in the second quarter of 2020 the Company provided royalty relief to its franchisee locations

by deferring half of their royalties earned by the Company through July 2020.

The Company has not attempted to collect

the deferred royalties as of the date of the filing of this report as we provide time for franchise location to fully recover

to pre-pandemic conditions.

The executive team deferred a portion of their salaries in 2020 and some members continue to

defer salary as of the date of the filing of this report.

In addition, various franchisee locations had to take similar actions

by temporarily closing their locations and limiting their operations as mandated by each state.

As of the date of the filing of

this report seven of the franchise locations have permanently closed.

& SUBSIDIARIES

1 unchanged sentence

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS, GOING CONCERN AND MANAGEMENT’S PLANS, Continued

March 14, 2019, MMI formed a wholly owned subsidiary, Muscle Maker USA, Inc.

(“Muscle USA.”), in the State of Texas.

November 2019, MMI formed Muscle Maker Inc., LLC (“MMI NV.”) in the state of Nevada.

Pursuant to the Articles of Incorporation

filed in the state of Nevada, MMI NV has authorized capital stock consisting of 14,285,714 shares of common stock, with a $0.0001

par value per share.

November 13, 2019, Muscle Maker, Inc., a California corporation, merged with and into its wholly owned subsidiary, Muscle Maker,

Inc., a Nevada corporation, pursuant to an Agreement and Plan of Merger between Muscle Maker, Inc., a California corporation,

and Muscle Maker, Inc., a Nevada corporation.

Muscle Maker, Inc., a Nevada corporation, continued as the surviving entity of the

migratory merger.

Pursuant to the migratory merger, the Company changed its state of incorporation from California to Nevada and

each share of its common stock converted into one share of common stock of the surviving entity in the migratory merger.

No dissenters’

rights were exercised by any of the Company’s stockholders in connection with the migratory merger.

All share and per share

information has been retroactively adjusted to reflect merger with a $0.0001 par value per share.

and its subsidiaries is the “Company”.

Company operates under the name Muscle Maker Grill and is a franchisor and owner operator of Muscle Maker Grill restaurants.

of December 31, 2019, the Company’s restaurant system included ten company-owned restaurants, and twenty-eight franchise

A Muscle Maker Grill restaurant offers quality food freshly prepared with the Company’s proprietary recipes

created with the guest’s health in mind.

The menu is protein based, and features various supplements, health food snacks,

along with a nutritious children’s menu.

Concern and Management’s Plans

As of December 31, 2019, the Company had a

cash balance, a working capital deficiency and an accumulated deficit of $478,854, $3,707,541, and $53,094,602,

of December 31, 2020, the Company had a cash balance, a working capital surplus and an accumulated deficit of $4,195,932, $1,383,568, and $63,193,707,

respectively.

For the year ended December 31, 2019, the Company incurred a pre-tax net loss of $28,385,044.

These conditions

indicate that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year

from the date of the issuance of these consolidated financial statements.

Subsequent to December 31, 2019, the Company

received an aggregate of $6,930,000 consisting of a $150,000 another note payable to a lender and $6,780,000, net of underwriters

and other fees of $920,000, upon closing of the initial public offering.

(See Note 17 –

Subsequent Events

- Closing of Offering and Other Note Payable).

& SUBSIDIARIES

to Consolidated Financial Statements

BUSINESS ORGANIZATION AND NATURE OF OPERATIONS, GOING CONCERN AND MANAGEMENT’S PLANS, Continued

Concern and Management’s Plans, continued

management believes that the Company has access to capital resources, there are no commitments, other than aforementioned, in

place for new financing as of the date of the issuance of these consolidated financial statements and there can be no assurance

that the Company will be able to obtain funds on commercially acceptable terms, if at all.

The Company expects to have ongoing

needs for working capital in order to (a) fund operations;

During the year ended December 31, 2020, the Company incurred a pre-tax net loss of $10,099,105 and net cash used in operations of $7,785,873.

conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern for at

least one year from the date of the issuance of these consolidated financial statements.

management believes that the Company has access to capital resources, there are no commitments in place for new financing as of

the date of the issuance of these consolidated financial statements and there can be no assurance that the Company will be able

to obtain funds on commercially acceptable terms, if at all.

The Company expects to have ongoing needs for working capital in

order to (a) fund operations;

plus (b) expand operations by opening additional corporate-owned restaurants.

To that end, the Company may be required to raise additional funds through equity or debt financing.

However, there can be no

assurance that the Company will be successful in securing additional capital.

If the Company is unsuccessful, the Company may

need to (a) initiate cost reductions;

To that end, the Company

may be required to raise additional funds through equity or debt financing.

However, there can be no assurance that the Company

will be successful in securing additional capital.

If the Company is unsuccessful, the Company may need to (a) initiate cost reductions;

(b) forego business development opportunities;

or (d) seek protection from creditors.

accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted

6 unchanged sentences

REVERSE STOCK SPLITS

January 31, 2018, pursuant to authority granted by the stockholders of the Company, the Company implemented a 3-for-4 reverse

split of the Company’s issued common stock (the “Second Reverse Split”).

All share and per share information

has been retroactively adjusted to reflect the Second Reverse Split for all periods presented.

December 11, 2019, pursuant to authority granted by the stockholders of the Company, the Company implemented a 1-for-7 reverse

2 unchanged sentences

has been retroactively adjusted to reflect the Third Reverse Split for all periods presented.

& SUBSIDIARIES

to Consolidated Financial Statements

SIGNIFICANT ACCOUNTING POLICIES

14 unchanged sentences

Significant estimates include:

fair value of assets acquired, and liabilities assumed in a business combination;

assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;

estimated useful lives of intangible and depreciable assets;

and assumptions used to value warrants issued in connection with notes payable;

and assumptions used to value warrants and options;

recognition of revenue;

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of December 31, 2020 and December 31, 2019, the Company did not have any derivative liabilities on its balance sheets.

During the first quarter 2019, the Company

adopted Topic 606 “Revenue from Contracts with Customers”

for revenue recognition related to contracts with customers

and applied the guidance modified retrospectively.

Under the new guidance, revenue is recognized in accordance with a five-step

revenue model, as follows:

the first quarter of 2019, the Company adopted Topic 606 “Revenue from Contracts with Customers”

for revenue recognition

related to contracts with customers and applied the guidance modified retrospectively.

Under the new guidance, revenue is recognized

in accordance with a five-step revenue model, as follows:

(1) identifying the contract with the customer;

(2) identifying the performance obligations in the

(2) identifying the

performance obligations in the contract;

(3) determining the transaction price;

(4) allocating the transaction price to the performance obligations;

recognizing revenue when (or as) the entity satisfies a performance obligation.

In applying this five-step model, we have made

significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which

represent separate performance obligations.

The change between Topic 605 and Topic 606, primarily impacted the way the Company

recognized franchise fees.

Under Topic 605 franchise fees were recognized upon opening of a restaurant or granting of a new franchise

term at a point in time while under Topic 606 franchise fees are recognized on a straight-line basis over the life of the

related franchise agreements and any exercised renewal periods.

The impact of the adoption of Topic 606 resulted in an adjustment

of $875,902 in retained earnings and deferred revenues.

The Company originally book an adjustment of $568,540 in the first

quarter of 2019 pursuant to the new standard and revised this adjustment during the fourth quarter of 2019 by $307,362 as the

Company identified additional deferred revenue expensed that impacted the opening retained earnings adjustment.

The $307,362 adjustment

impacted the consolidated balance sheet only and had no impact on the consolidated statement of operations.

(4) allocating the transaction price to the performance

and (5) recognizing revenue when (or as) the entity satisfies a performance obligation.

In applying this five-step

model, we have made significant judgments in identifying the promised goods or services in our contracts with franchisees that

are distinct, and which represent separate performance obligations.

The change between Topic 605 and Topic 606, primarily impacted

the way the Company recognized franchise fees.

Under Topic 605 franchise fees were recognized upon opening of a restaurant or

granting of a new franchise term at a point in time while under Topic 606 franchise fees are recognized on a straight-line basis

over the life of the related franchise agreements and any exercised renewal periods.

The impact of the adoption of Topic 606 resulted

in an adjustment of $875,902 in accumulated deficit and deferred revenues as of January 1, 2019.

on Financial Statements

following table summarized the impact of the adoption of the new revenue standard on the Company’s previously reported consolidated

financial statements:

Revenue Standard Adjustment

Deferred revenues

Accumulated deficit

store revenue at Company operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, discount

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Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card

The Company recognize revenues from gift cards as restaurant revenues once the Company performs obligation to

provide food and beverage to the customer simultaneously with the redemption of the gift card or through gift card breakage, as

discussed in Other Revenue below.

The Company recognizes revenues from gift cards as restaurant revenues once the Company performs its obligation to provide

food and beverage to the customer simultaneously with the redemption of the gift card or through gift card breakage, as discussed

in Other Revenues below.

Royalties and Fees

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which the related food and beverage purchases are made.

its subsidiary CTI which was sold in May 2018, the Company derived revenue from the sale of POS computer systems, cash registers

and camera systems, and from the provision of related consulting and support services, which generally include implementation,

installation and training services.

The Company recognized revenue when persuasive evidence of an arrangement existed, delivery

of the product or service has occurred, the fee was fixed or determinable and collectability was reasonably assured.

recorded $0 and $244,633, respectively, of revenues from these technology sales and services during the years ended December 31,

2019 and 2018, respectively.

card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines

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card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption.

For the year ended December 31, 2019, the Company determine that no gift card breakage is necessary based on current redemption

Gift card liability is recorded in other current liabilities on the consolidated balance sheet.

For the years ended December 31,

2020 and 2019, the Company determined that no gift card breakage is necessary based on current redemption rates.

revenue primarily includes initial franchise fees received by the Company, which are being amortized over the life of the Company’s

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the corresponding advertising expense.

The Company records the related advertising expenses as incurred under general and

administrative expenses.

When an advertising contribution fund is over-spent at year end, advertising expenses will be reported

on the consolidated statement of operations in an amount that is greater than the revenue recorded for advertising contributions.

Conversely, when an advertising contribution fund is under-spent at a period end, the Company will accrue advertising costs up

to advertising contributions recorded in revenue.

The Company recorded contributions from franchisees of $139,508 and $0, respectively,

during the years ended December 31, 2019 and 2018, which are included in franchise advertising fund contributions on the

accompanying consolidated statements of operations.

on Financial Statements

following table summarized the impact of the adoption of the new revenue standard on the Company’s previously reported consolidated

financial statements:

Revenue Standard Adjustment

Company revised the new revenue standard adjustment during the fourth quarter of 2019 by $307,362 as the Company identified additional

deferred revenue that needed to be recognized that impacted the retained earnings adjustments.

The $307,362 adjustment

impacted the consolidated balance sheet only and had no impact on the consolidated statement of operations.

The Company records the related advertising expenses as incurred under general and administrative

When an advertising contribution fund is over-spent at year end, advertising expenses will be reported on the consolidated

statement of operations in an amount that is greater than the revenue recorded for advertising contributions.

Conversely, when

an advertising contribution fund is under-spent at a period end, the Company will accrue advertising costs up to advertising contributions

recorded in revenue.

The Company recorded contributions from franchisees of $61,053 and $139,508, respectively, during the years

ended December 31, 2020 and 2019, which are included in franchise advertising fund contributions on the accompanying consolidated

statements of operations.

costs are charged to expense as incurred.

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by the weighted average number of common shares outstanding, plus the impact of potential common shares, if dilutive, resulting

from the exercise of warrants.

from the exercise of warrants, options or the conversion of convertible notes payable.

& SUBSIDIARIES

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respectively, because their inclusion would have been anti-dilutive:

Convertible debt

potentially dilutive shares

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largest supplier totaled 87% and 83% of the Company’s purchases for the years ended December 31, 2020 and 2019, respectively.

and Non-Controlling Interest

profits and losses of CTI were allocated among the controlling interest and the CTI non-controlling interest in the same proportions

as their membership interests from January 1, 2018 through May 24, 2018.

Value of Financial Instruments

Company measures the fair value of financial assets and liabilities based on the guidance of the Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”

(“ASC 820”).

820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price)

in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants

on the measurement date.

ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable

inputs and minimize the use of unobservable inputs when measuring fair value.

ASC 820 describes three levels of inputs that may

be used to measure fair value:

quoted prices in active markets for identical assets or liabilities

quoted prices for similar assets and liabilities in active markets or inputs that are observable

inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

carrying amounts of accrued liabilities approximate fair value due to the short-term nature of these instruments.

amounts of our short–term credit obligations approximate fair value because the effective yields on these obligations, which

include contractual interest rates, taken together with other features such as concurrent issuance of common stock and warrants,

are comparable to rates of returns for instruments of similar credit risk.

Note 15 –

Equity –

Warrant and Options Valuation for details related to accrued compensation liability being fair

valued using Level 1 inputs.

Company accounts for income taxes under Accounting Standards Codification (“ASC”) 740 Income Taxes (“ASC 740”).

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SIGNIFICANT ACCOUNTING POLICIES, continued

Taxes, continued

benefits claimed or expected to be claimed on a tax return are recorded in the Company’s financial statements.

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Accounting Pronouncements, continued

July 2017, the FASB issued ASU No.

2017-11, “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic

480) Derivatives and Hedging (Topic 815),”

which addresses the complexity of accounting for certain financial instruments

with down round features.

Down round features are features of certain equity-linked instruments (or embedded features) that result

in the strike price being reduced on the basis of the pricing of future equity offerings.

Current accounting guidance creates

cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round

features that require fair value measurement of the entire instrument or conversion option.

The amendments in this ASU are effective

for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and interim

periods within those fiscal years.

Early adoption is permitted.

The guidance can be applied using a full or modified retrospective

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements

and related disclosures.

June 2018, the FASB issued ASU No.

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July 2018, the FASB issued ASU No.

2018-09, “Codification Improvements”

(“ASU 2018-09”).

These amendments

provide clarifications and corrections to certain ASC subtopics including the following:

Income Statement - Reporting Comprehensive

Income –

Overall (Topic 220-10), Debt - Modifications and Extinguishments (Topic 470-50), Distinguishing Liabilities from

Equity –

Overall (Topic 480-10), Compensation - Stock Compensation - Income Taxes (Topic 718-740), Business Combinations

- Income Taxes (Topic 805-740), Derivatives and Hedging –

Overall (Topic 815-10), and Fair Value Measurement –

(Topic 820-10).

The majority of the amendments in ASU 2018-09 will be effective in annual periods beginning after December 15,

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and

related disclosures.

& SUBSIDIARIES

to Consolidated Financial Statements

SIGNIFICANT ACCOUNTING POLICIES, continued

Accounting Pronouncements, continued

July 2018, the FASB issued ASU No.

2018-10, “Codification Improvements to Topic 842, Leases”

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and annual reporting periods beginning after December 15, 2021, with early adoption permitted.

The guidance is required to be

applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the

earliest comparative periods presented in the financial statements.

The Company is currently assessing the impact this guidance

will have on its consolidated financial statements.

The guidance is required

to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning

of the earliest comparative periods presented in the financial statements.

The Company is currently assessing the impact this

guidance will have on its consolidated financial statements.

July 2018, the FASB issued ASU No.

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Early adoption is permitted.

The Company is currently evaluating ASU 2019-01 and its impact on its unaudited consolidated

financial statements and financial statement disclosures.

& SUBSIDIARIES

to Consolidated Financial Statements

SIGNIFICANT ACCOUNTING POLICIES, continued

Accounting Pronouncements, continued

July 2019, the FASB issued ASU 2019-07, “Codification Updates to SEC Sections —

Amendments to SEC Paragraphs Pursuant

to SEC Final Rule Releases No.

33-10532, Disclosure Update and Simplification, and Nos.

33-10231 and 33-10442, Investment Company

Reporting Modernization and Miscellaneous Updates (SEC Update)”

(“ASU 2019-07”).

ASU 2019-07 aligns the guidance

in various SEC sections of the Codification with the requirements of certain SEC final rules.

ASU 2019-07 is effective immediately.

The adoption of ASU 2019-07 did not have a material impact on the Company’s unaudited consolidated financial statements.

The Company is currently evaluating ASU 2019-01 and its impact on its consolidated financial

statements and financial statement disclosures.

Company evaluated events that have occurred after the balance sheet date but before the financial statements are issued.

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Subsequent Events.

& SUBSIDIARIES

to Consolidated Financial Statements

August 22, 2019, the Company acquired a franchisee store in Midtown, New York, as a corporate store (the “Midtown Acquisition”).

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from this location of approximately $299,000 in company restaurant sales, net of discounts on the consolidated statement of operations.

The unaudited pro-forma financial information in the table below

summarizes the combined results of operations of the Company and the Midtown franchisee store as though the acquisition had occurred

as of January 1, 2018.

The pro forma financial information as presented below is for informational purposes only and is not necessarily

indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the

earliest period presented, nor does it intend to be a projection of future results.

For the Year Ended

unaudited pro-forma financial information in the table below summarizes the consolidated results of operations of the Company

and the Midtown franchisee store as though the acquisition had occurred as of January 1, 2019.

The pro forma financial information

as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would

have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to

be a projection of future results.

the Year Ended

Restaurant operating expenses

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$300,000 is payable pursuant to a five-year promissory note with an eight percent interest rate.

During the year ended

December 31, 2019, the Company recorded sales revenues from this location of approximately $223,000 in company restaurant sales,

net of discounts on the consolidated statement of operations.

The unaudited pro-forma financial information in the table below

summarizes the combined results of operations of the Company and the Bronx franchisee store as though the acquisition had occurred

as of January 1, 2018.

The pro forma financial information as presented below is for informational purposes only and is not necessarily

indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the

earliest period presented, nor does it intend to be a projection of future results.

For the Year Ended

During the year ended December

31, 2019, the Company recorded sales revenues from this location of approximately $223,000 in company restaurant sales, net of

discounts on the consolidated statement of operations.

unaudited pro-forma financial information in the table below summarizes the consolidated results of operations of the Company

and the Bronx franchisee store as though the acquisition had occurred as of January 1, 2019.

The pro forma financial information

as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would

have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to

be a projection of future results.

the Year Ended

Restaurant operating expenses

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ACQUISITIONS, continued

May 24, 2018, the Company entered into a stock purchase agreement between John Guild, JohnG Solutions LLC and CTI in which the

Company agreed to sell their 70% ownership in CTI for a total purchase price of $1.00.

During the year ended December 31, 2018,

the Company recorded a loss of $456,169 related to the sale of CTI, as follows:

Accounts receivable, net

Accounts receivable from CTI

Property and equipment, net

Intangible assets, net

Loans receivable from related party, net

Security deposits and other assets

Accounts payable and accrued expenses

Deferred revenue

Net fair value of assets and liabilities sold

Accumulated deficit

Non-controlling interest

Loss on sale of CTI

October 19, 2020, the Company acquired a franchisee store in Chelsea, New York, as a corporate store (the “Chelsea Acquisition”).

The purchase price of the store was $68,292, of which $34,146 related to equipment purchased and the remaining $34,146 was attributed

to leasehold improvements.

The Company agreed to forgive a promissory note in the amount of $68,292 that was owed from the franchisee

in exchange for the purchase of the location.

In addition, the Company became obligated for payments pursuant to a five-year lease,

exclusive of options to renew.

Monthly rent payments pursuant to this lease agreement range from $11,000 to $16,105 with a straight

line rent expense of $13,431 per month.

unaudited pro-forma financial information in the table below summarizes the consolidated results of operations of the Company

and the Chelsea franchisee store as though the acquisition had occurred as of January 1, 2019.

The pro forma financial information

as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would

have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to

be a projection of future results.

the Years Ended

Restaurant operating expenses

Total cost and expenses

Loss from Operations

November 2, 2020, the Company acquired a franchisee store in Philadelphia, Pennsylvania, as a corporate store (the “Philadelphia

Acquisition”).

The purchase price of the store was $250,000, of which $125,000 related to equipment purchased and the remaining

$125,000 relates to leasehold improvements.

The Company paid cash of $75,000 to the seller on the closing date and agreed to a

$175,000 7% promissory note over the next sixty months with the first payment being due and payable on December 2, 2020.

of the acquisition the Company agreed to a lease assignment and assumed the remaining commitment under the lease upon the closing

unaudited pro-forma financial information in the table below summarizes the combined results of operations of the Company and

the Philadelphia franchisee store as though the acquisition had occurred as of January 1, 2019.

The pro forma financial information

as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would

have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to

be a projection of future results.

the Years Ended

Restaurant operating expenses

Total cost and expenses

Loss from Operations

& SUBSIDIARIES

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current portion

Loans receivable, non-current

receivable, non-current

August 2019, the company advanced money to a former franchisee and issued a loan receivable in the amount of $60,186.

is payable in 120 monthly payments consisting of principal and interest of 12%, with the payments commencing as of December 1,

receivable includes loans to franchisees totaling, in the aggregate, $137,389 and $112,911, net of reserves for uncollectible

loans of $55,000 at December 31, 2019 and December 31, 2018.

The loans have original terms ranging up to 10 years, earn interest

at rates ranging from 2% to 12%, and are being repaid on a weekly or monthly basis.

LOANS RECEIVABLE FROM RELATED PARTIES

December 31, 2019 and 2018, the Company’s loans receivable from related parties consist of the following:

December 31, 2019

December 31, 2018

Loans receivable from related party, net

current portion

Loans receivable from related party, non-current

receivable includes loans to franchisees totaling, in the aggregate, $3,390 and $137,389, net of reserves for uncollectible loans

of $106,900 and $55,000 at December 31, 2020 and December 31, 2019.

The loans have original terms ranging up to 10 years,

earn interest at rates ranging from 2% to 12%, and are being repaid on a weekly or monthly basis.

PROPERTY AND EQUIPMENT, NET

of December 31, 2020, and 2019, property and equipment consist of the following:

December 31, 2019

December 31, 2018

Furniture and equipment

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accumulated depreciation and amortization

Property and equipment, net

and equipment, net

expense amounted to $362,009 and $134,712 for the years ended December 31, 2020 and 2019, respectively.

During the year ended

December 31, 2020, the Company wrote off property and equipment with an original cost value of $151,111 related to a closed location

and a future location that was terminated due to the economic environment as a result of COVID-19 and recorded a loss on disposal

of $41,480 after accumulated depreciation of $109,631 in the consolidated statement of operations.

& SUBSIDIARIES

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Company’s intangible assets include a trademark with an indefinite useful life as well as franchise agreements which are

amortized over useful lives of thirteen years and five years, respectively.

amortized over useful lives of thirteen years.

summary of the intangible assets is presented below:

Intangible Assets

Franchise Agreements

Non-Compete Agreement

Intangible assets, net at December 31, 2017

assets, net at December 31, 2018

Amortization expense

Impairment of intangible assets

Intangible assets, net at December 31, 2018

Intangible assets,

net at December 31, 2019

Amortization expense

Intangible assets, net at December 31, 2019

Weighted average remaining amortization period at December 31, 2019 (in years)

Impairment of intangible

Intangible assets,

net at December 31, 2020

Weighted average remaining amortization period

at December 31, 2020 (in years)

expense related to intangible assets was $60,537 and $63,806 for the years ended December 31, 2020 and 2019, respectively.

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Intangible Assets.

As of December 31, 2019 and 2018, the Company performed a recoverability test on the franchise agreements that

passed the test based on its projected future undiscounted cash flows generated through the asset’s use and eventual disposal

and no further action was required.

The Company performed a recoverability test on the franchise agreements based on its projected future undiscounted

As a result of a failed recoverability test the Company proceeded to measure the fair value of those assets based on

the future discounted cash flows and recorded an impairment charge in the amount of $100,000 during the year ended December 31,

The key assumptions used in the estimates of projected cash flows utilized in both the test and measurement steps of the

impairment analysis were projected revenues and royalty payments.

These forecasts were based on actual revenues and take into

account recent developments as well as the Company’s plans and intentions.

estimated future amortization expense is as follows:

the Year Ended December 31,

Franchise Agreements

of December 31, 2020 and 2019, the Company performed the annual assessment for goodwill and determined that there was no

impairment of Goodwill.

& SUBSIDIARIES

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payables and accrued expenses consist of the following:

December 31, 2019

December 31, 2018

Accounts payable

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Accrued interest, related parties

Other accrued expenses

Other accrued

Note 14 –

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of the Company’s common stock.

of December 31, 2019, the Company had an aggregate gross amount of $82,458 in convertible notes payable to Former Parent outstanding,

net of debt discount of in the amount of $0, and a net balance of $82,458.

As of December 31, 2018, the Company had an aggregate

gross amount of $82,458 in convertible notes payable to Former Parent outstanding, net of debt discount in the amount of 43,178,

and a net balance of $39,280.

accordance with ASC 470-20 “Debt with Conversion and other Options”, the intrinsic value related to the convertible

notes results in a beneficial conversion feature which is recorded as a debt discount with a corresponding credit to additional

paid in capital.

As of December 31, 2019, the Company has an aggregate debt discount of $0, net of amortization expenses, related

to the beneficial conversion feature on the convertible note payable to Former Parent and as of December 31, 2018 the Company

has an aggregate debt discount of $10,883, net of amortization expenses related to the beneficial conversion feature on the convertible

note payable to Former Parent.

For the year ended December 31, 2019 the Company recorded aggregate debt discounts of $0 related

to the beneficial conversion feature on the convertible note payable to Former Parent and for the year ended December 31, 2018

the Company recorded aggregate debt discounts of $475,000 related to the beneficial conversion feature on the convertible notes

payable to the Former Parent, which were amortized over the expected terms of the note.

Company had an aggregate gross amount of $82,458, as of December 31, 2020 and 2019, respectively, in convertible notes payable

to Former Parent outstanding.

& SUBSIDIARIES

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in other notes payable that were converted into 15% Notes.

The Notes bear interest at 15% per annum paid quarterly and

mature 18 months from issuance.

In addition to the 15% Notes, the Investors also received 154,643 five year warrants to purchase

common stock of the Company (the “Warrants”) that entitles the holder to purchase a number of shares equal to 50%

of the conversion shares of common stock of the Company at an exercise price of $8.40.

The Notes bear interest at 15% per annum paid quarterly and mature

18 months from issuance.

In addition to the 15% Notes, the Investors also received 154,643 five year warrants to purchase common

stock of the Company (the “Warrants”) that entitles the holder to purchase a number of shares equal to 50% of the

conversion shares of common stock of the Company at an exercise price of $8.40.

January 1, 2019 through May 24, 2019, the Company entered into SPAs with several accredited Investors providing for the sale by

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stock of the Company at an exercise price of $8.40.

The Investors may elect to convert all or

part of the 15% Notes, plus accrued interest, at any time into shares of common stock of the Company at a conversion price of

$7.00 (the “Fixed Conversion Price”);

provided, however, in the event the per share price of a public offering multiplied

by twenty-five percent (25%), as amended on April 10, 2019, at the time of the listing of the shares of common stock

on an exchange (the “Listing Event”) is less than $7.00 (the “Discounted Public Offering Price”) then

the conversion price shall be reset to equal the Discounted Public Offering Price.

In the event the Investors are required to

execute a Lock Up Agreement concurrent with a public offering at the time of the Listing Event, then the Fixed Conversion Price

shall be $5.25 and the Discounted Public Offering Price shall be the public offering multiplied by forty five percent (17.50%),

as amended on April 10, 2019, at the time of the Listing Event.

Upon the occurrence of a Listing Event or the sale or license

of all or substantially all of the Company’s assets (a “Liquidity Event”), the entire unpaid and outstanding

principal amount and any accrued interest thereon under this Note shall automatically convert in whole without any further action

by the Holder.

The Investors to the 15% Notes, received

an aggregate of 366,997 warrants (“Original Warrants”) to purchase common stock of the Company (the “Warrants”)

that entitles the holder to purchase a number of shares equal to 50% of the conversion shares of common stock of the Company.

Investors may elect to convert all or part of the 15% Notes, plus accrued interest, at any time into shares of common stock of

the Company at a conversion price of $7.00 (the “Fixed Conversion Price”);

provided, however, in the event the per

share price of a public offering multiplied by twenty-five percent (25%), as amended on April 10, 2019, at the time of the listing

of the shares of common stock on an exchange (the “Listing Event”) is less than $7.00 (the “Discounted Public

Offering Price”) then the conversion price shall be reset to equal the Discounted Public Offering Price.

In the event the

Investors are required to execute a Lock Up Agreement concurrent with a public offering at the time of the Listing Event, then

the Fixed Conversion Price shall be $5.25 and the Discounted Public Offering Price shall be the public offering multiplied by

seventeen and a half percent (17.50%), as amended on April 10, 2019, at the time of the Listing Event.

Upon the occurrence

of a Listing Event or the sale or license of all or substantially all of the Company’s assets (a “Liquidity Event”),

the entire unpaid and outstanding principal amount and any accrued interest thereon under this Note shall automatically convert

in whole without any further action by the Holder.

Investors to the 15% Notes, received an aggregate of 366,997 warrants (“Original Warrants”) to purchase common stock

of the Company (the “Warrants”) that entitles the holder to purchase a number of shares equal to 50% of the conversion

shares of common stock of the Company.

The Warrants are exercisable for five years at an exercise price of $8.40.

In the event the conversion price is adjusted as contemplated

above, then the exercise price shall adjust to equal 120% of the adjusted conversion price.

The Investors may exercise the Warrants

on a cashless basis.

The Securities Purchase Agreements require

that until the Company’s stock is listed on a public exchange (“Listing Event”), a note holder holds

the right to designate one member and one observer to the board of directors of the Company and that the Company shall engage

an investor relations firm mutually agreed to by the Company and a note holder from the time of the Listing Event until

six months after the Listing Event.

the conversion price is adjusted as contemplated above, then the exercise price shall adjust to equal 120% of the adjusted conversion

The Investors may exercise the Warrants on a cashless basis.

Securities Purchase Agreements require that until the Company’s stock is listed on a public exchange (“Listing Event”),

a note holder holds the right to designate one member and one observer to the board of directors of the Company and that the Company

shall engage an investor relations firm mutually agreed to by the Company and a note holder from the time of the Listing Event

until six months after the Listing Event.

The Company is also required to engage Insight Advisory as a consultant to provide business

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Senior Secured Convertible Promissory Notes, continued

December 5, 2019, an aggregate of $4,343,000 SPA Notes, were amended and converted, into 2,171,500 shares of our common with an

amended conversion price of $2.00.

In addition, per the amendments the Company modified the Original Warrants issued of 303,071

with an exercise price of $8.40 to warrants to acquire an aggregate of 1,085,750 shares of common stock of the Company with an

exercise price of $2.40.

December 5, 2019, a $345,000 SPA Notes, was amended and converted, into 138,000 shares of our common stock with an amended conversion

December 5, 2019, an aggregate of $4,343,000 SPA Notes, were amended and converted, into 2,171,500 shares of our common stock

with an amended conversion price of $2.00.

In addition, per the amendments the Company modified the Original Warrants issued

of 303,071 with an exercise price of $8.40 to warrants to acquire an aggregate of 1,085,750 shares of common stock of the Company

with an exercise price of $2.40.

December 5, 2019, a $345,000 SPA Note, was amended and converted, into 138,000 shares of our common stock with an amended conversion

price of $2.50.

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of $8.40 to warrants to acquire an aggregate of 69,000 shares of common stock of the Company with an exercise price of $3.00.

the year ended December 31, 2020, the Company repaid an aggregate of $450,000 in 15% senior secured convertible promissory notes.

Secured Convertible Notes

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price of $16.10 to warrants to acquire an aggregate of 41,667 shares of common stock of the Company with an exercise price of

the year ended December 31, 2020, the Company repaid the $75,000 12% secured convertible promissory note.

Convertible Notes

January 4, 2018 the Company issued a $100,000 convertible promissory note.

The note bears no stated interest or maturity date.

The note as amended and extended on January 29, 2018, will automatically convert into shares of the Company’s common stock

upon the earlier of (a) twelve months from the extension date or (b) the approval of the Form 1-A Registration Statement, at a

50% discount to the initial public offering price.

January 24, 2018 to January 25, 2018, the Company received an aggregate of $150,000 associated with the issuances of convertible

promissory notes payable, of which $100,000 were issued to a related party, as amended and extended on or about January 29, 2018,

with a stated interest rate of 10% per the original 60-day-term, convertible at the option of the holder into common stock at

a price per share of $11.375 (50% of initial public offering price), and, if not converted, will become due and payable along

with the principal amount upon the earlier of (a) six months following the extension or (b) the approval of the Form 1-A Registration

In January 2018, the Company and certain note holders, including

related parties, agreed to extend the maturity date of convertible notes payable in the aggregate principal amount of $1,591,800

to be upon the earlier of the closing of the initial public offering, but no later than July 29, 2018.

February 7, 2018, the Company and a note holder entered into an amendment to a promissory note issued by the Company on May 31,

2017, whereby the parties agreed to (i) extend the term of the note to March 15, 2018, (ii) increase the outstanding balance of

the note to $170,000, inclusive of principal and interest and (iii) the Company agreed to payments on the following dates:

$70,000 upon entering into the amendment and (b) $100,000 on March 15, 2018.

See Note 15 –

Litigations, Claims and

Assessments for further action taken by the note holder.

May 8, 2018 to September 30, 2018, the Company received an aggregate of $784,000 associated with the issuances of convertible

promissory notes payable, of which $550,000 were issued to a related party.

In addition, the Company issued a convertible promissory

note of $30,000 for which the proceeds was received by the Former Parent and the Company recorded the corresponding receivable.

The notes bear no stated interest or maturity date.

The notes are convertible into shares of the Company’s stock upon the

earlier of (a) six months from the issue date or (b) the first day the company’s stock is publicly traded or (c) converted

at the option of the holder.

In connection with the issuances of the convertible promissory notes, the Company issued three-year

warrants for the purchase of an aggregate of 58,142 shares of MMI’s common stock at an exercise price of $22.75 per share.

& SUBSIDIARIES

to Consolidated Financial Statements

11 –NOTES PAYABLE, continued

Convertible Notes, continued

July 2018, the Company received an aggregate of $137,000 associated with the issuances of convertible promissory notes payable.

The notes bear no stated interest or maturity date.

The notes are convertible into shares of the Company’s stock upon the

earlier of (a) six months from the issue date or (b) the first day the company’s stock is publicly traded or (c) converted

at the option of the holder.

In connection with the issuances of the convertible promissory notes, the Company issued three-year

warrants for the purchase of an aggregate of 9,785 shares of MMI’s common stock at an exercise price of $22.75 per share.

the year ended December 31, 2018, convertible notes with an aggregate amount of $1,850,340 were automatically converted into 214,918

shares of the Company’s common stock pursuant to the terms of the notes.

or about January 23, 2019, the Company and certain note holders, including related parties, agreed to extend the maturity date

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price of $1.00 per share.

The Company reclassified $12,972 of convertible notes payable at December 31, 2018 to convertible

notes payable related parties during the quarter ended September 30, 2019.

The Company reclassified $12,972 of convertible notes payable at December 31, 2018 to convertible notes

payable related parties during the quarter ended September 30, 2019.

April 2019, the Company repaid convertible notes payable in the aggregate principal amount of $150,000, of which $100,000 belong

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on the convertible notes payable repaid in the aggregate amount of $111,666.

December 5, 2019, an aggregate of $1,375,000 of our original other coverable notes, were amended and converted, into 392,850 shares

of our common stock with an amended conversion price of $3.50.

In addition, per the amendments the Company modified the original

warrants issued of 10,713 with an exercise price of $65.31 to warrants to acquire an aggregate of 200,000 shares of common stock

of the Company with an exercise price of $3.50.

of December 31, 2019, and 2018 the Company has another convertible note payable in the amount of $100,000 which is included within

convertible notes payable.

See Note 15 –

Commitments and Contingencies –

Litigation, Claims and Assessments

for details related to the $100,000 other convertible note payable.

& SUBSIDIARIES

to Consolidated Financial Statements

11 –NOTES PAYABLE, continued

Other Convertible

Notes, continued

During the year ended December 31, 2019, as

discussed throughout this footnote, various convertible notes where amended and the note holders where induced to convert their

notes and the Company incurred inducement expense related to the convertible notes of $15,102,206.

The modification

was a once of event that only applied to holders willing to convert and therefore was recorded as inducement expense.

December 5, 2019, an aggregate of $1,375,000 of our original other covertible notes, were amended and converted, into 392,850

shares of our common stock with an amended conversion price of $3.50.

In addition, per the amendments the Company modified the

original warrants issued of 10,713 with an exercise price of $65.31 to warrants to acquire an aggregate of 200,000 shares of common

stock of the Company with an exercise price of $3.50.

the year ended December 31, 2019, as discussed throughout this footnote, various convertible notes were amended and the note holders

were induced to convert their notes and the Company incurred inducement expense related to the convertible notes of $15,102,206.

The modification was a one time event that only applied to holders willing to convert and therefore was recorded as inducement

the year ended December 31, 2019, as discussed throughout this footnote, various warrants terms where modified.

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Company recorded warrant modification expense of $5,405,770.

In applying the Black-Scholes option pricing model to value the warrants that where modified, the Company used the following assumptions:

For the Years Ended

Risk free interest rate

Expected term (years)

Expected volatility

Expected dividends

In applying the Black-Scholes option pricing model to value the warrants

that where modified, the Company used the following assumptions:

the Year Ended

free interest rate

accordance with ASC 470-20 “Debt with Conversion and other Options”, the intrinsic value related to the convertible

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As of December

31, 2019, the Company has an aggregate debt discounts on the convertible notes and convertible notes, related parties of $38,918

and $0, net of amortization expenses, related to the warrants and the beneficial conversion feature, respectively, and as

of December 31, 2018 the Company recorded aggregate debt discounts on the convertible notes and convertible notes, related parties

of $320,030 and $1,226,691, net of amortization expenses, related to the warrants and the beneficial conversion feature, respectively,

on the convertible notes.

For the year ended December 31, 2019 and 2018 the Company recorded aggregate debt discounts of $548,354

and $548,020, related to the warrants and the beneficial conversion feature, respectively, on the convertible notes, which were

amortized over the expected terms of the respective notes.

31, 2019, the Company has aggregate debt discounts on the convertible notes and convertible notes, related parties of $38,918

and $0, net of amortization expenses, related to the warrants and the beneficial conversion feature, respectively.

ended December 31, 2019, the Company recorded aggregate debt discounts of $548,354 and $548,020, related to the

warrants and the beneficial conversion feature, respectively, on the convertible notes, which were amortized over the expected

terms of the respective notes.

the year ended December 31, 2020, the Company repaid a $25,000 other convertible note payable.

of December 31, 2020 and 2019, the Company has another convertible note payable in the amount of $100,000 which is included

within convertible notes payable.

See Note 14 –

Commitments and Contingencies –

Litigation, Claims and Assessments

for details related to the $100,000 other convertible note payable.

& SUBSIDIARIES

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Notes Payable

January 4, 2018 the Company issued a $25,000 promissory note to a related party.

The note has a stated interest of 10% over the

original term of sixty days.

The note as amended and extended on January 29, 2018 becomes due and payable upon the earlier of

(a) six month following the date of extension or (b) the approval of the Form 1-A Registration Statement.

January 24, 2018, the Company entered into a promissory note with an unrelated third party in the principal amount of $511,765

with a maturity date of March 30, 2018.

The note is issued with a 15% original issue discount of which the Company received cash

proceeds of $435,000.

In connection with the promissory note, the Company issued three-year warrants for the purchase of an aggregate

of 11,247 shares of the Company’s common stock with an exercise price per share at 50% of initial public offering price.

The grant date fair value of the warrants of $155,104 has been amortized over the terms of the note and was recorded as interest.

The warrant contains a cashless exercise provision and piggyback registration rights as to the common stock underlying the warrants

subsequent to the filing and effectiveness of the Form 8-A with the SEC following the closing of the initial public offering.

In the event of default, the principal amount of the note is to be increased by 30% of the original principal amount and another

three-year warrant for the purchase of an additional 11,247 shares of the Company’s common stock with an exercise price

per share at 50% of initial public offering price, which together with the original warrant would constitute 100% warrant coverage.

On March 30, 2018, the Company had defaulted on the loan and as a result the principal interest amount of the note has increase

by $153,529 and the Company issued the additional three-year warrants for the purchase of an aggregate of 11,247 shares of the

Company’s common stock with an exercise price per share at 50% of initial public offering price.

The grant date fair value

of the warrants of $149,951 has been recorded as interest expense.

The Company has since defaulted on the note and the note was

subsequently converted into Secured Convertible Promissory Notes (see Note 17 Subsequent Events - 15% Senior Secured Convertible

or about January 23, 2019, the Company and certain note holders, including related parties, agreed to extend the maturity date

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publicly on an exchange.

During December 2019, the Company issued a

note payable in the principal amount of $300,000.

The note has an original issue discount of 20%.

The note becomes due

in full on or before February 21, 2020.

The note has been repaid as of the date of the filing of this report.

The note has been repaid during the year ended December 31, 2020.

October 10, 2019, the Company issued a note payable in connection with the acquisition of the franchisee location in the amount

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Bronx Acquisition for details regarding a note payable.

December 2019, the Company issued a note payable in the principal amount of $300,000.

The note has an original issue discount

The note becomes due in full on or before February 21, 2020.

The note has been repaid during the year ended December 31,

February 3, 2020, the Company issued a note payable in the principal amount of $150,000.

The note has an original issue discount

The note become due in full on or before February 21, 2020.

The note has been repaid during the year ended December 31,

May 9, 2020, the Company entered into a Paycheck Protection Program Promissory Note and Agreement with Greater Nevada Credit Union,

pursuant to which the Company received loan proceeds of $866,300 (the “PPP Loan”).

The PPP Loan was made under, and

is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S.

Business Administration.

The current term of the PPP Loan is two years with a maturity date of May 9, 2022 and contains a favorable

fixed annual interest rate of 1.00%.

Payments of principal and interest on the PPP Loan will be deferred for the first ten months

of the term of the PPP Loan if the Company did not apply for forgiveness on the PPP Loan.

Since the Company applied for

loan forgiveness during the first ten months of the term, payments are deferred until the U.S.

Small Business Administration determines

the Company’s loan forgiveness amount.

Principal and interest are payable monthly and may be prepaid by the Company

at any time prior to maturity with no prepayment penalties.

Under the terms of the CARES Act, recipients can apply for and receive

forgiveness for all, or a portion of loans granted under the PPP.

Such forgiveness will be determined, subject to limitations,

based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll

costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”),

and on the maintenance of employee and compensation levels during the eight-week period following the funding of the PPP Loan.

The Company believes that it has been using the proceeds of the PPP Loan, for Qualifying Expenses.

As of the date of filing this

report the Company submitted their application for forgiveness of the PPP Loan.

However, no assurance is provided that the Company

will be able to obtain forgiveness of the PPP Loan in whole or in part.

& SUBSIDIARIES

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10 –NOTES PAYABLE, continued

As of December 31, 2019, the Company had

an aggregate gross amount of $650,000 in convertible notes payable outstanding, net of debt discount in the amount of $38,918

and a net balance of $611,082 included within convertible notes payable, net of debt discount.

As of December 31, 2018, the Company

had an aggregate gross amount of $3,428,266 in convertible notes payable outstanding, net of debt discount in the amount of $1,313,259

and a net balance of $2,115,007 included within convertible notes payable, net of debt discount.

As of December 31, 2019, the Company

had an aggregate gross amount of $0 in convertible notes payable, related parties, outstanding, net of debt discounts in the amount

of $0 and a net balance of $0 included within convertible notes payable, related parties, net of debt discount.

As of December

31, 2018, the Company had an aggregate gross amount of $387,028 in convertible notes payable outstanding, net of debt discounts

in the amount of $233,462 and a net balance of $153,566 included within convertible notes payable, related parties, net of debt

of December 31, 2020, the Company had an aggregate gross amount of $182,458 in convertible notes payable outstanding, (net

of debt discount in the amount of $0 and a net balance of $182,458 included within convertible notes payable, net of debt

As of December 31, 2019, the Company had an aggregate gross amount of $732,458 in convertible notes payable

outstanding (net of debt discount in the amount of $38,918 with a net balance of $693,540 included within convertible notes payable,

net of debt discount).

of December 31, 2020, the Company had an aggregate amount of $1,276,692 and $0 in other notes payable and other notes payable,

related parties, respectively.

related party, respectively.

As of December 31, 2019, the Company had an aggregate amount of $591,807 and $91,000 in other notes

payable and other notes payable, related parties, respectively.

of December 31, 2019, our gross outstanding debt of $1,415,265, together with interest at rates ranging between 10% - 15% per

annum, was due on various dates through October 10, 2024.

As of December 31, 2019, our outstanding debt was as follows:

payable and other notes payable, related party , respectively.

maturities of other notes payable as of December 31, 2020, are as follows:

DEFERRED REVENUE

December 31, 2020 and 2019, deferred revenue consists of the following:

December 31, 2019

December 31, 2018

Franchise fees

Unearned vendor rebates

Unearned vendor rebates, current

Unearned vendor

rebates, current

Franchise fees, current

Deferred revenues, non-current

Deferred revenues,

revenue of $277,255 at December 31, 2019 was recognized in revenue in 2020 within franchise royalties and fees on the consolidated

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current liabilities consist of the following:

December 31, 2019

December 31, 2018

Gift card liability

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presented below:

For the Years Ended

the Years Ended

Deferred tax assets:

Net operating loss carryforwards

Receivable allowance

operating loss carryforwards

Stock-based compensation

Accounts receivables

Intangible assets

Property and equipment

Deferred revenues

Gross deferred tax asset

Deferred tax liabilities:

Beneficial conversion feature

Deferred Rent

Gross deferred tax liabilities

deferred tax asset

Deferred tax liabilities:

Beneficial conversion

deferred tax liabilities

Net deferred tax assets

Valuation allowance

Net deferred tax assets, net of valuation allowance

tax assets, net of valuation allowance

income tax (provision) benefit for the periods shown consist of the following:

For the Years Ended

the Years Ended

State and local:

Change in valuation allowance

Income tax (provision) benefit

Change in valuation

Income tax (provision)

& SUBSIDIARIES

2 unchanged sentences

reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the periods shown, are as

For the Years Ended

Federal income tax benefit at statutory rate

State income tax benefit, net of federal impact

the Years Ended

Federal income tax benefit

at statutory rate

State income tax benefit, net of federal

Permanent differences

Income passed through to non-controlling interests

Change in effective rate

Change in valuation allowance

Effective income tax rate

At December 31, 2019 and 2018, the Company had approximately $16.4

million and $11.9 million, respectively, each of federal and state net operating losses (“NOLS”) which may be available

to offset future taxable income.

The net operating loss carryforwards, if not utilized, will expire from 2030 to 2037 for federal

In accordance with Section 382 of the Internal Revenue Code, the utilization of the Company’s net operating loss

carryforwards could be subject to annual limitations if there has been greater than 50% ownership change.

As such, the Company

has tracked its ownership changes in accordance with Section 382 and has determined that the Company’s net operating loss

carryforwards are subject to annual limitations due to a greater than 50% ownership change which occurred during the year ended

December 31, 2019.

The Section 382 limitation will be approximately $500,000 a year.

Based on this limitation, none of the prior

year NOLS are expected to expire before being utilized, therefore, no reduction in the NOL carryforward is required.

Company has filed income tax returns in the U.S.

federal jurisdiction and the states of California, New Jersey, Texas and New

The Company’s tax return filed for 2018, 2017, 2016 and 2015 remains subject to examination.

Company is in the process of filing its amended U.S.

Income passed through to non-controlling

Change in valuation

Effective income

Company has filing obligations in what it considers its U.S.

major tax jurisdictions as follows:

Nevada, California, New Jersey,

Texas, New York State and New York City.

The Company’s tax returns filed for the years ending December 31, 2019, 2018, 2017

and 2016 remain subject to examination.

Company is in the process of amending its U.S.

Federal and State tax returns for the years ended December 31, 2019, 2018, 2017,

The NOLS for the years will not be available until the returns are filed.

Assuming these returns are filed, as

of December 31, 2019 the company had approximately $11.9 million of Federal and State NOLS that may be available to offset future

taxable income.

2016 and 2015.

As a result of the Company amending its Federal and State tax returns, the Company cannot, with certainty, determine

the exact Federal and State NOLs available as of December 31, 2020.

The Company estimates that upon completing the filing of the

amended returns and the returns for year-end December 31, 2020 that the Company would have approximately $27.5 million of Federal

and State NOLs available to offset future taxable income.

The net operating loss carryforwards, if not utilized, will expire from

2031 to 2037 for federal and state purposes.

Approximately $100,000 of NOL expired during year end December 31, 2020 and approximately

$36,000 is projected to expire during year end December 31, 2021.

accordance with Section 382 of the Internal Revenue Code, the utilization of the Company’s net operating loss carryforwards

could be subject to annual limitations if there has been greater than 50% ownership change.

As such, the Company completed a Section

382 analysis and determined that none of its net operating losses would be limited as of December 31, 2020.

& SUBSIDIARIES

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at December 31, 2020.

the year ended December 31, 2018, the Company became obligated for payments pursuant to two new lease agreements for restaurant

spaces with lease terms of 10 years, exclusive of options to renew.

These lease agreements have a monthly rent expense based on

a percentage fee of eight percent of gross sales for each year of the agreement.

August 1, 2019, the Company entered into a settlement agreement with a landlord in connection with the prior executive office

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amount has been paid.

On August 22, 2019, the Company entered into a sublease with sublandlord,

in connection with the acquisition of the Midtown location, for a lease with a term ending on August 31, 2020.

The Company may

terminate this sublease with the sublandlord with 30-day notice.

The lease calls for annual base rent during the remaining term

ranging between $10,448 an $11,417.

See Note 4 Acquisition –

Midtown Acquisition.

August 22, 2019, the Company entered into a sublease with sublandlord, in connection with the acquisition of the Midtown location,

for a lease with a term ending on August 31, 2022.

The Company may terminate this sublease with the sublandlord with 30-day notice.

The lease calls for annual base rent during the remaining term ranging between $10,448 an $11,417.

October 10, 2019, the Company entered into a lease agreement for five years with a landlord in connection with the acquisition

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will be ten percent for gross sales equal or greater than $1,000,000 for an agreement year.

June 26, 2020, the Company was informed that one of their leases for a future military location was terminated due to the current

economic environment as a result of COVID-19.

to the economic effect of COVID-19 the Company made the decision to close one of their Company owned stores permanently during

the third quarter of 2020.

As a result, the Company was able to negotiate a sublease on October 29, 2020, for the remainder of

the lease term in which the subtenant agreed to make lease payments to the Company until the lease terminates on February 28,

October 19, 2020, the Company entered into a lease agreement for five years with a landlord in connection with the acquisition

of the Chelsea location.

The lease calls for an annual base rent of $11,000 per month for the first twelve months, with annual

nine percent rent increase thereafter.

The lease has the option of two five-year extensions with an annual three percent rent

November 2, 2020 the Company agreed to a lease assignment for the remaining term of a five years with a landlord, that was entered

into on January 1, 2020, in connection with the acquisition of the Philadelphia location.

The lease calls for an annual base rent

of $43,992 per month.

The lease has the option of one five-year extensions with an annual base rent of $48,396 per month.

Company has recorded security deposits, totaling, in the aggregate, approximately $131,790 and $37,000 as of December 31,

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aggregate minimum lease payments for these leases and others as of December 31, 2020 are:

Future Minimum Lease Payments

Total rent expense was $467,106 and $980,136 for the years ended

December 31, 2019 and 2018, respectively.

Of which $417,220 is recognized as rent expense under operating cost and expenses on

the consolidated statement of operations and the remaining $49,886 is recognized within general and administrative expense on the

consolidated statement of operations.

January 17, 2018, Grady Metoyer resigned as the Company’s Chief Financial Officer, effective immediately.

connection with the resignation of Grady Metoyer, on January 25, 2018, the Company’s board of directors appointed Ferdinand

Groenewald as its Vice President of Finance, Principal Financial Officer and Principal Accounting Officer.

The Company entered

into an at-will employment agreement with Ferdinand Groenewald for a one-year term that is to commence as of the date the Company

successfully receives at least $5,000,000 in gross proceeds from an SEC qualified offering under Offering Statement under Regulation

A+ under the Securities Act of 1933, as amended.

The employment agreements did not become effective since the company terminated

its Regulation A+ offering on March 29, 2018.

April 11, 2018, Robert E.

Morgan resigned as Chief Executive Officer, President and Director of the Company and all other positions

with subsidiaries of the Company.

April 16, 2018, Kevin Mohan was appointed by the Company to serve as the Interim President of the Company.

April 30, 2018, Tim M.

Betts resigned as a director of the Company for personal reasons.

May 1, 2018, the Company appointed Michael J.

Roper as Chief Executive Officer (“CEO”) of the Company and entered

into an Employment Agreement with Mr.

During the term of the agreement, Mr.

Roper will be entitled to a base salary at

the annualized rate of $250,000 and will be eligible for a discretionary performance bonus to be paid in cash or equity.

is also entitled to 14,285 shares of common stock of the Company that will be issued upon a Public offering of at least $3,000,000.

In addition, Mr.

Mohan resigned as Interim President of the Company.

& SUBSIDIARIES

to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES, continued

Agreements, continued

May 29, 2018, Ferdinand Groenewald, the Vice President of Finance, Principal Financial Officer and Principal Accounting Officer,

notified the Company that he is resigning from his positions with the Company and its subsidiaries effective May 29, 2018.

Minimum Lease Payments

rent expense was $726,242 and $467,106 for the years ended December 31, 2020 and 2019, respectively.

Of which $691,986 is recognized

as rent expense under operating costs and expenses on the consolidated statement of operations and the remaining $34,256 is recognized

within general and administrative expenses on the consolidated statement of operations.

Included within rent expense for the

year ended December 31,2020, under operating cost and expense on the consolidated statement of operation is monthly license

fees of approximately $78,000 incurred in connection with our delivery only kitchens.

September 26, 2018, the Company rehired Ferdinand Groenewald as Chief Financial Officer of the Company and entered into an Employment

12 unchanged sentences

benefits plans as the Company may institute from time to time that are available for full-time employees.

In addition, pursuant

to board approval, Mr.

Groenewald is entitled to 15,714 shares of common stock of the Company that will be issued upon a Public

Offering of at least $3,000,000.

Groenewald was paid

a discretionary performance cash and equity bonuses including cash of $25,000 and 19,285 shares upon completion of the

Public Offering.

On August 11, 2020, Mr.

Groenewald agreed to cancel 19,285 shares of the Company’s common stock previously

issued and waved all rights to the equity compensation provided under his employment agreement.

September 26, 2018, the Company appointed Kenneth Miller as Chief Operating Officer of the Company and entered into an Employment

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closing of the Public Offering.

Miller is also entitled to 14,285 shares of common stock of the Company that will be issued

upon a Public offering of at least $3,000,000.

Miller is eligible for a discretionary performance cash and equity bonuses

which will include cash of $50,000 and 10,714 shares of common stock upon completion of the Public Offering, which may be increased

to 17,857 shares in the event $5 million is raised.

Miller is also eligible to participate in employee benefits plans as the

Company may institute from time to time that are available for full-time employees.

Miller was issued 14,285 shares of the Company’s common stock upon closing of the Public

In addition, Mr.

Miller was paid a discretionary performance cash and equity bonuses including cash of $50,000 and 17,857

shares of common stock upon completion of the Public Offering.

Miller is also eligible to participate in employee benefits

plans as we may institute from time to time that are available for full-time employees.

On August 11, 2020, Mr.

Miller agreed

to cancel 32,142 shares of common stock previously issued to him and waived all rights to equity compensation provided under his

employment agreement.

& SUBSIDIARIES

8 unchanged sentences

The Employment Agreement will

be automatically extended upon listing the Company on a national exchange and raising $3,000,000 (the “IPO”).

the term of the Employment Agreement, Mr.

Roper will be entitled to a base salary at the annualized rate of $250,000, which was

increased to $275,000 upon achieving various milestones required by the Investors that participated in the September 2018 Offering

and will be increased to $350,000 upon the Company completing the IPO.

Roper will be eligible for a discretionary performance

bonus to be paid in cash or equity, provided, however, no cash bonus will be paid until the closing of the IPO.

Roper is entitled

to $100,000 bonus upon closing of the IPO.

Roper is also entitled to 14,285 shares of common stock of the Company that will

be issued upon a Public offering of at least $3,000,000.

be automatically extended upon listing the Company on a national exchange and raising $3,000,000 (the “Public Offering”).

During the term of the Employment Agreement, Mr.

Roper will be entitled to a base salary at the annualized rate of $250,000, which

was increased to $275,000 upon achieving various milestones required by the Investors that participated in the September 2018

Offering and will be increased to $350,000 upon the Company completing the Public Offering.

Roper will be eligible for a discretionary

performance bonus to be paid in cash or equity, provided, however, no cash bonus will be paid until the closing of the Public

Roper was paid a $100,000 bonus upon closing of the Public Offering.

Roper was also issued 14,285 shares of

our common stock upon the closing of the Public Offering.

In addition, pursuant to board approval on June 29, 2019, Mr.

entitled to 35,714 shares of common stock of the Company that will be issued upon a Public Offering of at least $3,000,000.

the event the Company raises $3 million or $5 million upon completion of a public offering together with listing on a national

exchange, then Mr.

Roper will receive 21,428 restricted stock units or 35,714 restricted stock units, respectively.

Roper will be entitled to receive 14,285 restricted stock units upon the one- and two-year anniversaries of his employment

that will be issued upon a Public Offering.

was issued 35,714 shares of our restricted common stock awards upon closing of the Public Offering.

In addition, upon the closing

of the Public Offering Mr.

Roper received 14,285 shares of common stock pursuant to his employment agreement.

Roper was issued

an additional 35,714 pursuant to his employment agreement upon the closing of the Public Offering of at least $5 million.

Roper’s common stock was issued on February 18, 2020 and his bonus was paid, subsequent to completing our Public Offering.

On August 11, 2020, Mr.

Roper agreed to cancel 100,000 shares of common stock previously issued to him and waived all rights to

equity compensation provided under his employment agreement.

October 26, 2018, the Company entered into an Employment Agreement with Kevin Mohan.

2 unchanged sentences

to the terms of the agreement.

The Employment Agreement will be automatically extended upon the IPO.

During the term of the Employment

Agreement, Mr.

Mohan will be entitled to a base salary at the annualized rate of $156,000, which will be increased to $175,000

upon the IPO.

Mohan will be eligible for a discretionary performance bonus to be paid in cash following the closing of the

Mohan is entitled to $50,000 bonus upon closing of the IPO.

In the event the Company raises $3 million or $5 million,

Mohan will receive 14,285 restricted stock units or 28,571 restricted stock units, respectively.

In addition, pursuant

to board approval on June 29, 2019, Mr.

Mohan is entitled to 35,714 shares of common stock of the Company that will be issued

upon a Public Offering of at least $3,000,000.

& SUBSIDIARIES

to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES, continued

Agreements, continued

The Employment Agreement will be automatically extended upon the Public Offering.

During the term

of the Employment Agreement, Mr.

Mohan will be entitled to a base salary at the annualized rate of $156,000, which will be increased

to $175,000 upon the Public Offering.

Mohan will be eligible for a discretionary performance bonus to be paid in cash following

the closing of the Public Offering.

Mohan was paid $50,000 bonus upon closing of the Public Offering.

Mohan was also issued

28,571 shares of our common stock upon the closing of the Public Offering.

In addition, pursuant to board approval on June 29,

Mohan was issued 35,714 shares of our restricted common stock awards upon closing of the Public Offering.

Mohan’s

common stock was issued on February 18, 2020 and his bonus was paid, subsequent to completing our Public Offering.

On August 11,

Mohan agreed to cancel 64,285 shares of common stock previously issued to him and waived all rights to equity compensation

provided under his employment agreement.

May 5, 2019, the Company entered into an Employment Agreement with Rodney Silva.

2 unchanged sentences

terminated pursuant to the terms of the agreement.

The Employment Agreement will be automatically extended upon the IPO.

the term of the Employment Agreement, Mr.

The Employment Agreement will be automatically extended upon the Public Offering.

During the term of the Employment Agreement, Mr.

Silva will be entitled to a base salary at the annualized rate of $150,000.

will be eligible for a discretionary performance bonus to be paid in cash following the closing of the IPO.

Silva is also

eligible to participate in employee benefits plans as the Company may institute from time to time that are available for full-time

Silva will be eligible for a discretionary performance bonus to be paid in cash following the closing of the Public Offering.

Silva is also eligible to participate in employee benefits plans as the Company may institute from time to time that are available

for full-time employees.

May 6, 2019, the Company appointed Aimee Infante as Chief Marketing Officer of the Company and entered into an Employment Agreement

8 unchanged sentences

Following the closing of the Public Offering, Ms.

Infante will receive a one-time $10,000

cash bonus and will be entitled to an annual cash bonus based on 25% of her base salary subject to satisfying specific written

The Company agreed to issue Ms.

Infante 714 restricted stock units upon closing of the Public Offering, which may be

increased to 1,071 restricted stock units if the Public Offering is in excess of $5 million.

Infante is also eligible to participate

in employee benefits plans as the Company may institute from time to time that are available for full-time employees.

September 12, 2018, the Company entered into a Consulting Agreement with a professional business and financial expert to provide

the Company financial and business advice including, but not limited, to discussing financing, potential business opportunities

and potential acquisition.

In addition, the consultant will help the Company select an underwriter to conduct an offering and

will work with Company to prepare for the offering.

Pursuant to the terms of the agreement the Company agreed to pay $140,000

in cash and to issue 35,714 restricted shares of the Company’s common stock on or before September 30, 2018.

the Company agrees to pay the following additional fees (i) $70,000 in cash and 10,000 in restricted shares upon performance of

the first milestones per the SPA, (ii) $70,000 in cash and 10,000 in restricted shares upon performance of the second milestones

per the SPA and (iii) $150,000 in cash and 28,571 in restricted shares upon the completion of both the contract and the Company’s

As of December 31, 2019, the company issued an aggregate of 55,714 shares of common stock pursuant to the agreement

and paid $280,000 in cash pursuant to the terms of the agreement.

See Note 17 –

Subsequent Events –

Issuance for issuance subsequent to year end as the Company’s offering was completed during 2020.

May 24, 2019, the Company entered into a Consulting Agreement with a project management group to assist with various financial

matters, documentation and presentations as needed.

Pursuant to the terms of the agreement, the Company will pay $5,000 per month

until the contract is cancelled by either party with written notice.

Infante receive a one-time $10,000 cash

bonus and will be entitled to an annual cash bonus based on 25% of her base salary subject to satisfying specific written criteria.

Note 15 –

Equity –

Restricted Common Stock for details related the restricted stock issuance.

October 27, 2020, the Company held its annual shareholders meeting and the shareholders voted on the directors to serve on the

Company’s board of directors.

The shareholders elected Stephan Spanos, A.B.

Southall III, Paul L.

Menchik, Peter Petrosian,

Jeff Carl, Major General (ret) Malcom Frost and Phillip Balatsos to serve on the Company’s board of directors.

& SUBSIDIARIES

to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES, continued

July 2019, the Company entered into a Consulting Agreement, effective as of July 1, 2019, with an advisory group to provide strategic

3 unchanged sentences

agreement, the Company issued 41,426 restricted shares of common stock and agreed to pay a cash fee of $75,000 upon signing the

& SUBSIDIARIES

to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES, continued

Agreements, continued

July 2019, the Company entered into a Consulting Agreement with a consultant with a background in menu and recipe development

1 unchanged sentence

The Company will issue an aggregate

of 1,642 shares of common stock as payment pursuant to the terms of the agreement and reimburse the consultant for any out of

pocket expenses in connection with the services provided pursuant to the agreement.

As of December 31, 2019, the Company issued

500 shares to the consultant pursuant to the agreement.

of 1,642 shares of common stock as payment pursuant to the terms of the agreement and reimburse the consultant for any out-of-pocket

expenses in connection with the services provided pursuant to the agreement.

As of December 31, 2020, the Company issued 500 shares

to the consultant pursuant to the agreement.

February 18, 2020, the Company entered into a professional services agreement with a company to provide advice on business development

of food stores and delivery kitchen operations.

In addition, they will review and advise the Company on potential acquisition

targets, including financial analytics for post-merger entities and provide assistance in preparing pro-forma financial information.

The term of the agreement commences from the effective date on February 18, 2020 and expires on February 18, 2021.

the terms of the agreement, the Company agreed to issue 300,000 shares of the Company’s common stock and 100,000 three-year

cashless warrants with an exercise price of $5.00 per share upon signing of the agreement as payment.

The grant date fair value

of the warrants of $191,000 was recorded in general and administrative expense as stock-based compensation.

The Company rescinded

the issuance of 100,000 warrants and 300,000 shares of the Company’s common stock in July 2020 that were issued in the first

quarter of 2020, pursuant to a consulting agreement.

Although the shares were duly authorized and validly issued, the Company

rescinded the stock and warrants as it did not have the required amount of equity authorized under its 2019 Incentive Stock Plan.

Following the rescission of the warrants and shares of common stock, the consultant threatened to commence legal proceedings against

the Company and demanded the Company to re-issue the 300,000 shares of common stock and 100,000 warrants and to provide the Consultant

registration rights.

In order to settle and avoid the time commitment and expense associated with potential litigation, the Company

and the Consultant entered into a Settlement Agreement (“Settlement Agreement”) on August 11, 2020 whereby the Company

agreed to issue 300,000 shares of common stock within 5 five days of entering into the Settlement Agreement.

These shares are

not subject to any equity plan.

The Company agreed to register the shares of common stock in consideration of a release by the

In addition, as part of the Settlement Agreement the Company issued 100,000 stock options upon the approval of the

2020 Equity Incentive Plan with a grant date fair value of $187,000.

See Note 15 –

Equity –

Options for more

details related to the issuance of the stock options.

February 24, 2020, the Company entered into a Consulting Agreement with consultants with experience in the area of corporate finance,

investor communication and financial and investor public relations.

The term of the agreement is for two months from the effective

date on February 27, 2020 and expires on April 27, 2020.

Pursuant to the terms of the agreement, the Company agreed to pay $215,000

in cash and to issue 10,000 shares of the Company’s common stock.

In the event the Company elects to not extend the term

of the agreement, it is to notify the consultants within five days of the conclusion of the 60-day term.

The Company did not extend

the term of the original agreement.

As of December 31, 2020, the company issued the 10,000 shares of common stock and paid the

$215,000 in cash pursuant to the terms of the agreement.

April 8, 2020, the Company entered into a professional service agreement with a consultant to provide advice on investor outreach

and institutional engagements.

The Consultants will also provide continuous market insight and interpret our trading activity.

The term of the agreement commenced from the execution date and ends on April 1, 2021.

Pursuant to the terms, the Company agreed

to pay the consultant in the form of non-qualified stock options to acquire 200,000 shares of the Company’s common stock,

exercisable at $2.50 per share for a period of one year.

The Options are fully vested upon the signing of this agreement.

the option is callable by the Company in the event the market price of its shares close above $3.50 per share for five consecutive

dates upon which the consultant will have three days to elect to exercise or forfeit the options.

The Company has not issued the

options pursuant to the original terms of the agreement and on August 11, 2020, the Company and the consultant entered into an

amendment and agreed that the 200,000 non-qualified stock options shall be issued upon the Company’s shareholders approval

of its 2020 Incentive Stock Plan.

As of December 31, 2020 as part of the Settlement Agreement the Company issued the 200,000

stock options upon the approval of the 2020 Equity Incentive Plan with a grant date fair value of $60,000.

See Note 15 –

Equity –

Options for more details related to the issuance of the stock options.

July 28, 2020, the Company entered into a Consulting Agreement with consultants with experience in the area of corporate finance,

investor communication and financial and investor public relations.

The term of the agreement is for one month from the effective

date on July 28, 2020 and expires on August 28, 2020.

Pursuant to the terms of the agreement, the Company agreed to pay $253,500

in cash and to issue 15,000 shares of the Company’s common stock.

As of December 31, 2020, the Company issued the 15,000

shares of common stock and paid the $253,500 in cash pursuant to the terms of the agreement.

& SUBSIDIARIES

to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES, continued

July 16, 2019, the board of directors approved a board compensation plan that would compensate the board members for their deferred

8 unchanged sentences

The shares of common stock for committee service will be limited to two

Company will issue shares of common stock upon the occurrence of the public offering and up listing on a national exchange

as follows, which shall be prorated for a partial year:

Company issued shares of common stock upon the occurrence of the public offering and up listing on a national exchange as follows,

which was prorated for a partial year:

(i) directors that served as directors during the year ended December 31, 2017 each received

714 shares of common stock, (ii) directors that served as directors during the year ended December 31, 2018 each received 1,428

shares of common stock and (iii) directors that served as directors during the year ended December 31, 2019 each received 1,428

shares of common stock.

directors did not received compensation for services prior to the Company being up listed on a national exchange, the Company

agreed to provide equity in lieu of cash compensation and equity compensation for services rendered during 2017, 2018 and 2019.

For past director services in lieu of cash unpaid to date:

(i) directors that served as directors during the year ended December

31, 2017 will each receive 714 shares of common stock, (ii) directors that served as directors during the year ended December

31, 2018 will each receive 1,428 shares of common stock and (iii) directors that served as directors during the year ended December

31, 2019 will each receive 1,428 shares of common stock.

directors have not received compensation for services to date, the Company agreed to provide equity in lieu of cash compensation

and equity compensation for services rendered during 2017, 2018 and 2019.

For past director services in lieu of cash unpaid to

(i) directors that served as directors during the year ended December 31, 2017 will each receive shares of common stock

valued at $4,500 to be priced at the price per share of the Company’s public offering in connection with its uplisting (the

“Uplisting Offering”), (ii) directors that served as directors during the year ended December 31, 2018 will each receive

shares of common stock valued at $9,000, which shall be prorated for a partial year of service, to be priced at the price per

share of the Uplisting Offering and (iii) directors that served as directors during the year ended December 31, 2019 through the

date of the Uplisting Offering will each receive shares of common stock valued at $9,000, which shall be prorated for a partial

year of service, to be priced at the price per share of the Uplisting Offering.

Following the public offering, directors will

be paid cash for the balance of 2019.

31, 2017 each received shares of common stock valued at $4,500 priced at the price per share of the Company’s public offering

in connection with its uplisting (the “Uplisting Offering”), (ii) directors that served as directors during the year

ended December 31, 2018 each received shares of common stock valued at $9,000, which was prorated for a partial year of service,

and priced at the price per share of the Uplisting Offering and (iii) directors that served as directors during the year ended

December 31, 2019 through the date of the Uplisting Offering each received shares of common stock valued at $9,000, which was

prorated for a partial year of service, priced at the price per share of the Uplisting Offering.

August 5, 2019 the Company authorized the issuances of an aggregate of 17,005 shares of common stock, valued at a $7.00 per share,

2 unchanged sentences

of directors.

As of December 31, 2019 the Company accrued a total of $59,864 related to board compensation.

February 17, 2020 the Company authorized the issuance of an aggregate of 25,616 shares of common stock to the members of the board

of directors as compensation earned through the end of the fourth quarter of 2019.

June 24, 2020 the Company authorized the issuance of an aggregate of 4,340 shares of common stock to the members of the board

of directors as compensation earned through the end of the first quarter of 2020.

November 10, 2020 the Company authorized the issuance of an aggregate of 5,944 shares of common stock to the members of the board

of directors as compensation earned for the second and third quarter of 2020

December 4, 2020, the board of directors approved a new board compensation plan that would compensate the board members for their

deferred compensation for the fourth quarter 2020 through the third quarter of 2021.

The board members are eligible for cash compensation

of $12,000 per year to be paid quarterly within 30 days of the close of each quarter.

addition, on an ongoing basis pursuant to the approved board compensation plan each director will receive $8,000 in value of common

stock per year for service as director, $6,000 in value of shares of common stock per year for service on each committee and $4,000

in value of shares of common stock per year for service as chair for such committee.

The number of shares to be issued would be

based upon the closing price of the last trading date of each calendar quarter.

The shares of common stock for committee service

will be limited to two committees.

of December 31, 2020, the Company accrued a total of $36,697 related to board compensation.

& SUBSIDIARIES

1 unchanged sentence

COMMITMENTS AND CONTINGENCIES, continued

The Company failed in certain instances in paying sales taxes collected

from customers in specific states that impose a tax on sales of the Company’s products.

The Company had accrued for approximate

$329,089 and $297,160, which includes interest as of December 31, 2019 and December 31, 2018 related to this matter.

Company failed in certain instances in paying sales taxes collected from customers in specific states that impose a tax on sales

of the Company’s products during 2018 and 2019.

The Company had accrued for approximate $231,177 and $329,089, which

includes interest as of December 31, 2020 and December 31, 2019 related to this matter.

Claims and Assessments

2017, Limestone Associates LLC (“Limestone”) filed a complaint against ARH in the Civil Court of the City of New York,

County of New York, #78549/2017 for commercial non-payment of rent for the amount of $25,748 plus cost and disbursements of this

In May 2018, Limestone filed a complaint against ARH and Robert E.

Morgan (the former CEO of the Company) in the Supreme

Court of the State of New York, County of New York, index # 154469 seeking $1,357,243 in damages for rent, interest and other

May 2018, the Company, Former Parent and Mr.

Morgan were listed as defendants to a lawsuit filed by Crownhall Realty, LLC (“Crownhall”)

in the Supreme Court of the State of New York county of New York, #154467.

Crownhall is seeking $1,034,087 in damages for rent,

interest and other expenses.

October 3, 2018, the Company, ARH and Mr.

Morgan entered into a settlement agreement with Crownhall and Limestone agreeing to

forfeit all security deposits, pay an upfront amount of $25,000 and an additional $175,000 to be paid over 20 months.

This agreement

settles litigation surrounding two closed locations, which the plaintiffs were seeking a total of $2,391,330 in past damages for

rent, interest and other expenses.

As of December 31, 2019, the Company has accrued $52,500 for the remaining liability in accounts

payable and accrued expenses.

On March 27, 2018 a convertible note holder filed a complaint in

the Iowa District Court for Polk County #CVCV056029 against the Company for failure to pay the remaining balance due on a promissory

note in the amount of $100,000, together with interest, attorney fees and other costs of $171,035.

On June 6, 2018 a default judgement

was entered against the Company for the amount of $171,035.

The Company repaid an aggregate amount of $71,035, consisting of principal

and interest, as of the date of the filing of this report.

As of December 31, 2019, the Company has accrued for the liability in

convertible notes payable in the amount of $100,000 and accrued interest of $18,237 in accounts payable and accrued expenses.

April 2018, the Company and Former Parent was listed as a defendant in a lawsuit filed by a landlord (“Former Landlord”)

in the Superior Court of the State of California.

The Former Landlord is seeking $531,594 in damages for rent, interest and other

The original lease was for a 5-year period and commenced on or about September 30, 2015.

On January 15, 2019, the Company

and the Former Landlord entered a settlement and release agreement.

Pursuant to the settlement the Company shall pay the amount

of $531,594 as follows (i) first payment of $49,815, net of security deposit of $11,185, on or before January 23, 2019, (ii) second

payment of $25,000 on or before February 28, 2019 and (iii) thereafter sixty-nine payments of $6,400 on or before the 15th of

each month beginning on March 15, 2019.

Conditioned on the Company making twelve timely installment payments of $6,400, the Company

would be released of the remaining liability pursuant to the judgement.

As of December 31, 2019, the Company has met all their

obligations and the full amount has been paid.

& SUBSIDIARIES

to Consolidated Financial Statements

COMMITMENTS AND CONTINGENCIES, continued

Claims and Assessments, continued

May 4, 2018, Stratford Road Partners, LLC (“Stratford”) filed suit against the Company’s subsidiary for non-payment

of rent in the small Claims court in the State of North Carolina.

Since then the property has been vacated and the landlord offered

a settlement of $10,000 with no further lease obligation.

On June 5, 2019 the Company signed the settlement agreement and made

the payment to the landlord.

As of December 31, 2019, the Company has met all their obligations and the full amount has been paid.

March 27, 2018 a convertible note holder filed a complaint in the Iowa District Court for Polk County #CVCV056029 against the

Company for failure to pay the remaining balance due on a promissory note in the amount of $100,000, together with interest, attorney

fees and other costs of $171,035.

On June 6, 2018 a default judgement was entered against the Company for the amount of $171,035.

The Company repaid an aggregate amount of $71,035, consisting of principal and interest, as of the date of the filing of this

As of December 31, 2020, the Company has accrued for the liability in convertible notes payable in the amount of $100,000

and accrued interest of $23,056 is included in accounts payable and accrued expenses.

May 2018, Resolute Contractors, Inc., Quality Tile, MTL Construction, Genesis Electric, JNB Interiors and Captive Aire filed a

14 unchanged sentences

the Company has met all their obligations and the full amount has been paid.

January 18, 2019, the Company entered into an expense reimbursement agreement with an employee in connection with unreimbursed

expenses incurred on behalf of the Company in the amount of $81,140 recorded in accounts payable and accrued expenses as of March

The Company shall pay the employee as follows (a) $1,750 upon execution of the agreement, (b) $1,000 a week commencing

on January 25, 2019 ending May 24, 2019, (c) a onetime payment of $40,000 on the earlier of March 31, 2019 or when the Company

fully received the anticipated funding from the a tranche of the 15% Senior Secured Convertible Notes and (d) a onetime payment

of $21,390 on the earlier of May 31, 2019 or when the Company has fully received the anticipated funding from the second tranche

of the 15% Senior Secured Convertible Notes.

As of December 31, 2019, the full amount of $ 81,140 has been repaid.

or about March 7, 2019, the Company was listed as a defendant to a lawsuit filed by a contractor in the State of Texas.

8 unchanged sentences

Claims and Assessments, continued

May 6, 2019, the Company entered into a commission’s payment agreement in the aggregate amount of $45,894 in connection

with past due commission recorded in accounts payable and accrued expenses as of March 31, 2019.

The Company shall pay the employee

the outstanding commission balance as follows (a) $10,894 upon execution of the agreement and (b) $7,000 per month for five months

starting on May 31, 2019.

As of December 31, 2019, the full amount of $45,894 has been repaid.

January 23, 2020, the Company was served a judgment in the amount of $130,185 for a breach of a lease agreement in Chicago, Illinois,

in connection with a Company owned store that was closed in 2018.

As of December 31, 2020, the Company has accrued for the liability

in accounts payable and accrued expenses.

March 2021, the Company participated in a mediation concerning an investor who invested with American Restaurant Holdings, Inc

and/or American Restaurants, LLC, our former parent company, from 2013 through 2015 in the total amount of $531,250.

does not believe the dispute concerns Muscle Maker, Inc.

and intends to defend itself vigorously if the matter is not settled.

As of the filing of this report, the company has not accrued for any potential liability pending the outcome of continued mediation.

the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary

course of business.

In the opinion of management, such matters are currently not expected to have a material impact on the Company’s

financial statements.

In the opinion of management after consulting legal counsel, such matters are currently not expected to have

a material impact on the Company’s financial statements.

Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements

6 unchanged sentences

with Healthy Joe’s restaurants.

March 29, 2018, the Company decided to terminate its Regulation A+ offering in order to register its common stock with the SEC

under the Securities Exchange Act of 1934, as amended, using a Form 8-A12g and become a publicly reporting company.

Prior to terminating

the Regulation A+ offering, the Company sold 44,153 shares in the offering at $3.25 per share, yielding net proceeds of approximately

of December 31, 2019, the Company was authorized to issue 14,285,714 shares of $0.0001 par value per share common stock.

of the Company’s common stock are entitled to one vote per share.

Stock Issuances

the year ended December 31, 2018, the Company sold 180,000 shares of common stock of the company to various investors at a purchase

price of $1.00 per share providing $180,000 of proceeds to the Company.

See Note 11 –

Notes Payable –

15% Senior Secured Convertible Promissory Notes, 12% Secured Convertible Notes, and Other Convertible for details related to stock

issuances in connection with conversions of notes for the year ended December 31, 2019.

See Note 15 –

and Contingencies –

Consulting Agreements and Board Compensation for details related to additional stock issuances

for the year ended December 31, 2019.

Address Change

October 2020, the Company relocated its corporate office address from 308 East Renfro Street, Suite 101, Burleson, Texas, 76028

to 2600 South Shore Blvd.

Suite 300, League City, Texas, 77573.

Service Agreement

February 26, 2020, the Company entered into a Kitchen Services Agreement with a major delivery-only kitchen concept.

Services Agreement provides for ten locations in total with four initial locations starting in the Chicago market, two locations

in the Philadelphia market, one location in the Providence market, two locations in the Miami market and one

location in the New York market.

The Kitchen Services Agreement provide the Company with access to the delivery-only locations

for a one-year term with an automatic one-year renewal unless terminated by either party.

The delivery-only locations are set

up for third party delivery and provide that the Company must pay monthly license fees, processing service fees and storage service

The monthly license fees for the locations range from $3,000 to $6,000.

The monthly license fees become due 14 days after

the Company is granted access to the location.

As of the date of filing this report the Company has opened seven of the ten locations

with the Miami and New York locations anticipated to be opened in 2021.

& SUBSIDIARIES

to Consolidated Financial Statements

EQUITY, continued

October 27, 2020, the shareholders approved to amend the Company’s articles of incorporation to increase the number of authorized

shares of common stock from 14,285,714 to 25,000,000 shares of $0.0001 par value share common stock.

As of December 31, 2020,

the Company was authorized to issue 25,000,000 shares of $0.0001 par value per share common stock.

The holders of the Company’s

common stock are entitled to one vote per share.

Option and Stock Issuance Plan

Company’s board of directors and shareholders adopted and approved on July 27, 2017 and September 21, 2017, respectively,

the Stock Option and Stock Issuance Plan (“2017 Plan”), effective September 21, 2017, under which stock options and

restricted stock may be granted to officers, directors, employees and consultants.

Under the 2017 Plan, the Company reserved 153,061

shares of common stock for issuance.

Upon the adoption of our 2019 Equity Incentive Plan, we will no longer issue awards under

the 2017 Plan, but any existing awards granted to our management team and Board of Directors will remain outstanding under the

Company’s board of directors and shareholders approved and adopted on October 28, 2019 the 2019 Equity Incentive Plan (“2019

4 unchanged sentences

Under the 2019 Plan, the Company reserved 214,286 shares of common stock for issuance.

date of the issuance of these consolidated financial statements no shares have been issued under the 2019 Plan.

and Option Valuation

Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model.

term used for warrants and options issued to non-employees is the contractual life.

The Company is utilizing an expected volatility

figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument

being valued, of similarly positioned public companies within its industry.

The risk-free interest rate was determined from the

implied yields from U.S.

Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument

being valued.

September 30, 2018, the Company issued 35,714 restricted common stock of the Company to a consultant with an aggregate

date of the issuance of these consolidated financial statements 188,527 shares have been issued under the 2019 Plan.

adoption of our 2020 Equity Incentive Plan, we will no longer issue awards under the 2019 Plan, but any existing awards granted

to our management team and Board of Directors will remain outstanding under the 2019 Plan.

Company’s board of directors and shareholders approved and adopted on September 16, 2020 the 2020 Equity Incentive Plan

(“2020 Plan”), effective on September 16, 2020 under which stock options and restricted stock may be granted to officers,

directors, employees and consultants in the form of non-qualified stock options, incentive stock-options, stock appreciation rights,

restricted stock awards, restricted stock Units, stock bonus awards, performance compensation awards (including cash bonus awards)

or any combination of the foregoing.

Under the 2020 Plan, the Company reserved 1,750,000 shares of common stock for issuance.

As of the date of the issuance of these consolidated financial statements 178,333 shares have been issued under the 2020 Plan.

& SUBSIDIARIES

to Consolidated Financial Statements

EQUITY, continued

Stock Issuances

Note 10 –

Notes Payable –

15% Senior Secured Convertible Promissory Notes, 12% Secured Convertible Notes, and Other

Convertible for details related to stock issuances in connection with conversions of notes for the year ended December 31, 2019.

February 17, 2020 the Company authorized the issuance of an aggregate of 25,616 shares of common stock to the members of the board

of directors as compensation earned through the end of the fourth quarter of 2019.

March 31, 2020, the Company issued 75,000 shares of common stock of the Company to a consultant that assisted the Company in the

area of investor relations and capital introduction.

April 21, 2020, the Company issued an aggregate of 51,105 shares of common stock in exchange for accrued interest related to convertible

notes that where converted in 2019 in the amount of $357,735.

June 1, 2020, the Company issued 5,000 shares of common stock of the Company to a consultant with an aggregate fair value of $10,150.

June 5, 2020, the Company issued 15,000 shares of common stock of the Company to a digital marketing consultant with an aggregate

fair value of $46,050.

The shares are fully vested on the date of grant.

During the year ended December 31, 2019, the Company

issued an aggregate of 61,426 restricted common stock of the Company to consultants with an aggregate fair value of $430,000.

See Note 15 –

June 24, 2020 the Company authorized the issuance of an aggregate of 4,340 shares of common stock to the members of the board

of directors as compensation earned through the end of the first quarter of 2020.

August 21, 2020, the Company issued an aggregate of 53,571 shares of common stock of the Company to various consultants with an

aggregate fair value of $200,705.

November 5, 2020, the Company issued 53,763 shares of common stock of the Company to a consultant with a fair value of $100,000.

November 30, 2020, the Company issued 82,500 shares of common stock of the Company to a consultant with a fair value of $176,138.

Note 14 –

Commitments and Contingencies –

Consulting Agreements.

Consulting Agreements and Board Compensation for details related to additional

stock issuances for the year ended December 31, 2020 and 2019.

See Note 15 –

Equity –

Closing of Offerings for shares

issued in the offerings and over-allotment.

February 12, 2020, the Company priced its initial public offering of 1,540,000 shares of common stock at a price of $5.00 per

The Company started trading on the Nasdaq Capital Market on February 13, 2020 under the ticker symbol “GRIL”.

The Company closed on the offering on February 18, 2020, yielding proceeds of $6,780,000, net of underwriters and other fees of

Upon closing of the offering the Company issued 123,200 warrants to the underwriters as part of their agreement.

September 10, 2020, the Company priced its public offering (“September Offering”) of 3,294,118 shares of common stock

at a price of $1.70 per share.

The Company closed on the September Offering on September 15, 2020, yielding net proceeds of $4,940,001,

net of underwriters and other fees of $660,000.

Upon closing of the September Offering the Company issued 263,529 warrants to

the underwriters as part of their agreement.

Pursuant to the underwriting agreement for the September Offering the Company granted

the underwriters an option to exercise for 45 days, to purchase up to an additional 494,177 shares of common stock to cover the

over-allotment.

On October 27, 2020, the Company closed on the over-allotment yielding proceeds of $764,399, net of underwrites

and other fees of $75,600 and the Company issued the 494,177 shares of common stock.

& SUBSIDIARIES

1 unchanged sentence

EQUITY, continued

Common Stock, continued

and Option Valuation

Company has computed the fair value of warrants granted and options accrued for as accrued compensation expense using the Black-Scholes

option pricing model.

The expected term used for warrants and options issued to non-employees is the contractual life.

is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent

to the expected term of the instrument being valued, of similarly positioned public companies within its industry.

risk-free interest rate was determined from the implied yields from U.S.

Treasury zero-coupon bonds with a remaining term consistent

with the expected term of the instrument being valued.

options accrued for in accrued compensation expense had a grant date fair value of $46,000 on April 8, 2020.

The Company recorded

a mark to market fair value adjustment of $14,000 on the statement of operations during the years ended December 31, 2020.

The Company has estimated the fair value of the options using the Black-Scholes model using the following assumptions:

volatility of 66.77-112.17%, risk-free rate of 0.12-0.23%, expected term of 0.34 -1 year, expected dividends of

0%, and stock price of $1.42 –

See Note 15 –

Equity –

Options for the issuance of the stock option during

the fourth quarter of 2020.

the year ended December 31, 2019, the Company issued an aggregate of 61,426 restricted common stock of the Company to consultants

with an aggregate fair value of $430,000.

February 18, 2020, the Company issued an aggregate of 216,783 shares of restricted common stock of the Company, with an aggregate

value fair value of $1,083,915, to the executive team pursuant to their employment agreements as part of completing the initial

public offering.

On August 11, 2020, the executive team entered into an agreement individually with the Company to cancel an aggregate

of 216,783 vested shares of restricted common stock of the Company previously issued in the first quarter of 2020 and acknowledge

that no further compensation is due under their employment agreements during the quarter ended September 30, 2020.

of the cancelled restricted common stock, the Company reversed $1,083,893 in stock-based compensation during the quarter ended

September 30, 2020, that was originally recorded during the three months ended March 31, 2020, within general and administrative

expenses related to the cancelled shares in the unaudited consolidated statement of operations.

December 31, 2020, the unamortized value of the restricted common stock was $426.

3 unchanged sentences

December 31, 2020 and December 31, 2019 is presented below:

Average Grant

Date Fair Value

at January 1, 2018

Outstanding at December

at December 31, 2019

Compensation Expense

compensation related to restricted stock issued to employees, directors and consultants amounted to $666,504 and $383,966

for the years ended December 31, 2019 and 2018, respectively, of which $78,455 and $380,871, respectively, was recorded in general

and administrative expenses, $2,700 and $3,094, respectively, was recorded in labor expense with restaurant operating expenses

and $585,349 and $0, respectively, was recorded in consulting expenses.

summary of warrants activity during the years ended December 31, 2019 and 2018 is presented below:

at December 31, 2020

& SUBSIDIARIES

to Consolidated Financial Statements

EQUITY, continued

summary of option activity during the years ended December 31, 2020 and 2019 is presented below:

December 31, 2018

Outstanding, December

December 31, 2019

December 31, 2020

November 27, 2020, the Company issued an aggregate of 300,000 fully vested stock options to consultants with an aggregate fair

value of $118,000.

See Note 14 –

Commitments and Contingencies –

Consulting Agreements for details related

to the stock options issued for the year ended December 31, 2020.

Company has estimated the fair value of the options using the Black-Scholes model using the following assumptions:

the Year Ended

free interest rate

& SUBSIDIARIES

1 unchanged sentence

EQUITY, continued

summary of warrants activity during the years ended December 31, 2020 and 2019 is presented below:

December 31, 2018

December 31, 2019

December 31, 2020

grant date fair value of warrants granted during the years ended December 31, 2020 and 2019 was determined on the date of issuance

7 unchanged sentences

pay or declare any cash dividends on common stock.

The risk-free rates for the expected terms of the stock options are based on

The risk-free rates for the expected terms of the stock warrants are based

Treasury yield curve in effect at the time of the grant.

The Company has not experienced significant exercise activity

on stock options.

Due to the lack of historical information, the Company determined the expected term of its stock option awards

issued using the simplified method.

Due to the lack of historical information, the Company determined the expected term of its warrant awards issued

using the simplified method.

In applying the Black-Scholes option pricing model, the Company used the following assumptions:

For the Years Ended

Risk free interest rate

Expected term (years)

Expected volatility

Expected dividends

the Years Ended

free interest rate

Compensation Expense

compensation related to restricted stock issued to employees, directors and consultants, warrants and options issued to consultants

amounted to $2,806,336 and $666,504 for the years ended December 31, 2020 and 2019, respectively, of which $2,803,716

and $663,804, respectively, was recorded in general and administrative expenses and $2,620 and $2,700, respectively, was recorded

in labor expense within restaurant operating expenses.

& SUBSIDIARIES

to Consolidated Financial Statements

SUBSEQUENT EVENTS

2 unchanged sentences

company-owned restaurant.

On February 12, 2020, the Company priced its

initial public offering of 1,540,000 shares of common stock at a price of $5.00 per share.

The Company started trading on the

Nasdaq Capital Market on February 13, 2020 under the ticker symbol “GRIL”.

The Company closed on the offering on February

18, 2020, yielding proceeds of $6,780,000, net of underwriters and other fees of $920,000.

Upon closing of the offering

the Company issued 123,200 warrants to the underwriters as part of their agreement.

to December 31, 2019 the Company issued a note payable in the principal amount of $150,000.

The notes have an original issue discount

The notes become due in full on or before February 21, 2020.

The note has been repaid as of the date of the filing of

& SUBSIDIARIES

to Consolidated Financial Statements

SUBSEQUENT EVENTS, continued

Service Agreement

February 26, 2020, the Company entered into a Kitchen Services Agreement with a major delivery-only kitchen concept.

Services Agreement(s) provide for five initial locations starting in the Chicago market.

In addition, the Company has placed deposits

for an additional five locations to be determined.

The Kitchen Services Agreement(s) provide the Company with access to the delivery-only

locations for a one-year term with an automatic one-year renewal unless terminated by either party.

The delivery-only locations

are set up for third party delivery and provide that the Company must pay monthly license fees, processing service fees and storage

service fees.

April 21, 2020 the Company authorized the issuance of an aggregate of 25,616 share of common stock to the members of the board

February 3, 2021, the Company issued an aggregate of 20,000 shares of common stock of the Company to a digital marketing consultant

with an aggregate fair value of $42,600.

February 3, 2021, the Company issued an aggregate of 16,126 shares of common stock of the Company to the members of the board

of directors as compensation earned through the end of the fourth quarter of 2020.

February 18, 2020, the Company entered into a professional services agreement with a company to provide advice on business development

of food stores and delivery kitchen operations.

In addition, they will review and advise the Company on potential acquisition

targets, including financial analytics for post-merger entities and provide assistance in preparing pro-forma financial information.

The term of the agreement commences from the effective date on February 18, 2020 and expires on February 18, 2021.

the terms of the agreement the Company agreed to issue 300,000 shares of the Company’s common stock and 100,000 three-year

cashless warrants with an exercise price of $5.00 per share upon signing of the agreement as payment.

February 24, 2020, the Company entered into a Consulting Agreement with consultants with experience in the area of corporate finance,

investor communication and financial and investor public relations.

The term of the agreement is for two months from the effective

date on February 27, 2020 and expires on April 27, 2020.

Pursuant to the terms of the agreement the Company agreed to pay $107,500

in cash per month and to issue 10,000 shares of the Company’s common stock.

In case the Company would not like to extend

the terms of the agreement for an additional month the Company needs to notify the consultants within 5 days of the conclusion

of the 60-day term.

As of the date of the filing of this report the company issued the shares of common stock pursuant to the

April 8, 2020, the Company entered into a Profession Service Agreement with professional in experience in investor outreach and

institutional engagements.

As part of the agreement they will provide capital market insight and interpretation of trading activity.

The term of the agreement commences on the signing date of the agreement and ends on April 1, 2021.

Pursuant to the terms of the

agreement the Company agreed to issue non-qualified stock option to acquire 200,000 shares of the Company’s common stock

exercisable at $2.50 per share exercisable for a period of one year.

The options shall be deemed fully earned upon the signing

of the agreement.

& SUBSIDIARIES

to Consolidated Financial Statements

SUBSEQUENT EVENTS, continued

Claims and Assessments

January 23, 2020, the Company was served a judgment in the amount of $130,185 for a breach of a lease agreement in Chicago, Illinois,

in connection with a Company owned store that was closed in 2018.

As of December 31, 2019, the Company has accrued for the liability

in accounts payable and accrued expenses.

Stock Issuances

April 21, 2020, the Company issued an aggregate of 216,783 shares of common stock of the Company to the executive team pursuant

to their employment agreements as part of completing the initial public offering.

April 21, 2020, the Company issued an aggregate of 51,105 shares of common stock of the Company in exchange for accrued interest

expense on various notes payable of which the principal amount was previously converted into common stock of the Company.

March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues

to spread throughout the United States.

In response to the COVID-19 outbreak, “shelter in place”

orders and other

public health measures have been implemented across much of the United States.

The COVID-19 global pandemic continues to

rapidly evolve.

The Company is continually monitoring the outbreak of COVID-19 and the related business and travel restrictions

and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory,

supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees.

Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the

Company’s operations and liquidity is uncertain as of the date of this report.

While there could ultimately be a material

impact on operations and liquidity of the Company, at the time of issuance, the impact could not be determined.

Due to the impact

the Company have limited our operations as mandated by each state and has temporarily closed five

of our Company owned locations.

In addition, various franchisee locations had to take the same action.

Cares Act Loan

On May 9, 2020, the Company entered into Paycheck Protection Program

Promissory Note and Agreement with Greater Nevada Credit Union, pursuant to which the Company received loan proceeds of $866,300

(the “PPP Loan”).

The PPP Loan was made under, and is subject to the terms and conditions of, the PPP which was established

under the CARES Act and is administered by the U.S.

Small Business Administration.

The term of the PPP Loan is two years

with a maturity date of May 9, 2022 and contains a favorable fixed annual interest rate of 1.00%.

Payments of principal and interest

on the PPP Loan will be deferred for the first six months of the term of the PPP Loan until November 9, 2020.

Principal and interest

are payable monthly and may be prepaid by the Company at any time prior to maturity with no prepayment penalties.

Under the terms

of the CARES Act, recipients can apply for and receive forgiveness for all or a portion of loans granted under the PPP.

Such forgiveness

will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in

the PPP, including, but not limited to, payroll costs (as defined under the PPP) and mortgage interest, rent or utility costs (collectively,

“Qualifying Expenses”), and on the maintenance of employee and compensation levels during the eight-week period following

the funding of the PPP Loan.

The Company intends to use the proceeds of the PPP Loan, when received, for Qualifying Expenses.

no assurance is provided that the Company will be able to obtain forgiveness of the PPP Loan in whole or in part.

February 11, 2021, the Company issued an aggregate of 221,783 shares of common stock of the Company to various executives and

March 31, 2021, the Company authorized the issuance of an aggregate of 12,711 shares of common stock to the members of the board

of directors as compensation earned during the first quarter of 2021.

February 7, 2021, the Company entered into a Consulting Agreement with consultants as a strategy business consultants to provide

the Company with business and marketing advice as needed.

The term of the agreement is for five months from the effective date

on February 7, 2021.

Pursuant to the terms of the agreement the Company agreed to pay the consultant a total of 100,000 shares

of the Company’s common stock.

The Company issued 60,000 shares of common stock upon the effective date of the agreement

with the remaining 40,000 to be issued upon the successful completion of the agreement.

March 8, 2021, the Company entered into a Consulting Agreement with consultants as a strategy business consultants to provide

the Company with financial and business.

The term of the agreement is for five months from the effective date on March 8, 2021.

Pursuant to the terms of the agreement the Company agreed to pay the consultant a total of 100,000 shares of the Company’s

common stock.

The Company issued 70,000 shares of common stock upon the effective date of the agreement with the remaining 30,000

to be issued upon the successful completion of the agreement.

March 22, 2021, the Company entered into a Consulting Agreement with consultants with experience in the area of investor relations

and capital introductions.

The term of the agreement is for six months from the effective date on March 22, 2021.

the terms of the agreement the Company agreed to pay $250,000 in cash for ancillary marketing, to be paid out at the Company’s

In addition, the Company issued 150,000 shares of the Company’s common stock as a commencement incentive which

is fully earned by entering into the agreement.

of Superfit Foods

March 25, 2021, the Company entered into an asset purchase agreement with Superfit Foods, LLC, a Florida limited liability company

and Superfit Foods, LLC, a Nevada limited liability company (the “Superfit Acquisition”).

The purchase price of the

assets and rights was $1,150,000.

The purchase price is payable as follows:

$475,000 that was paid at closing and the remaining

$625,000 paid in 268,240 shares of common stock to be held for six months before being registered.

April 7, 2021, the Company entered into a Securities Purchase Agreement with an accredited investor (the “Securities Purchase

Agreement”) for a private placement (the “Private Placement”) pursuant to which the investor agreed to purchase

from the Company for an aggregate purchase price of approximately $10,000,000 (i) 1,250,000 shares of common stock of the Company

(ii) a common stock purchase warrant to purchase up to 4,115,227 shares of Common Stock (the “Common Warrant”) and

(iii) a pre-funded common stock purchase warrant to purchase up to 2,865,227 shares of Common Stock (the “Pre-Funded Warrant”).

Each share and accompanying Common Warrant is being sold together at a combined offering price of $2.43 per share and Common Warrant,

and each Pre-Funded Warrant and accompanying Common Warrant is being sold together at a combined offering price of $2.42 per Pre-Funded

Warrant and accompanying Common Warrant.

The Pre-Funded Warrant is immediately exercisable, at a nominal exercise price of $0.01

per share, and may be exercised at any time until the Pre-Funded Warrant is fully exercised.

The Common Warrant will have an exercise

price of $2.43 per share, are immediately exercisable and will expire five and one-half (5.5) years from the date of issuance.

The Private Placement closed on April 9, 2021.

Securities Purchase Agreement contains customary representations, warranties and agreements of the Company and the Purchaser and

customary indemnification rights and obligations of the parties thereto.

Pursuant to the Securities Purchase Agreement, the Company

is required to register the resale of the Shares and the shares issuable upon exercise of the Common Warrant and the Pre-Funded

The Company is required to prepare and file a registration statement with the Securities and Exchange Commission within

30 days of the date of the Securities Purchase Agreement and to use commercially reasonable efforts to have the registration statement

declared effective within 90 days of the closing of the Private Placement.

to a placement agency agreement, dated April 6, 2021, between the Company and A.G.P./Alliance Global Partners (the “Placement

Agent”) entered into in connection with the Private Offering, the Placement Agent acted as the sole placement agent for

the Private Placement and the Company has paid customary placement fees to the Placement Agent, including a cash fee equal to

8% of the gross proceeds raised in the Private Placement and a common stock purchase warrant to purchase shares of Common Stock

in an amount equal to 4% of the Shares and shares of Common Stock issuable upon exercise of the Warrants sold in the Private Placement,

the warrant has an exercise price of $2.916 per share and is exercisable commencing six months from the date of the pricing of

the Private Placement for a period of five years after such date.

Pursuant to the Placement Agency Agreement, the Company has

also agreed to reimburse certain expenses of the placement agent incurred in connection with the Private Placement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures