What changed in this filing

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Item 1A. Risk Factors

2022-03-17 compared with 2021-04-15 · 965 added, 1225 removed, 117 unchanged (95% of the section changed)

investment in the Company’s Common Stock involves a high degree of risk.

You should carefully consider the risks described

below as well as other information provided to you in this Annual Report on Form 10-K, including information in the section of

this document entitled “Information Regarding Forward Looking Statements.”

The risks and uncertainties described below

are not the only ones facing us.

Additional risks and uncertainties not presently known to us or that we currently believe are

immaterial may also impair our business operations.

If any of the following risks actually occur, our business, financial condition

or results of operations could be materially adversely affected, the value of our Common Stock could decline, and you may lose

all or part of your investment.

should carefully review the risks described below as they identify important factors that could cause our actual results to differ materially

from our forward-looking statements, expectations and historical trends.

Any of the following risk factors, either by itself or together

with other risk factors, could materially adversely affect our business, results of operations, cash flows and/or financial condition.

Related to Our Business and Industry

novel coronavirus (COVID-19) outbreak has disrupted and is expected to continue to disrupt our business, which has and could continue

to materially affect our operations, financial condition and results of operations for an extended period of time.

pandemic novel coronavirus (COVID-19) outbreak, federal, state and local government responses to COVID-19 and our Company’s

responses to the outbreak have all disrupted and will continue to disrupt our business.

In the United States, individuals are

being encouraged to practice social distancing, restricted from gathering in groups and in some areas, have been placed

on complete restriction from non-essential movements outside of their homes.

As 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 four 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 campus.

As of the date of the filing of this report the Company re-opened

three of the nine temporarily closed locations and permanently closed two underperforming locations.

Commencing in the second

quarter of 2020 the Company provided royalty relief to its franchisees 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 the franchise locations 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.

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.

The COVID-19 outbreak and these responses have affected and will continue to adversely affect our guest traffic, sales and

operating costs and we cannot predict how long the outbreak will last or what other government responses may occur.

COVID-19 outbreak has also adversely affected our ability to open new restaurants.

Due to the uncertainty in the economy and to

preserve liquidity, we have paused nearly all construction of new restaurants.

These changes may materially adversely affect our

ability to grow our business, particularly if these construction pauses are in place for a significant amount of time.

the business interruptions caused by COVID-19 last longer than we expect, we will be required to seek other sources of liquidity.

The COVID-19 outbreak is adversely affecting the availability of liquidity generally in the credit and equity markets, and there

can be no guarantee that additional liquidity will be readily available or available on favorable terms, especially the longer

the COVID-19 outbreak lasts.

restaurant operations could be further disrupted if large numbers of our employees are diagnosed with COVID-19.

If a significant

percentage of our workforce is unable to work, whether because of illness, quarantine, limitations on travel or other government

restrictions in connection with COVID-19, our operations may be negatively impacted, potentially materially adversely affecting

our liquidity, financial condition or results of operations.

suppliers could be adversely impacted by the COVID-19 outbreak.

If our suppliers’

employees are unable to work, whether

because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, we could face

shortages of food items or other supplies at our restaurants and our operations and sales could be adversely impacted by such

supply interruptions.

government regulations or legislation as a result of COVID-19 in addition to decisions we have made and may make in the future

relating to the compensation of and benefit offerings for our restaurant team members could also have an adverse effect on our

We cannot predict the types of additional government regulations or legislation that may be passed relating to employee

compensation as a result of the COVID-19 outbreak.

We have implemented paid sick leave, emergency pay policies and taken other

compensation and benefit actions to support our restaurant team members during the COVID-19 business interruption, but those actions

may not be sufficient to compensate our team members for the entire duration of any business interruption resulting from COVID-19.

Those team members might seek and find other employment during that interruption, which could materially adversely affect our

ability to properly staff and reopen our restaurants with experienced team members when the business interruptions caused by COVID-19

abate or end.

have a history of operating losses and our auditors have indicated that there is a substantial doubt about our ability to continue

as a going concern.

date, we have not been profitable and have incurred significant losses and cash flow deficits.

For the years ended December 31,

2020 and 2019, we reported net losses of $10,099,105 and $28,385,044, respectively, and negative cash flow from operating

activities of $7,785,873 and $4,504,226, respectively.

As of December 31, 2020, we had an accumulated deficit of $63,193,707.

We anticipate that we will continue to report losses and negative cash flow.

As a result of these net losses and cash flow

deficits and other factors, our independent registered public accountants issued an audit opinion with respect to our financial

statements for the two years ended December 31, 2020 that indicated that there is a substantial doubt about our ability to continue

as a going concern.

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

These adjustments

would likely include substantial impairment of the carrying amount of our assets and potential contingent liabilities that may

arise if we are unable to fulfill various operational commitments.

In addition, the value of our securities would be greatly impaired.

Our ability to continue as a going concern is dependent upon generating sufficient cash flow from operations and obtaining additional

capital and financing.

If our ability to generate cash flow from operations is delayed or reduced and we are unable to raise additional

funding from other sources, we may be unable to continue in business.

For further discussion about our ability to continue as

a going concern and our plan for future liquidity, see “Management’s Discussion and Analysis of Financial Condition

and Results of Operations”

will need additional capital to fund our operations, which, if obtained, could result in substantial dilution or significant debt

service obligations.

We may not be able to obtain additional capital on commercially reasonable terms, which could adversely affect

our liquidity and financial position.

December 31, 2020, Muscle Maker had a cash balance of approximately $4,195,932, a working capital deficit of approximately $1,383,568,

and an accumulated deficit of approximately $63,193,707.

In order to satisfy the Company’s monthly expenses and

continue in operation through December 31, 2021, the Company closed on a public offering on February 12, 2020 and September 10,

2020, in which we raised aggregate net proceeds of $11,720,001.

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.

Even if we are able to substantially increase revenues

and reduce operating expenses, we may need to raise additional capital.

In order to continue operating, we may need to obtain

additional financing, either through borrowings, private placements, public offerings, or some type of business combination, such

as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits.

We may be unable to acquire

the additional funding necessary to continue operating.

Accordingly, if we are unable to generate adequate cash from operations,

and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a

portion of our assets, enter into a business combination, or reduce or eliminate operations.

These possibilities, to the extent

available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all

novel coronavirus (COVID-19) global pandemic has had, and may continue to have, an adverse effect on our business and results of operations.

related to COVID-19, which was declared a global pandemic by the World Health Organization in March 2020, have adversely impacted, and

may continue to adversely impact our business and results of operations.

The impacts of COVID-19 have included the loss of revenues due

to store closures, reduced store-level operations, full or partial dining room closures and other restrictions on our business and operations.

During 2021, the overall adverse impact of COVID-19 on our operations was less significant than in 2020, but we continued to see negative

impacts as of the end of 2021 due to COVID-19 outbreaks and resulting government restrictions limiting mobility, difficulty in hiring

employees, availability of key ingredients and inflationary pressures across multiple parts of our business.

for our restaurants that prominently feature carryout and delivery options, the pandemic has in many cases contributed to an increase

in sales since the onset of the pandemic.

If the impact of the pandemic continues to recede and the restaurant industry in general returns

to more normal operations, the benefits to sales experienced by certain of our restaurants could wane and our results could be negatively

and our franchisees have made operational changes intended to safeguard employees and customers in response to COVID-19.

These operational

changes have increased and may continue to increase restaurant operating costs and impact restaurant-level margins and return on invested

Our and our franchisees’ restaurants have also experienced, and may continue to experience, interruptions of food and

other supplies as well as labor shortages.

In addition, the COVID-19 pandemic has required and may continue to require us to implement

certain precautionary measures, such as in relation to vaccinations, testing and face coverings, which could adversely impact our operations,

employee retention and satisfaction, and the willingness of customers to visit our restaurants.

success is heavily reliant on our Concepts’ franchisees, and the COVID-19 pandemic has caused and may continue to cause financial

distress for certain franchisees, particularly those located in areas most significantly impacted by the COVID-19 pandemic.

of this distress, certain of our franchisees have been unable to, or in the future may be unable to, meet their financial obligations

to us as they come due, including the payment of royalties, or other amounts due to the Company.

Additionally, certain of our franchisees

have been unable to, or in the future may be unable to make payments to landlords, distributors and key suppliers, as well as payments

to service any debt they may have outstanding.

Franchisee financial distress has also led to, and may continue to lead to, permanent

store closures and delayed or reduced new franchisee development, which may further harm our results and liquidity.

are unable to fully predict the impact that COVID-19 will have on our and our franchisees’ operations going forward due to various

uncertainties, including the severity and duration of the pandemic, the timing, availability acceptance and effectiveness of

medical treatments and vaccines, the spread of potentially more contagious and/or virulent forms of COVID-19, including variants that

may be more resistant to currently available vaccines and treatments, the extent to which COVID-19 may cause customers to continue to

be reluctant to return to in-restaurant dining or otherwise change their consumption patterns (including after the COVID-19 pandemic

has ended), actions that may be taken by governmental authorities, and the extent to which ongoing governmental restrictions in certain

regions will be lifted, and the ongoing impact of the pandemic on economic conditions in the U.S.

and globally.

Moreover, if conditions

related to the COVID-19 pandemic result in significant disruptions to capital and financial markets, or negatively impact our credit

ratings, our cost of borrowing, our ability to access capital on favorable terms and our overall liquidity and capital structure could

be adversely impacted.

pressures across all services, equipment, commodities, labor, rent and other areas of the business may cause a negative impact on our

financial results if the Company is not able to pass these increased costs in the form of price increases to consumers or find alternative

options to reduce costs.

global supply chain is currently experiencing extensive inflationary pressures across most segments of the economy.

While these increases

may be temporary, we may have to implement price increases in order to maintain acceptable margins.

We have no ability to predict how

long these increased costs will last and if consumers will be able or willing to accept retail price increases, decreased portion sizes,

alternative ingredients or other measures to offset the overall rise in our cost structure.

Without being able to pass along these increases

in costs to consumers, the Company may experience a negative impact on our margins.

may need additional capital to fund our operations, which, if obtained, could result in substantial dilution or significant debt service

We may not be able to obtain additional capital on commercially reasonable terms, which could adversely affect our liquidity

and financial position.

order to continue operating, we may need to obtain additional financing, either through borrowings, private placements, public offerings,

or some type of business combination, such as a merger, or buyout, and there can be no assurance that we will be successful in such pursuits.

We may be unable to acquire the additional funding necessary to continue operating.

Accordingly, if we are unable to generate adequate

cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business

or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations.

These possibilities, to the

extent available, may be on terms that result in significant dilution to our shareholders or that result in our shareholders losing all

of their investment in our Company.

we are able to raise additional capital, we do not know what the terms of any such capital raising would be.

In addition, any

future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially

below prices at which our shares currently trade.

Our inability to raise capital could require us to significantly curtail or

terminate our operations.

we need to raise additional capital, we do not know what the terms of any such capital raising would be.

In addition, any future sale

of our equity securities could dilute the ownership and control of your shares and could be at prices substantially below prices at which

our shares currently trade.

We may seek to increase our cash reserves through the sale of additional equity or debt securities.

The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial

dilution to our shareholders.

The incurrence of indebtedness would result in increased debt service obligations and could result

in operating and financing covenants that would restrict our operations and liquidity.

In addition, our ability to obtain additional

capital on acceptable terms is subject to a variety of uncertainties.

We cannot assure you that financing will be available in

amounts or on terms acceptable to us, if at all.

Any failure to raise additional funds on favorable terms could have a material

adverse effect on our liquidity and financial condition.

of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our

shareholders.

The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing

covenants that would restrict our operations and liquidity.

In addition, our ability to obtain additional capital on acceptable terms

is subject to a variety of uncertainties.

We cannot assure you that financing will be available in amounts or on terms acceptable to

us, if at all.

Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial

face intense competition in our markets, which could negatively impact our business.

restaurant industry is intensely competitive, and we compete with many well-established food service companies on the basis of

product choice, quality, affordability, service and location.

We expect competition in each of our markets to continue to be intense

because consumer trends are favoring limited-service restaurants that offer healthy-inspired menu items made with better quality

products, and many limited service restaurants are responding to these trends.

With few barriers to entry, our competitors include

a variety of independent local operators, in addition to well-capitalized regional, national and international restaurant chains

and franchises, and new competitors may emerge at any time.

Furthermore, delivery aggregators and food delivery services provide

consumers with convenient access to a broad range of competing restaurant chains and food retailers, particularly in urbanized

Each of our brands also competes for qualified franchisees, suitable restaurant locations and management and personnel.

Our ability to compete will depend on the success of our plans to improve existing products, to develop and roll-out new products,

to effectively respond to consumer preferences and to manage the complexity of restaurant operations as well as the impact of

our competitors’

In addition, our long-term success will depend on our ability to strengthen our customers’

digital experience through expanded mobile ordering, delivery and social interaction.

Some of our competitors have substantially

greater financial resources, higher revenues and greater economies of scale than we do.

These advantages may allow them to implement

their operational strategies more quickly or effectively than we can or benefit from changes in technologies, which could harm

our competitive position.

These competitive advantages may be exacerbated in a difficult economy, thereby permitting our competitors

to gain market share.

There can be no assurance that we will be able to successfully respond to changing consumer preferences,

including with respect to new technologies and alternative methods of delivery.

If we are unable to maintain our competitive position,

we could experience lower demand for products, downward pressure on prices, reduced margins, an inability to take advantage of

new business opportunities, a loss of market share, reduced franchisee profitability and an inability to attract qualified franchisees

in the future.

Any of these competitive factors may materially adversely affect our business, financial condition or results of

ability to continue to expand our digital business and delivery orders is uncertain, and these new business lines are subject

digital, delivery and catering/meal plan sales represent a significant portion of sales in many of our restaurants and expanding

Consumer preferences and competitors are relying more and more heavily on digital and third-party delivery services,

especially in urban locations.

We rely on third party providers to fulfill delivery orders, and the ordering and payment platforms

used by these third parties, or our mobile app or online ordering system, could be damaged or interrupted by technological failures,

user errors, cyber-attacks or other factors, which may adversely impact our sales through these channels and could negatively

impact our brand.

Additionally, our delivery partners are responsible for order fulfillment and may make errors or fail to make

timely deliveries, leading to customer disappointment that may negatively impact our brand.

We also incur additional costs associated

with using third party service providers to fulfil these digital orders.

Moreover, the third-party restaurant delivery business

is intensely competitive, with a number of players competing for market share, online traffic, capital, and delivery drivers and

other people resources.

The third-party delivery services with which we work may struggle to compete effectively, and if they

were to cease or curtail operations or fail to provide timely delivery services in a cost-effective manner, or if they give greater

priority on their platforms to our competitors, our delivery business may be negatively impacted.

Digital and delivery offerings

also increase the risk of illnesses associated with our food because the food is transported and/or served by third parties in

conditions we cannot control.

all of these offerings are relatively new, it is difficult for us to anticipate the level of sales they may generate.

result in operational challenges, both in fulfilling orders made through these channels and in operating our restaurants as we

balance fulfillment of these orders with service of our traditional in-restaurant guests as well.

Any such operational challenges

may negatively impact the customer experience associated with our digital or delivery orders, the guest experience for our traditional

in-restaurant business, or both.

These factors may adversely impact our sales and our brand reputation.

restaurant industry is intensely competitive, and we compete with many well-established food service companies on the basis of product

choice, quality, affordability, service and location.

We expect competition in each of our markets to continue to be intense because

consumer trends are favoring limited-service restaurants that offer healthy-inspired menu items made with better quality products, and

many limited-service restaurants are responding to these trends.

With few barriers to entry, our competitors include a variety

of independent local operators, in addition to well-capitalized regional, national and international restaurant chains, meal prep and

franchises, and new competitors may emerge at any time.

Furthermore, delivery aggregators and food delivery services provide consumers

with convenient access to a broad range of competing restaurant chains and food retailers, particularly in urbanized areas.

brands also competes for qualified franchisees, suitable restaurant locations and management and personnel.

Our ability to compete will

depend on the success of our plans to improve existing products, to develop and roll-out new products, to effectively respond to consumer

preferences and to manage the complexity of restaurant operations as well as the impact of our competitors’ actions.

our long-term success will depend on our ability to strengthen our customers’ digital experience through expanded mobile ordering,

delivery and social interaction.

Some of our competitors have substantially greater financial resources, higher revenues and greater

economies of scale than we do.

These advantages may allow them to implement their operational strategies more quickly or effectively

than we can or benefit from changes in technologies, which could harm our competitive position.

These competitive advantages may be exacerbated

in a difficult economy, thereby permitting our competitors to gain market share.

There can be no assurance that we will be able to successfully

respond to changing consumer preferences, including with respect to new technologies and alternative methods of delivery.

If we are unable

to maintain our competitive position, we could experience lower demand for products, downward pressure on prices, reduced margins, an

inability to take advantage of new business opportunities, a loss of market share, reduced franchisee profitability and an inability

to attract qualified franchisees in the future.

Any of these competitive factors may materially adversely affect our business, financial

condition or results of operations.

are risks associated with our increasing dependence on digital commerce platforms to maintain and grow sales.

are increasingly using e-commerce websites, apps and apps owned by third-party delivery aggregators and third-party mobile payment processors,

to order and pay for our concepts’ products.

Moreover, the COVID-19 pandemic has resulted in an increase in the use of third-party

delivery services by our concepts.

Many restaurants in each of our concepts now offer consumers the ability to have the concept’s

food delivered through third-party delivery services.

As a result, our concepts and our concepts’ franchisees are increasingly

reliant on digital ordering and payment as a sales channel and our business could be negatively impacted if we are unable to successfully

implement, execute or maintain our consumer-facing initiatives.

If the third-party apps or aggregators that we utilize for delivery,

cease or curtail their operations, fail to maintain sufficient labor force to satisfy demand, materially change fees, access or visibility

to our products or give greater priority or promotions on their platforms to our competitors, our business may be negatively impacted.

These digital ordering and payment platforms also could be damaged or interrupted by power loss, technological failures, user errors,

cyber-attacks, other forms of sabotage, inclement weather or natural disasters.

The digital ordering platforms relied upon by our concepts

have experienced interruptions and could experience further interruptions, which could limit or delay customers’ ability to order

through such platforms or make customers less inclined to return to such platforms.

is difficult for us to anticipate the level of sales from digital platforms may generate.

That may result in operational challenges,

both in fulfilling orders made through these channels and in operating our restaurants as we balance fulfillment of these orders with

service of our traditional in-restaurant guests as well.

Any such operational challenges may negatively impact the customer experience

associated with our digital or delivery orders, the guest experience for our traditional in-restaurant business, or both.

These factors

may adversely impact our sales and our brand reputation.

Our SuperFit Foods division relies 100% on web-based ordering through

the superfitfoods.com website.

are vulnerable to changes in consumer preferences and economic conditions that could harm our business, financial condition, results

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and local economic conditions and demographic trends.

Factors such as traffic patterns, weather, fuel prices, local demographics,

troop deployments or base closures specific to our military locations and the type, number and locations of competing restaurants

may adversely affect the performances of individual locations.

In addition, economic downturns, wage rates, health insurance costs,

third-party delivery services and fees, inflation or increased food or energy costs could harm the restaurant industry in general

and our locations in particular.

Adverse changes in any of these factors could reduce consumer traffic or impose practical limits

on pricing that could harm our business, financial condition, results of operations and cash flow.

There can be no assurance that

consumers will continue to regard healthy-inspired fast food favorably or that we will be able to develop new menu items that

appeal to consumer preferences.

Our business, financial condition and results of operations depend in part on our ability to anticipate,

identify and respond to changing consumer preferences and economic conditions.

In addition, the restaurant industry is currently

under heightened legal and legislative scrutiny related to menu labeling and resulting from the perception that the practices

of restaurant companies have contributed to nutritional, caloric intake, obesity or other health concerns of their guests.

we are unable to adapt to changes in consumer preferences and trends, we may lose customers and our revenues may decline or our

costs to produce our products could significantly increase.

growth strategy depends in part on opening new restaurants in existing and new markets, including non-traditional locations such

as universities, office buildings, ghost kitchens, military bases, airports or casinos and expanding our franchise system.

may be unsuccessful in opening new company-operated or franchised restaurants or establishing new markets, which could adversely

affect our growth.

of the key means to achieving our growth strategy will be through opening new restaurants and operating those restaurants on a

profitable basis.

Our ability to open new restaurants is dependent upon a number of factors, many of which are beyond our control,

including our and our franchisees’

Factors such as traffic patterns, weather, fuel prices, local demographics, location

closures specific to our military and university locations and the type, number and locations of competing restaurants may adversely

affect the performances of individual locations.

In addition, economic downturns, wage rates, health insurance costs, third-party delivery

services and fees, supplies of key ingredients especially tuna and salmon at our Pokemoto division or chicken at our Muscle Maker Grill locations, inflation or increased food or energy costs could harm the restaurant industry in general and our locations in

Adverse changes in any of these factors could reduce consumer traffic or impose practical limits on pricing that could harm

our business, financial condition, results of operations and cash flow.

There can be no assurance that consumers will continue to regard

healthy-inspired fast food favorably or that we will be able to develop new menu items that appeal to consumer preferences.

Our business,

financial condition and results of operations depend in part on our ability to anticipate, identify and respond to changing consumer

preferences and economic conditions.

In addition, the restaurant industry is currently under heightened legal and legislative scrutiny

related to menu labeling and resulting from the perception that the practices of restaurant companies have contributed to nutritional,

caloric intake, obesity or other health concerns of their guests.

If we are unable to adapt to changes in consumer preferences and trends,

we may lose customers and our revenues may decline or our costs to produce our products could significantly increase.

growth strategy depends in part on opening new restaurants in existing and new markets and expanding our franchise system, especially

in our Pokemoto division.

We may be unsuccessful in opening new Company-operated or franchised restaurants or establishing new markets,

which could adversely affect our growth .

of the key means to achieving our growth strategy will be through opening new restaurants to seed the market and selling franchises.

Our ability to open new restaurants and sell franchises is dependent upon a number of factors, many of which are beyond our control,

including our and our franchisees’ ability to:

available and suitable restaurant sites;

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acceptable agreements regarding the lease or purchase of locations;

or have available the financing required to acquire and operate a restaurant, including construction and opening costs, which

includes access to build-to-suit leases and equipment financing leases at favorable interest and capitalization rates;

or have available the financing required to acquire and operate a restaurant, including construction and opening costs, which includes

access to build-to-suit leases and equipment financing leases at favorable interest and capitalization rates;

to unforeseen engineering or environmental problems with leased premises;

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train and retain the skilled management and other employees necessary to meet staffing needs;

in a timely manner and for an acceptable cost, required licenses, permits and regulatory approvals and respond effectively

to any changes in local, state or federal law and regulations that adversely affect our and our franchisees’

ability to open new restaurants;

in a timely manner and for an acceptable cost, required licenses, permits and regulatory approvals and respond effectively to any

changes in local, state or federal law and regulations that adversely affect our and our franchisees’ costs or ability to open

new restaurants;

construction and equipment cost increases for new restaurants.

is no guarantee that a sufficient number of suitable restaurant sites will be available in desirable areas or on terms that are

acceptable to us in order to achieve our growth plan.

If we are unable to open new restaurants or sign new franchisees, or if

existing franchisees do not open new restaurants, or if restaurant openings are significantly delayed, our revenues or earnings

growth could be adversely affected, and our business negatively affected.

is no guarantee that a sufficient number of suitable restaurant sites will be available in desirable areas or on terms that are acceptable

to us in order to achieve our growth plan.

If we are unable to open new restaurants or sign new franchisees, or if existing franchisees

do not open new restaurants, or if restaurant openings are significantly delayed, our revenues or earnings growth could be adversely

affected, and our business negatively affected.

part of our long-term growth strategy, we may enter into geographic markets in which we have little or no prior operating or franchising

experience through Company-operated restaurant growth and through franchise development agreements.

The challenges of entering

new markets include, but are not limited to:

The challenges of entering new markets

include, but are not limited to:

difficulties in hiring experienced personnel;

unfamiliarity with local real estate

markets and demographics;

unfamiliarity with local real estate markets and demographics;

food distribution networks;

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operational support efficiencies;

unfamiliarity with our brand;

and different competitive and economic conditions, consumer tastes and discretionary spending patterns

that are more difficult to predict or satisfy than in our existing markets.

Consumer recognition of our brand has been important

in the success of company-operated and franchised restaurants in our existing markets.

Restaurants we open in new markets may

take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, occupancy and operating

costs than existing restaurants, thereby affecting our overall profitability.

Any failure on our part to recognize or respond

to these challenges may adversely affect the success of any new restaurants.

Expanding our franchise system could require the

implementation, expense and successful management of enhanced business support systems, management information systems and financial

controls as well as additional staffing, franchise support and capital expenditures and working capital.

to brand recognition and logistical synergies, as part of our growth strategy, we also intend to open new restaurants in areas

where we have existing restaurants.

The operating results and comparable restaurant sales for our restaurants could be adversely

affected due to close proximity with our other restaurants and market saturation.

consumer unfamiliarity with our brand;

and different competitive and economic conditions, consumer tastes and discretionary spending patterns that are more difficult to predict

or satisfy than in our existing markets.

Consumer recognition of our brand has been important to Company-operated and franchised restaurants

in our existing markets.

Restaurants we open in new markets may take longer to reach expected sales and profit levels on a consistent

basis and may have higher construction, occupancy and operating costs than existing restaurants, thereby affecting our overall profitability.

Any failure on our part to recognize or respond to these challenges may adversely affect the success of any new restaurants.

our franchise system could require the implementation, expense and successful management of enhanced business support systems, management

information systems and financial controls as well as additional staffing, franchise support and capital expenditures and working capital.

to brand recognition and logistical synergies, as part of our growth strategy, we also intend to open new restaurants in areas where

we have existing restaurants.

The operating results and comparable restaurant sales for our restaurants could be adversely affected due

to close proximity with our other restaurants and market saturation.

restaurants, once opened, may not be profitable or may close.

of our restaurants open with an initial start-up period of higher-than-normal sales volumes, which subsequently decrease to stabilized

In new markets, the length of time before average sales for new restaurants stabilize is less predictable and can be longer

as a result of our limited knowledge of these markets and consumers’

limited awareness of our brand.

In addition, our average

restaurant revenues and comparable restaurant sales may not increase at the rates achieved over the past several years.

to operate new restaurants profitably and increase average restaurant revenues and comparable restaurant sales will depend on

many factors, some of which are beyond our control, including:

In new markets, the length of time before average sales for new restaurants to stabilize is less predictable and can be longer

as a result of our limited knowledge of these markets and consumers’ limited awareness of our brand.

In addition, our average restaurant

revenues and comparable restaurant sales may not increase at the rates achieved over the past several years.

Our ability to operate new

restaurants profitably and increase average restaurant revenues and comparable restaurant sales will depend on many factors, some of

which are beyond our control, including:

awareness and understanding of our brand;

deployments, reductions or closures of our military base locations;

economic conditions, which can affect restaurant traffic, local labor costs and prices we pay for the food products and other

supplies we use;

of our university locations;

equipment, commodity and other resource availability;

economic conditions, which can affect restaurant traffic, local labor costs and prices we pay for the food products and other supplies

patterns and food preferences that may differ from region to region;

9 unchanged sentences

In addition, an inability

to achieve our expected average restaurant revenues in both company owned and franchise locations, would have a material adverse

effect on our business, financial condition and results of operations.

new restaurants in existing markets may negatively impact sales at our and our franchisees’

existing restaurants.

consumer target area of our and our franchisees’

restaurants varies by location, depending on a number of factors, including

population density, other local retail and business attractions, area demographics and geography.

As a result, the opening of

a new restaurant in or near markets in which we or our franchisees’

already have restaurants could adversely impact sales

at these existing restaurants.

Existing restaurants could also make it more difficult to build our and our franchisees’

consumer base for a new restaurant in the same market.

Our core business strategy does not entail opening new restaurants that

we believe will materially affect sales at our or our franchisees’

existing restaurants.

However, we cannot guarantee there

will not be a significant impact in some cases, and we may selectively open new restaurants in and around areas of existing restaurants

that are operating at or near capacity to effectively serve our customers.

Sales cannibalization between our restaurants may become

significant in the future as we continue to expand our operations and could affect our sales growth, which could, in turn, materially

and adversely affect our business, financial condition and results of operations.

sales growth and ability to achieve profitability could be adversely affected if comparable restaurant sales are less than we

to achieve our expected average restaurant revenues in both Company-owned and franchise locations, would have a material adverse effect

on our business, financial condition and results of operations.

new restaurants in existing markets may negatively impact sales at our and our franchisees’ existing restaurants.

consumer target area of our and our franchisees’ restaurants varies by location, depending on a number of factors, including population

density, other local retail and business attractions, area demographics and geography.

As a result, the opening of a new restaurant in

or near markets in which we or our franchisees’ already have restaurants could adversely impact sales at these existing restaurants.

Existing restaurants could also make it more difficult to build our and our franchisees’ consumer base for a new restaurant in

the same market.

Our core business strategy does not entail opening new restaurants that we believe will materially affect sales at our

or our franchisees’ existing restaurants.

However, we cannot guarantee there will not be a significant impact in some cases, and

we may selectively open new restaurants in and around areas of existing restaurants that are operating at or near capacity to effectively

serve our customers.

Sales cannibalization between our restaurants may become significant in the future as we continue to expand our

operations and could affect our sales growth, which could, in turn, materially and adversely affect our business, financial condition

and results of operations.

sales growth and ability to achieve profitability could be adversely affected if comparable restaurant sales are less than we expect.

level of comparable restaurant sales, which reflect the change in year-over-year sales for restaurants in the fiscal month following

15 months of operation using a mid-month convention, will affect our sales growth and will continue to be a critical factor affecting

our ability to generate profits because the profit margin on comparable restaurant sales is generally higher than the profit margin

on new restaurant sales.

While we have experienced negative comparable same store sales of 12% during 2019 and 57% during

2020, we have developed new sales and marketing efforts including new menu strategy/evolution, new marketing initiatives designed

to increase brand awareness, new operating platforms which improve speed of service and other tactics with the goal of providing

positive same store sales in future years.

Our ability to increase comparable restaurant sales depends in part on our ability

to successfully implement these initiatives.

It is possible such initiatives will not be successful, that we will not achieve

our target comparable restaurant sales growth or that the change in comparable restaurant sales could be negative, which may cause

a decrease in sales growth and ability to achieve profitability that would have a material adverse effect on our business, financial

condition and results of operations.

marketing programs may not be successful, and our new menu items, advertising campaigns and restaurant designs or remodels may

not generate increased sales or profits.

incur costs and expend other resources in our marketing efforts on new menu items, advertising campaigns and restaurant designs

and remodels to raise brand awareness and attract and retain customers.

These initiatives may not be successful, resulting in

expenses incurred without the benefit of higher revenues.

Additionally, some of our competitors have greater financial resources,

which enable them to spend significantly more on marketing and advertising and other initiatives than we are able to.

competitors increase spending on marketing and advertising and other initiatives or our marketing funds decrease for any reason,

or should our advertising, promotions, new menu items and restaurant designs and remodels be less effective than our competitors,

there could be a material adverse effect on our results of operations and financial condition.

rely on only one company to distribute substantially all of our food and supplies to company-operated and franchised restaurants,

and on a limited number of companies, and, in some cases, a sole company, to supply certain products, supplies and ingredients

to our distributor.

Failure to receive timely deliveries of food or other supplies could result in a loss of revenues and materially

and adversely impact our operations.

company-operated restaurants and franchisees’

ability to maintain consistent quality menu items and prices significantly

depends upon our ability to acquire quality food products from reliable sources in accordance with our specifications on a timely

Shortages or interruptions in the supply of food products caused by unanticipated demand, problems in production or distribution,

contamination of food products, an outbreak of protein-based diseases, inclement weather, fuel supplies, governmental actions

or other conditions could materially adversely affect the availability, quality and cost of ingredients, which would adversely

affect our business, financial condition, results of operations and cash flows.

We have contracts with a limited number of suppliers,

and, in some cases, a sole supplier, for certain products, supplies and ingredients.

If that distributor or any supplier fails

to perform as anticipated or seeks to terminate agreements with us, or if there is any disruption in any of our supply or distribution

relationships for any reason, our business, financial condition, results of operations and cash flows could be materially adversely

If we or our franchisees temporarily close a restaurant or remove popular items from a restaurant’s menu due to

a supply shortage, that restaurant may experience a significant reduction in revenues during the time affected by the shortage

and thereafter if our customers change their dining habits as a result.

in food and supply costs or failure to receive frequent deliveries of food ingredients and other supplies could have an adverse

effect on our business, financial condition and results of operations.

profitability depends in part on our ability to anticipate and react to changes in food and supply costs, and our ability to maintain

our menu depends in part on our ability to acquire ingredients that meet specifications from reliable suppliers.

interruptions in the availability of certain supplies caused by unanticipated demand, problems in production or distribution,

food contamination, pandemic such as the COVID 19, inclement weather or other conditions could adversely affect the availability,

quality and cost of our ingredients, which could harm our operations.

Any increase in the prices of the food products most critical

to our menu, such as chicken, seafood, beef, fresh produce, dairy products, packaging and other proteins, could have a material

adverse effect on our results of operations.

Although we try to manage the impact that these fluctuations have on our operating

results, we remain susceptible to increases in food costs as a result of factors beyond our control, such as general economic

conditions, seasonal fluctuations, weather conditions, demand, food safety concerns, generalized infectious diseases, product

recalls, fuel prices and other government regulations.

Therefore, material increases in the prices of the ingredients most critical

to our menu could adversely affect our operating results or cause us to consider changes to our product delivery strategy and

adjustments to our menu pricing.

our ability to generate profits because the profit margin on comparable restaurant sales is generally higher than the profit margin on

new restaurant sales.

While we have not experienced negative comparable same store sales during 2021, we will continue to develop

new sales and marketing efforts including new menu strategy/evolution, new marketing initiatives designed to increase brand awareness,

new operating platforms which improve speed of service and other tactics with the goal of providing positive same store sales in future

Our ability to increase comparable restaurant sales depends in part on our ability to successfully implement these initiatives.

It is possible such initiatives will not be successful, that we will not achieve our target comparable restaurant sales growth or that

the change in comparable restaurant sales could be negative, which may cause a decrease in sales growth and ability to achieve profitability

that would have a material adverse effect on our business, financial condition and results of operations.

marketing programs may not be successful, and our new menu items, advertising campaigns and restaurant designs or remodels may not generate

increased sales or profits.

incur costs and expend other resources in our marketing efforts on new menu items, advertising campaigns and restaurant designs and remodels

to raise brand awareness and attract and retain customers.

These initiatives may not be successful, resulting in expenses incurred without

the benefit of higher revenues.

Additionally, some of our competitors have greater financial resources, which enable them to spend significantly

more on marketing and advertising and other initiatives than we are able to.

Should our competitors increase spending on marketing and

advertising and other initiatives or our marketing funds decrease for any reason, or should our advertising, promotions, new menu items

and restaurant designs and remodels be less effective than our competitors, there could be a material adverse effect on our results of

operations and financial condition.

Our SuperFit Foods division relies heavily on web based, social media and local marketing to generate

The meal prep industry has a high cost of customer acquisition and our marketing efforts may not prove to be successful

in generating new clients.

to receive timely deliveries of food or other supplies could result in a loss of revenues and materially and adversely impact our operations.

Company-operated restaurants and franchisees’ ability to maintain consistent quality menu items and prices significantly depends

upon our ability to acquire quality food products from reliable sources in accordance with our specifications on a timely basis.

or interruptions in the supply of food products caused by unanticipated demand, worker shortages, inflation, problems in production or

distribution, contamination of food products, an outbreak of protein-based diseases, inclement weather, fuel supplies, governmental actions

or other conditions could materially adversely affect the availability, quality and cost of ingredients, which would adversely affect

our business, financial condition, results of operations and cash flows.

We have contracts with a limited number of suppliers, and, in

some cases, a sole supplier, for certain products, supplies and ingredients.

If that distributor or any supplier fails to perform as

anticipated or seeks to terminate agreements with us, or if there is any disruption in any of our supply or distribution relationships

for any reason, our business, financial condition, results of operations and cash flows could be materially adversely affected.

or our franchisees temporarily close a restaurant or remove popular items from a restaurant’s menu due to a supply shortage, that

restaurant may experience a significant reduction in revenues during the time affected by the shortage and thereafter if our customers

change their dining habits as a result.

in food and supply costs or failure to receive frequent deliveries of food ingredients and other supplies could have an adverse effect

on our business, financial condition and results of operations.

we are currently generating a net loss, our future profitability, if any, depends in part on our ability to anticipate and react

to changes in food and supply costs, and our ability to maintain our menu depends in part on our ability to acquire ingredients that

meet specifications from reliable suppliers.

Shortages or interruptions in the availability of certain supplies caused by unanticipated

demand, problems in production or distribution, food contamination, pandemics such as the COVID 19, inclement weather, world

conflicts or other conditions could adversely affect the availability, quality and cost of our ingredients, which could harm our

Any increase in the prices of the food products most critical to our menu, such as chicken, seafood, beef, fresh produce,

dairy products, packaging and other proteins, could have a material adverse effect on our results of operations.

Although we try to manage

the impact that these fluctuations have on our operating results, we remain susceptible to increases in food and packaging costs as a

result of factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, inflation, demand,

food safety concerns, generalized infectious diseases, product recalls, fuel prices and other government regulations.

Therefore, material

increases in the prices of the ingredients most critical to our menu could adversely affect our operating results or cause us to consider

changes to our product delivery strategy and adjustments to our menu pricing.

any of our distributors or suppliers perform inadequately, or our distribution or supply relationships are disrupted for any reason,

there could be a material adverse effect on our business, financial condition, results of operations or cash flows.

often enter into contracts for the purchase of food products and supplies, we do not have long-term contracts for the purchase

of all such food products and supplies.

As a result, we may not be able to anticipate or react to changing food costs by adjusting

our purchasing practices or menu prices, which could cause our operating results to deteriorate.

If we cannot replace or engage

distributors or suppliers who meet our specifications in a short period of time, that could increase our expenses and cause shortages

of food and other items at our restaurants, which could cause a restaurant to remove items from its menu.

If that were to happen,

affected restaurants could experience significant reductions in sales during the shortage or thereafter, if customers change their

dining habits as a result.

In addition, although we provide modestly priced food, we may choose not to, or may be unable to, pass

along commodity price increases to consumers, including price increases with respect to ground beef, chicken, produce, dairy,

packaging or other commodities.

These potential changes in food and supply costs could have a material adverse effect on our business,

financial condition and results of operations.

revenue forecasts rely on an aggressive franchise unit sales strategy.

In the event the forecasted numbers are not achieved, we

will have a material negative impact on future revenues.

revenue projections consist of both company operated and franchised locations.

Our growth plans call for an aggressive approach

to franchise unit level sales and subsequent openings.

In the event we cannot meet these forecasts due to the inability to sell

franchise locations in certain states, are prevented from selling franchises due to historical performance, government regulations,

licensing, state registrations, or other factors, we will have a material negative impact on future revenues.

Our revenue model

and cash flows rely heavily on initial franchise fees, ongoing 5% royalties of total net sales and vendor rebates on total purchases

and services from franchised locations.

A significant reduction in the total number of units sold and subsequently opened would

have a material adverse effect on future revenues.

Although we often

enter into contracts for the purchase of food products and supplies, we do not have long-term contracts for the purchase of all such

food products and supplies.

As a result, we may not be able to anticipate or react to changing food costs by adjusting our purchasing

practices or menu prices, which could cause our operating results to deteriorate.

If we cannot replace or engage distributors or suppliers

who meet our specifications in a short period of time, that could increase our expenses and cause shortages of food and other items at

our restaurants, which could cause a restaurant to remove items from its menu.

If that were to happen, affected restaurants could experience

significant reductions in sales during the shortage or thereafter, if customers change their dining habits as a result.

although we provide modestly priced food, we may choose not to, or may be unable to, pass along commodity price increases to consumers,

including price increases with respect to ground beef, chicken, seafood, produce, dairy, packaging or other commodities.

These potential

changes in food and supply costs could have a material adverse effect on our business, financial condition and results of operations.

to manage our growth effectively could harm our business and operating results.

growth plan includes opening a significant number of new restaurants, both franchised and Company-owned.

Our existing restaurant

management systems, financial and management controls and information systems may be inadequate to support our planned expansion.

Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train

and retain managers and team members.

We may not respond quickly enough to the changing demands that our expansion will impose

on our management, restaurant teams and existing infrastructure, which could harm our business, financial condition and results

of operations.

Our existing restaurant management

systems, financial and management controls and information systems may be inadequate to support our planned expansion.

Managing our growth

effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and

team members.

We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant

teams and existing infrastructure, which could harm our business, financial condition and results of operations.

planned rapid increase in the number of our restaurants may make our future results unpredictable.

intend to continue to increase the number of our company-owned and franchised restaurants in the next several years.

strategy and the substantial investment associated with the development of each new restaurant may cause our operating results

to fluctuate unpredictably or have an adverse effect on our profits.

In addition, we may find that our restaurant concept has

limited appeal in new markets or we may experience a decline in the popularity of our restaurant concept in the markets in which

intend to continue to increase the number of our Company-owned and franchised restaurants in the next several years, especially in the

Pokemoto division.

This growth strategy and the substantial investment associated with the development of each new restaurant may cause

our operating results to fluctuate unpredictably or have an adverse effect on our profits.

In addition, we may find that our restaurant

concept has limited appeal in new markets or we may experience a decline in the popularity of our restaurant concept in the markets in

which we operate.

Newly opened restaurants or our future markets and restaurants may not be successful or our system-wide average restaurant

revenue may not increase, which could have a material adverse effect on our business, financial condition and results of operations.

financial performance of our franchisees can negatively impact our business.

approximately 47% of our restaurants are franchised as of December 31, 2020, our financial results are dependent in significant

part upon the operational and financial success of our franchisees.

We receive royalties, franchise fees, vendor rebates, contributions

to our marketing development fund and local co-op advertising funds and other fees from our franchisees.

We also collect rebates

from vendors supplying franchisees for food purchases, services and materials.

We have established operational standards and guidelines

for our franchisees;

however, we have limited control over how our franchisees’

businesses are run.

While we are responsible

for the anticipated success of our entire system of restaurants and for taking a longer-term view with respect to system improvements,

our franchisees have individual business strategies and objectives, which might conflict with our interests.

Our franchisees may

not be able to secure adequate financing to open or continue operating their Muscle Maker Grill restaurants.

If they incur too

much debt or if economic or sales trends deteriorate such that they are unable to repay existing debt, our franchisees could experience

financial distress or even bankruptcy.

If a significant number of franchisees become financially distressed, it could harm our

operating results through reduced royalty revenues and the impact on our profitability could be greater than the percentage decrease

in the royalty revenues.

Closure of franchised restaurants would reduce our royalty revenues and other sources of income and could

negatively impact margins, since we may not be able to reduce fixed costs which we continue to incur.

financial performance of our franchisees can negatively impact our business as we rely on an aggressive unit sales strategy.

revenue projections consist of both Company-operated and franchised locations.

Our growth plans call for an aggressive approach to Pokemoto

franchise unit level sales and subsequent openings.

As approximately 48% of our restaurants are franchised as of December 31, 2021, our

financial results are dependent in significant part upon the operational and financial success of our franchisees.

In the event we cannot

meet these forecasts due to the inability to sell franchise locations in certain states, are prevented from selling franchises due to

historical performance, government regulations, licensing, state registrations, or other factors, we will have a material negative impact

on future revenues.

Our revenue model and cash flows rely heavily on initial franchise fees, ongoing 2% - 6% royalties of total net sales

and vendor rebates on total purchases and services from franchised locations.

A significant reduction in the total number of units sold

and subsequently opened would have a material adverse effect on future revenues.

We also collect rebates from some vendors supplying

franchisees for food purchases, services and materials.

We have established operational standards and guidelines for our franchisees;

however, we have limited control over how our franchisees’ businesses are run.

While we are responsible for the anticipated success

of our entire system of restaurants and for taking a longer-term view with respect to system improvements, our franchisees have individual

business strategies and objectives, which might conflict with our interests.

Our franchisees may not be able to secure adequate financing

to open or continue operating their Muscle Maker Grill or Pokemoto restaurants.

If they incur too much debt or if economic or sales trends

deteriorate such that they are unable to repay existing debt, our franchisees could experience financial distress or even bankruptcy.

If a significant number of franchisees become financially distressed, it could harm our operating results through reduced royalty revenues

and the impact on our profitability could be greater than the percentage decrease in the royalty revenues.

Closure of franchised restaurants

would reduce our royalty revenues and other sources of income and could negatively impact margins, since we may not be able to reduce

fixed costs which we continue to incur.

interests of our franchisees may conflict with ours or yours in the future and we could face liability from our franchisees or related

to our relationship with our franchisees.

as independent business operators, may from time to time disagree with us and our strategies regarding the business or our interpretation

of our respective rights and obligations under the franchise agreement and the terms and conditions of the franchisee/franchisor relationship.

This may lead to disputes with our franchisees and we expect such disputes to occur from time to time in the future as we continue to

offer franchises.

Such disputes may result in legal action against us.

To the extent we have such disputes, the attention, time and financial

resources of our management and our franchisees will be diverted from our restaurants, which could have a material adverse effect on

our business, financial condition, results of operations and cash flows even if we have a successful outcome in the dispute.

addition, various state and federal laws govern our relationship with our franchisees and our potential sale of a franchise.

and/or a government agency may bring legal action against us based on the franchisee/franchisor relationships that could result in the

award of damages to franchisees and/or the imposition of fines or other penalties against us.

have limited control with respect to the operations of our franchisees, which could have a negative impact on our business.

are independent business operators and are not our employees, and we do not exercise control over the day-to-day operations of

their restaurants.

We provide training and support to franchisees, and set and monitor operational standards, but the quality

of franchised restaurants may be diminished by any number of factors beyond our control.

Consequently, franchisees may not successfully

operate restaurants in a manner consistent with our standards and requirements or may not hire and train qualified managers and

other restaurant personnel.

If franchisees do not operate to our expectations, our image and reputation, and the image and reputation

of other franchisees, may suffer materially and system-wide sales could decline significantly, which would reduce our royalty

and other revenues, and the impact on profitability could be greater than the percentage decrease in royalties and fees.

are independent business operators and are not our employees, and we do not exercise control over the day-to-day operations of their

We provide training and support to franchisees, and set and monitor operational standards, but the quality of franchised

restaurants may be diminished by any number of factors beyond our control.

Consequently, franchisees may not successfully operate restaurants

in a manner consistent with our standards and requirements or may not hire and train qualified managers and other restaurant personnel.

If franchisees do not operate to our expectations, our image and reputation, and the image and reputation of other franchisees, may suffer

materially and system-wide sales could decline significantly, which would reduce our royalty and other revenues, and the impact on profitability

could be greater than the percentage decrease in royalties and fees.

challenging economic environment may affect our franchisees, with adverse consequences to us.

rely in part on our franchisees and the manner in which they operate their locations to develop and promote our business.

to the continuing challenging economic environment, it is possible that some franchisees could file for bankruptcy or become delinquent

in their payments to us, which could have a significant adverse impact on our business due to loss or delay in payments of royalties,

contributions to our marketing development fund and brand development/advertising funds and other fees.

Bankruptcies by our franchisees

could prevent us from terminating their franchise agreements so that we can offer their territories to other franchisees, negatively

impact our market share and operating results as we may have fewer well-performing restaurants, and adversely impact our ability

to attract new franchisees.

cannot be certain that the developers and franchisees we select will have the business acumen or financial resources necessary

to open and operate successful franchises in their franchise areas, and state franchise laws may limit our ability to terminate

or modify these franchise arrangements.

Moreover, franchisees may not successfully operate restaurants in a manner consistent

with our standards and requirements or may not hire and train qualified managers and other restaurant personnel.

The failure of

developers and franchisees to open and operate franchises successfully could have a material adverse effect on us, our reputation,

our brand and our ability to attract prospective franchisees and could materially adversely affect our business, financial condition,

results of operations and cash flows.

continuing challenging economic environment, it is possible that some franchisees could file for bankruptcy or become delinquent in their

payments to us, which could have a significant adverse impact on our business due to loss or delay in payments of royalties, elimination

of vendor rebates on franchisee purchases, contributions to our marketing development fund and brand development/advertising funds and

Bankruptcies by our franchisees could prevent us from terminating their franchise agreements so that we can offer their territories

to other franchisees, negatively impact our market share and operating results as we may have fewer well-performing restaurants, and

adversely impact our ability to attract new franchisees.

cannot be certain that the developers and franchisees we select will have the business acumen or financial resources necessary to open

and operate successful franchises in their franchise areas, and state franchise laws may limit our ability to terminate or modify these

franchise arrangements.

Moreover, franchisees may not successfully operate restaurants in a manner consistent with our standards and

requirements or may not hire and train qualified managers and other restaurant personnel.

The failure of developers and franchisees to

open and operate franchises successfully could have a material adverse effect on us, our reputation, our brand and our ability to attract

prospective franchisees and could materially adversely affect our business, financial condition, results of operations and cash flows.

may not have access to the financial or management resources that they need to open the restaurants contemplated by their agreements

with us or be able to find suitable sites on which to develop them.

Franchisees may not be able to negotiate acceptable lease

or purchase terms for restaurant sites, obtain the necessary permits and government approvals or meet construction schedules.

Any of these problems could slow our growth and reduce our franchise revenues.

Additionally, our franchisees typically depend

on financing from banks and other financial institutions, which may not always be available to them, in order to construct and

open new restaurants.

For these reasons, franchisees operating under development agreements may not be able to meet the new restaurant

opening dates required under those agreements.

system-wide restaurant base is geographically concentrated in the Northeastern United States, and we could be negatively affected

by conditions specific to that region.

Franchisees may not be able to negotiate an acceptable lease or purchase

terms for restaurant sites, obtain the necessary permits and government approvals or meet construction schedules.

Any of these problems

could slow our growth and reduce our franchise revenues.

Additionally, our franchisees typically depend on financing from banks and other

financial institutions, which may not always be available to them, in order to construct and open new restaurants.

For these reasons,

franchisees operating under development agreements may not be able to meet the new restaurant opening dates required under those agreements.

system-wide restaurant base is geographically concentrated in the Northeastern United States for Muscle Maker Grill and Pokemoto Restaurants

and Jacksonville, Florida for SuperFit Foods, and we could be negatively affected by conditions specific to that region.

Company-operated and franchised restaurants in the Northeastern United States represent approximately 54% of our system-wide restaurants

as of December 31, 2021.

Our company-operated and franchised restaurants in New Jersey and New York represent approximately 31%

of our system-wide restaurants as of December 31, 2020.

Adverse changes in demographic, unemployment, economic, regulatory or

weather conditions in the Northeastern United States have had, and may continue to have, material adverse effects on our business.

As a result of our concentration in this market, we have been, and in the future may be, disproportionately affected by these

adverse conditions compared to other chain restaurants with a national footprint.

addition, our competitors could open additional restaurants in New Jersey and New York, where we have significant concentration

with 10 of our system restaurants, which could result in reduced market share for us and may adversely impact our profitability.

Our Company-operated and franchised restaurants in New Jersey, New York, Connecticut and other New England states

represent approximately 41% of our system-wide restaurants as of December 31, 2021.

Adverse changes in demographic, unemployment, economic,

regulatory or weather conditions in the Northeastern United States have had, and may continue to have, material adverse effects on our

As a result of our concentration in these markets, we have been, and in the future may be, disproportionately affected

by these adverse conditions compared to other chain restaurants with a national footprint.

addition, our competitors could open additional restaurants in New Jersey, New York, Connecticut and other New England states where we

have significant concentration with 20 of our system restaurants, which could result in reduced market share for us and may adversely

impact our profitability.

our SuperFit Foods division is solely located in Jacksonville, Florida.

Adverse changes in demographic, unemployment, economic, regulatory

or weather conditions in the Jacksonville, Florida market have had, and may continue to have, material adverse effects on our business.

In addition, because all of our SuperFit Foods revenue comes solely from the Jacksonville, Florida market, we could be materially affected

by a major meal prep competitor being introduced to the market.

As a result of our concentration in this market for SuperFit Foods, we

have been, and in the future may be, disproportionately affected by these adverse conditions compared to other meal prep or companies

with a national footprint.

publicity could reduce sales at some or all of our restaurants.

may, from time to time, be faced with negative publicity relating to food quality, the safety, sanitation and welfare of our restaurant

facilities, customer complaints or litigation alleging illness or injury, health inspection scores, integrity of our or our suppliers’

food processing and other policies, practices and procedures, employee relationships and welfare or other matters at one or more

of our restaurants.

Negative publicity may adversely affect us, regardless of whether the allegations are valid or whether we

are held to be responsible.

In addition, the negative impact of adverse publicity relating to one restaurant may extend far beyond

the restaurant involved, especially due to the high geographic concentration of many of our restaurants, to affect some or all

of our other restaurants, including our franchised restaurants.

The risk of negative publicity is particularly great with respect

to our franchised restaurants because we are limited in the manner in which we can regulate them, especially on a real-time basis

and negative publicity from our franchised restaurants may also significantly impact company-operated restaurants.

A similar risk

exists with respect to food service businesses unrelated to us, if customers mistakenly associate such unrelated businesses with

our operations.

Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment

or wrongful termination may also create not only legal and financial liability but negative publicity that could adversely affect

us and divert our financial and management resources that would otherwise be used to benefit the future performance of our operations.

These types of employee claims could also be asserted against us, on a co-employer theory, by employees of our franchisees.

significant increase in the number of these claims or an increase in the number of successful claims could materially adversely

affect our business, financial condition, results of operations and cash flows.

safety and quality concerns may negatively impact our business and profitability, our internal operational controls and standards

may not always be met and our employees may not always act professionally, responsibly and in our and our customers’

facilities, customer complaints or litigation alleging illness or injury, health inspection scores, integrity of our or our suppliers’

food processing and other policies, practices and procedures, employee relationships and welfare or other matters at one or more of our

Negative publicity may adversely affect us, regardless of whether the allegations are valid or whether we are held to be

In addition, the negative impact of adverse publicity relating to one restaurant may extend far beyond the restaurant involved,

especially due to the high geographic concentration of many of our restaurants, to affect some or all of our other restaurants, including

our franchised restaurants.

The risk of negative publicity is particularly great with respect to our franchised restaurants because we

are limited in the manner in which we can regulate them, especially on a real-time basis and negative publicity from our franchised restaurants

may also significantly impact Company-operated restaurants.

A similar risk exists with respect to food service businesses unrelated to

us, if customers mistakenly associate such unrelated businesses with our operations.

Employee claims against us based on, among other

things, wage and hour violations, discrimination, harassment or wrongful termination may also create not only legal and financial liability

but negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be used

to benefit the future performance of our operations.

These types of employee claims could also be asserted against us, on a co-employer

theory, by employees of our franchisees.

A significant increase in the number of these claims or an increase in the number of successful

claims could materially adversely affect our business, financial condition, results of operations and cash flows.

safety and quality concerns may negatively impact our business and profitability, our internal operational controls and standards may

not always be met and our employees may not always act professionally, responsibly and in our and our customers’ best interests.

Any possible instances of food-borne illness could reduce our restaurant sales.

or reports of food-borne or water-borne illness or other food safety issues, food contamination or tampering, employee hygiene

and cleanliness failures or improper employee conduct at our restaurants could lead to product liability or other claims.

incidents or reports could negatively affect our brand and reputation as well as our business, revenues and profits.

Similar incidents

or reports occurring at limited service restaurants unrelated to us could likewise create negative publicity, which could negatively

impact consumer behavior towards us.

cannot guarantee to consumers that our internal controls and training will be fully effective in preventing all food-borne illnesses.

Furthermore, our reliance on third-party food processors and distributors makes it difficult to monitor food safety compliance

and may increase the risk that food-borne illness would affect multiple locations rather than single restaurants.

Some food-borne

illness incidents could be caused by third-party food suppliers and transporters outside of our control.

New illnesses resistant

to our current precautions may develop in the future, or diseases with long incubation periods could arise, that could give rise

to claims or allegations on a retroactive basis.

One or more instances of food-borne illness in one of our company-operated or

franchised restaurants could negatively affect sales at all of our restaurants if highly publicized, especially due to the high

geographic concentration of many of our restaurants.

This risk exists even if it were later determined that the illness was wrongly

attributed to one of our restaurants.

A number of other restaurant chains have experienced incidents related to food-borne illnesses

that have had material adverse impacts on their operations, and we cannot assure you that we could avoid a similar impact upon

the occurrence of a similar incident at one of our restaurants.

Additionally, even if food-borne illnesses were not identified

at our restaurants, our restaurant sales could be adversely affected if instances of food-borne illnesses at other restaurant

chains were highly publicized.

In addition, our restaurant sales could be adversely affected by publicity regarding other high-profile

illnesses such as avian flu that customers may associate with our food products.

illnesses, such as E.

coli, Listeria, Salmonella, Cyclospora and Trichinosis, and food safety issues, such as food tampering, contamination

(including with respect to allergens) and adulteration or food- or beverage-borne illness, occur or may occur within our system from

time to time.

Furthermore, due to the COVID-19 pandemic, there are now stricter health regulations and guidelines and increased public

concern over food safety standards and controls.

Any report or publicity linking us or one of our Concepts’ restaurants, or linking

our competitors or the retail food industry generally, to instances of food- or beverage-borne illness or food safety issues, could adversely

affect us and possibly lead to product liability claims, litigation, governmental investigations or actions, and damages.

Moreover, the

reliance of our concepts’ restaurants on third-party food suppliers and distributors and increasing reliance on food delivery aggregators

increases the risk that food or beverage-borne illness incidents and food safety issues could be caused by factors outside of our direct

If a customer of one of our Concepts’ restaurants becomes ill from food or beverage-borne illnesses or as a result of

food safety issues, restaurants in our system may be temporarily closed, which could disrupt our operations and materially and adversely

affect our business.

In addition, instances or allegations of food or beverage-borne illness or food safety issues, real or perceived,

involving our restaurants, restaurants of competitors, or our suppliers or distributors (regardless of whether we use or have used those

suppliers or distributors), or otherwise involving the types of food served at our restaurants, could result in negative publicity that

could adversely affect either our or our concepts’ franchisees’ revenues and profits.

The occurrence of food or beverage-borne

illnesses or food safety issues could also adversely affect the price and availability of affected ingredients, which could result in

disruptions in our supply chain and/or lower margins for us and our Concepts’ franchisees.

volatile credit and capital markets could have a material adverse effect on our financial condition.

ability to manage our debt is dependent on our level of cash flow from Company-operated and franchised restaurants, net of costs.

It is anticipated that in 2021 the company will not have positive cash flow and will require additional outside funding to maintain

An economic downturn may negatively impact our cash flows.

Credit and capital markets can be volatile, which could

make it more difficult for us to refinance our existing debt or to obtain additional debt or equity financings in the future.

Such constraints could increase our costs of borrowing and could restrict our access to other potential sources of future liquidity.

Our failure to have sufficient liquidity to make interest and other payments required by our debt could result in a default of

such debt and acceleration of our borrowings, which would have a material adverse effect on our business and financial condition.

The lack of availability or access to build-to-suit leases and equipment financing leases could result in a decreased number of

new restaurants and have a negative impact on our growth.

strategy to open a significant amount of company-owned and operated restaurants on non-traditional sites such as universities,

office buildings, ghost kitchens, military bases, airports and casinos could fail.

company currently has locations open and in development on military bases through the Army and Air Force Exchange Service, or

AAFES, as well as the Marines.

In addition, as of December 31, 2020, the company has four university locations built but not

open due to covid restrictions and one additional lease signed for future development.

The company continues to identify

and open ghost kitchen locations and other non-traditional consumer access points.

The company will continue to seek non-traditional

locations and consumer access across multiple venues.

In the event these locations do not become available in the future or

the Company is not awarded specific sites, the total restaurant count of company-owned and operated locations could be

materially affected.

In addition, non-traditional sites tend to have a lower capital investment to build out and more favorable

In the event we cannot obtain non-traditional sites, the total outlay of capital expenditures could increase significantly

over time for new locations outside of non-traditional installations.

economic downturn may negatively impact our cash flows.

Credit and capital markets can be volatile, which could make it more difficult

for us to refinance our existing debt or to obtain additional debt or equity financings in the future.

Such constraints could increase

our costs of borrowing and could restrict our access to other potential sources of future liquidity.

Our failure to have sufficient liquidity

to make interest and other payments required by our debt could result in a default of such debt and acceleration of our borrowings, which

would have a material adverse effect on our business and financial condition.

The lack of availability or access to build-to-suit leases

and equipment financing leases could result in a decreased number of new restaurants and have a negative impact on our growth.

military conflict or large troop deployment could affect our revenue at Company and franchise military locations in the future.

current company-operated non-traditional location strategy focuses on building restaurants on non-traditional locations such as

universities, office buildings, military bases, airports and casinos.

Our military bases are built in support of “Operation

Live Well”

and the desire of the United States military to offer healthier eating options on its bases.

In the event of

a large troop deployment or military conflict, the total number of troops present on any given base could be materially reduced

and therefore our total revenues in these locations would likely be reduced accordingly.

interests of our franchisees may conflict with ours or yours in the future and we could face liability from our franchisees or

related to our relationship with our franchisees.

as independent business operators, may from time to time disagree with us and our strategies regarding the business or our interpretation

of our respective rights and obligations under the franchise agreement and the terms and conditions of the franchisee/franchisor

relationship.

This may lead to disputes with our franchisees and we expect such disputes to occur from time to time in the future

as we continue to offer franchises.

Such disputes may result in legal action against us.

To the extent we have such disputes,

the attention, time and financial resources of our management and our franchisees will be diverted from our restaurants, which

could have a material adverse effect on our business, financial condition, results of operations and cash flows even if we have

a successful outcome in the dispute.

addition, various state and federal laws govern our relationship with our franchisees and our potential sale of a franchise.

franchisee and/or a government agency may bring legal action against us based on the franchisee/franchisor relationships that

could result in the award of damages to franchisees and/or the imposition of fines or other penalties against us.

personal information that we collect may be vulnerable to breach, theft or loss that could adversely affect our reputation, results

of operation and financial condition.

the ordinary course of our business, we collect, process, transmit and retain personal information regarding our employees and

their families, our franchisees, vendors and consumers, which can include social security numbers, social insurance numbers, banking

and tax identification information, health care information and credit card information and our franchisees collect similar information.

have multiple Company-owned non-traditional military base locations.

Our military base locations are built in support of “Operation

Live Well” and the desire of the United States military to offer healthier eating options on its bases.

In the event of a large

troop deployment or military conflict, the total number of troops present on any given base could be materially reduced and therefore

our total revenues in these locations would likely be reduced accordingly.

personal information that we collect may be vulnerable to breach, theft or loss that could adversely affect our reputation, results of

operation and financial condition.

the ordinary course of our business, we collect, process, transmit and retain personal information regarding our employees and their

families, our franchisees, vendors and consumers, which can include social security numbers, social insurance numbers, banking and tax

identification information, health care information, user names and passwords and credit card information and our franchisees collect

similar information.

Some of this personal information is held and managed by our franchisees and certain of our vendors.

A third-party may be able

to circumvent the security and business controls we use to limit access and use of personal information, which could result in

a breach of employee, consumer or franchisee privacy.

A third-party

may be able to circumvent the security and business controls we use to limit access and use of personal information, which could result

in a breach of employee, consumer or franchisee privacy.

A major breach, theft or loss of personal information regarding our employees

and their families, our franchisees, vendors or consumers that is held by us or our vendors could result in substantial fines,

penalties, indemnification claims and potential litigation against us which could negatively impact our results of operations

and financial condition.

As a result of legislative and regulatory rules, we may be required to notify the owners of the personal

information of any data breaches, which could harm our reputation and financial results, as well as subject us to litigation or

actions by regulatory authorities.

Furthermore, media or other reports of existing or perceived security vulnerabilities in our

systems or those of our franchisees or vendors, even if no breach has been attempted or has occurred, can adversely impact our

brand and reputation, and thereby materially impact our business.

and their families, our franchisees, vendors or consumers that is held by us or our vendors could result in substantial fines, penalties,

indemnification claims and potential litigation against us which could negatively impact our results of operations and financial condition.

As a result of legislative and regulatory rules, we may be required to notify the owners of the personal information of any data breaches,

which could harm our reputation and financial results, as well as subject us to litigation or actions by regulatory authorities.

media or other reports of existing or perceived security vulnerabilities in our systems or those of our franchisees or vendors, even

if no breach has been attempted or has occurred, can adversely impact our brand and reputation, and thereby materially impact our business.

capital investments and other expenditures could be required to remedy a breach and prevent future problems, including costs associated

with additional security technologies, personnel, experts and credit monitoring services for those whose data has been breached.

These costs, which could be material, could adversely impact our results of operations during the period in which they are incurred.

The techniques and sophistication used to conduct cyber-attacks and breaches, as well as the sources and targets of these attacks,

change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

our expenditures to prevent future cyber-attacks or breaches may not be successful.

costs, which could be material, could adversely impact our results of operations during the period in which they are incurred.

The techniques

and sophistication used to conduct cyber-attacks and breaches, as well as the sources and targets of these attacks, change frequently

and are often not recognized until such attacks are launched or have been in place for a period of time.

Accordingly, our expenditures

to prevent future cyber-attacks or breaches may not be successful.

technology system failures or interruptions or breaches of our network security may interrupt our operations, subject us to increased

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our reliance on technology has increased, so have the risks posed to our systems.

We rely heavily on our computer systems and

network infrastructure across operations including, but not limited to, point-of-sale processing at our restaurants, as well as

the systems of our third-party vendors to whom we outsource certain administrative functions.

Despite our implementation of security

measures, all of our technology systems are vulnerable to damage, disruption or failures due to physical theft, fire, power loss,

telecommunications failure or other catastrophic events, as well as from problems with transitioning to upgraded or replacement

systems, internal and external security breaches, denial of service attacks, viruses, worms and other disruptive problems caused

If any of our technology systems were to fail, and we were unable to recover in a timely way, we could experience

an interruption in our operations.

Furthermore, if unauthorized access to or use of our systems were to occur, data related to

our proprietary information could be compromised.

The occurrence of any of these incidents could have a material adverse effect

on our future financial condition and results of operations.

We rely heavily on our computer systems and network

infrastructure across operations including, but not limited to, point-of-sale processing at our restaurants, online/web based transactions

at SuperFit Foods and third-party delivery and loyalty apps as well as the systems of our third-party vendors to whom we outsource certain

administrative functions.

Despite our implementation of security measures, all of our technology systems are vulnerable to damage, disruption

or failures due to physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from problems

with transitioning to upgraded or replacement systems, internal and external security breaches, denial of service attacks, viruses, worms

and other disruptive problems caused by hackers.

If any of our technology systems were to fail, and we were unable to recover in a timely

way, we could experience an interruption in our operations.

Furthermore, if unauthorized access to or use of our systems were to occur,

data related to our proprietary information could be compromised.

The occurrence of any of these incidents could have a material adverse

effect on our future financial condition and results of operations.

To the extent that some of our reporting systems require or rely

on manual processes, it could increase the risk of a breach due to human error.

addition, we receive and maintain certain personal information about our customers, franchisees and employees, and our franchisees

receive and maintain similar information.

For example, in connection with credit card transactions, we and our franchisees collect

and transmit confidential credit card information by way of retail networks.

We also maintain important internal data, such as

personally identifiable information about our employees and franchisees and information relating to our operation.

personally identifiable information is regulated by applicable laws and regulations.

If our security and information systems or

those of our franchisees are compromised or our business associates fail to comply with these laws and regulations and this information

is obtained by unauthorized persons or used inappropriately, it could adversely affect our reputation, as well as our restaurant

operations and results of operations and financial condition.

As privacy and information security laws and regulations change,

we may incur additional costs to ensure that we remain in compliance.

the standards for systems currently used for transmission and approval of electronic payment transactions, and the technology

utilized in electronic payment themselves, all of which can put electronic payment data at risk, are determined and controlled

by the payment card industry, not by us.

If someone is able to circumvent our data security measures or that of third parties

with whom we do business, including our franchisees, he or she could destroy or steal valuable information or disrupt our operations.

Any security breach could expose us to risks of data loss, litigation, liability, and could seriously disrupt our operations.

Any resulting negative publicity could significantly harm our reputation and could materially and adversely affect our business

and operating results.

number of our systems and processes are not fully integrated and, as a result, require us to manually estimate and consolidate

certain information that we use to manage our business.

To the extent that we are not able to obtain transparency into our operations

from our systems, it could impair the ability of our management to react quickly to changes in the business or economic environment.

addition, we receive and maintain certain personal information about our customers, franchisees and employees, and our franchisees receive

and maintain similar information.

For example, in connection with credit card transactions, we and our franchisees collect and transmit

confidential credit card information by way of retail networks.

We also maintain important internal data, such as personally identifiable

information about our employees and franchisees and information relating to our operation.

Our use of personally identifiable information

is regulated by applicable laws and regulations.

If our security and information systems or those of our franchisees are compromised

or our business associates fail to comply with these laws and regulations and this information is obtained by unauthorized persons or

used inappropriately, it could adversely affect our reputation, as well as our restaurant operations and results of operations and financial

As privacy and information security laws and regulations change, we may incur additional costs to ensure that we remain in

the standards for systems currently used for transmission and approval of electronic payment transactions, and the technology utilized

in electronic payment themselves, all of which can put electronic payment data at risk, are determined and controlled by the payment

card industry, not by us.

If someone is able to circumvent our data security measures or that of third parties with whom we do business,

including our franchisees, he or she could destroy or steal valuable information or disrupt our operations.

Any security breach could

expose us to risks of data loss, litigation, liability, and could seriously disrupt our operations.

Any resulting negative publicity

could significantly harm our reputation and could materially and adversely affect our business and operating results.

number of our systems and processes are not fully integrated and, as a result, require us to manually estimate and consolidate certain

information that we use to manage our business.

To the extent that we are not able to obtain transparency into our operations from our

systems, it could impair the ability of our management to react quickly to changes in the business or economic environment.

anticipate expanding, upgrading and developing our information technology capabilities.

If we are unable to successfully upgrade

or expand our technological capabilities, we may not be able to take advantage of market opportunities, manage our costs and transactional

data effectively, satisfy customer requirements, execute our business plan or respond to competitive pressures.

outsource certain aspects of our business to third-party vendors which subjects us to risks, including disruptions in our business

and increased costs.

If we are unable to successfully upgrade or expand

our technological capabilities, we may not be able to take advantage of market opportunities, manage our costs and transactional data

effectively, satisfy customer requirements, execute our business plan or respond to competitive pressures.

outsource certain aspects of our business to third-party vendors which subjects us to risks, including disruptions in our business and

increased costs.

have outsourced certain administrative functions for our business to third-party service providers.

We also outsource certain

information technology support services and benefit plan administration.

In the future, we may outsource other functions to achieve

cost savings and efficiencies.

If the service providers to which we outsource these functions do not perform effectively or are

negatively impacted by the COVID-19 pandemic, we may not be able to achieve the expected cost savings and may have to incur additional

costs in connection with such failure to perform.

Depending on the function involved, such failures may also lead to business

disruption, transaction errors, processing inefficiencies, the loss of sales and customers, the loss of or damage to intellectual

property through security breach, and the loss of sensitive data through security breach or otherwise.

Any such damage or interruption

could have a material adverse effect on our business, cause us to face significant fines, customer notice obligations or costly

litigation, harm our reputation with our customers or prevent us from paying our collective suppliers or employees or receiving

payments on a timely basis.

failure to enforce and maintain our trademarks and protect our other intellectual property could materially adversely affect our

business, including our ability to establish and maintain brand awareness.

have registered Muscle Maker Grill®, Healthy Joe’s and certain other names used by our restaurants as trademarks or

service marks with the United States Patent and Trademark Office.

The Muscle Maker Grill®

trademark is also registered in

some form in one foreign country.

Our current brand campaign, “Great Food with Your Health in Mind”

has also been

approved for registration with the United States Patent and Trademark Office.

In addition, the Muscle Maker Grill logo, website

name and address (www.musclemakergrill.com) and Facebook, Instagram, Twitter and other social media accounts are our intellectual

The success of our business strategy depends on our continued ability to use our existing trademarks and service marks

in order to increase brand awareness and develop our branded products.

If our efforts to protect our intellectual property are

not adequate, or if any third-party misappropriates or infringes on our intellectual property, whether in print, on the Internet

or through other media, the value of our brands may be harmed, which could have a material adverse effect on our business, including

the failure of our brands and branded products to achieve and maintain market acceptance.

There can be no assurance that all of

the steps we have taken to protect our intellectual property in the United States and in foreign countries will be adequate.

addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do the laws of

the United States.

or our suppliers maintain the seasonings and additives for our food offerings, as well as certain standards, specifications and

operating procedures, as trade secrets or confidential information.

We may not be able to prevent the unauthorized disclosure

or use of our trade secrets or information, despite the existence of confidentiality agreements and other measures.

to ensure that the quality of our brand and branded products is maintained by all of our franchisees, we cannot be certain that

these franchisees will not take actions that adversely affect the value of our intellectual property or reputation.

our trade secrets or information were to be disclosed to or independently developed by a competitor, our business, financial condition

and results of operations could be materially adversely affected.

claims with respect to intellectual property assets, if decided against us, may result in competing uses or require adoption of

new, non-infringing intellectual property, which may in turn adversely affect sales and revenues.

can be no assurance that third parties will not assert infringement or misappropriation claims against us, or assert claims that

our rights in our trademarks, service marks, trade dress and other intellectual property assets are invalid or unenforceable.

Any such claims could have a material adverse effect on us or our franchisees if such claims were to be decided against us.

our rights in any intellectual property were invalidated or deemed unenforceable, it could permit competing uses of intellectual

property which, in turn, could lead to a decline in restaurant revenues.

If the intellectual property became subject to third-party

infringement, misappropriation or other claims, and such claims were decided against us, we may be forced to pay damages, be required

to develop or adopt non-infringing intellectual property or be obligated to acquire a license to the intellectual property that

is the subject of the asserted claim.

There could be significant expenses associated with the defense of any infringement, misappropriation,

or other third-party claims.

We also outsource certain information

technology support services and benefit plan administration.

Furthermore, we outsource delivery services to multiple third-party vendors

including UberEats, DoorDash and GrubHub to fulfill delivery orders from both Company-owned and franchise locations.

Our SuperFit Foods

division outsources home and pick up location deliveries to independent contractors.

Our Pokemoto division outsources online ordering

and loyalty programs to Snackpass.

In the future, we may outsource other functions to achieve cost savings and efficiencies.

If the service

providers to which we outsource these functions do not perform effectively or are negatively impacted by the COVID-19 pandemic, we may

not be able to achieve the expected cost savings and may have to incur additional costs in connection with such failure to perform.

on the function involved, such failures may also lead to business disruption, transaction errors, processing inefficiencies, the loss

of sales and customers, the loss of or damage to intellectual property through security breach, and the loss of sensitive data through

security breach or otherwise.

Any such damage or interruption could have a material adverse effect on our business, cause us to face

significant fines, customer notice obligations or costly litigation, harm our reputation with our customers or prevent us from paying

our collective suppliers or employees or receiving payments on a timely basis.

failure to enforce and maintain our trademarks and protect our other intellectual property could materially adversely affect our business,

including our ability to establish and maintain brand awareness.

have registered Muscle Maker Grill®, Healthy Joe’s, Pokemoto®, SuperFit Foods and certain other names used by our restaurants

as trademarks or service marks with the United States Patent and Trademark Office.

The Muscle Maker Grill® trademark is also registered

in some form in one foreign country.

Our current brand campaign, “Great Food with Your Health in Mind” has also been approved

for registration with the United States Patent and Trademark Office.

In addition, the Muscle Maker Grill, Pokemoto and SuperFit Foods

logos, recipes, trade dress, packaging, website names and addresses ( www.musclemakergrill.com , www.pokemoto.com and www.superfitfoods.com )

and Facebook, Instagram, Twitter and other social media and internet accounts are our intellectual property.

The success of our business

strategy depends on our continued ability to use our existing trademarks and service marks in order to increase brand awareness and develop

our branded products.

If our efforts to protect our intellectual property are not adequate, or if any third-party misappropriates or

infringes on our intellectual property, whether in print, on the Internet or through other media, the value of our brands may be harmed,

which could have a material adverse effect on our business, including the failure of our brands and branded products to achieve and maintain

market acceptance.

There can be no assurance that all of the steps we have taken to protect our intellectual property in the United States

and in foreign countries will be adequate.

In addition, the laws of some foreign countries do not protect intellectual property rights

to the same extent as do the laws of the United States.

or our suppliers maintain the seasonings and additives for our food offerings, as well as certain standards, specifications and operating

procedures, as trade secrets or confidential information.

We may not be able to prevent the unauthorized disclosure or use of our trade

secrets or information, despite the existence of confidentiality agreements and other measures.

While we try to ensure that the quality

of our brand and branded products is maintained by all of our franchisees, we cannot be certain that these franchisees will not take

actions that adversely affect the value of our intellectual property or reputation.

If any of our trade secrets or information were to

be disclosed to or independently developed by a competitor, our business, financial condition and results of operations could be materially

adversely affected.

claims with respect to intellectual property assets, if decided against us, may result in competing uses or require adoption of new,

non-infringing intellectual property, which may in turn adversely affect sales and revenues.

can be no assurance that third parties will not assert infringement or misappropriation claims against us, or assert claims that our

rights in our trademarks, service marks, trade dress and other intellectual property assets are invalid or unenforceable.

Any such claims

could have a material adverse effect on us or our franchisees if such claims were to be decided against us.

If our rights in any intellectual

property were invalidated or deemed unenforceable, it could permit competing uses of intellectual property which, in turn, could lead

to a decline in restaurant revenues.

If the intellectual property became subject to third-party infringement, misappropriation or other

claims, and such claims were decided against us, we may be forced to pay damages, be required to develop or adopt non-infringing intellectual

property or be obligated to acquire a license to the intellectual property that is the subject of the asserted claim.

There could be

significant expenses associated with the defense of any infringement, misappropriation, or other third-party claims.

depend on our executive officers, the loss of whom could materially harm our business.

rely upon the accumulated knowledge, skills and experience of our executive officers and significant employees.

Our executive

officers and significant employees have cumulative experience of more than 100 years in the food service industry.

to leave us or become incapacitated, we might suffer in our planning and execution of business strategy and operations, impacting

our brand and financial results.

Our executive officers

and significant employees have cumulative experience of more than 100 years in the food service industry.

If they were to leave us or

become incapacitated, we might suffer in our planning and execution of business strategy and operations, impacting our brand and financial

We also do not maintain any key man life insurance policies for any of our employees.

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federal and state labor laws govern our relationships with our employees and affect operating costs.

These laws include employee

classifications as exempt or non-exempt, minimum wage requirements, unemployment tax rates, workers’

compensation rates,

citizenship requirements and other wage and benefit requirements for employees classified as non-exempt.

Significant additional

government regulations and new laws, including mandating increases in minimum wages, changes in exempt and non-exempt status,

or mandated benefits such as health insurance could materially affect our business, financial condition, operating results or

Furthermore, if our or our franchisees’

employees unionize, it could materially affect our business, financial

condition, operating results or cash flow.

are also subject in the ordinary course of business to employee claims against us based, among other things, on discrimination,

harassment, wrongful termination, or violation of wage and labor laws.

Such claims could also be asserted against us by employees

of our franchisees.

These laws include employee classifications

as exempt or non-exempt, minimum wage requirements, unemployment tax rates, workers’ compensation rates, citizenship requirements

and other wage and benefit requirements for employees classified as non-exempt.

Significant additional government regulations and new

laws, including mandating increases in minimum wages, changes in exempt and non-exempt status, or mandated benefits such as health insurance

could materially affect our business, financial condition, operating results or cash flow.

Furthermore, if our or our franchisees’

employees unionize, it could materially affect our business, financial condition, operating results or cash flow.

are also subject in the ordinary course of business to employee claims against us based, among other things, on discrimination, harassment,

wrongful termination, or violation of wage and labor laws.

Such claims could also be asserted against us by employees of our franchisees.

Moreover, claims asserted against franchisees may at times be made against us as a franchisor.

may divert our financial and management resources that would otherwise be used to benefit our operations.

The ongoing expense

of any resulting lawsuits, and any substantial settlement payment or damage award against us, could adversely affect our business,

brand image, employee recruitment, financial condition, operating results or cash flows.

addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs,

and the United States Congress and Department of Homeland Security from time to time consider and may implement changes to federal

immigration laws, regulations or enforcement programs as well.

Some of these changes may increase our obligations for compliance

and oversight, which could subject us to additional costs and make our hiring process more cumbersome or reduce the availability

of potential employees.

Although we require all workers to provide us with government-specified documentation evidencing their

employment eligibility, some of our employees may, without our knowledge, be unauthorized workers.

Unauthorized workers are subject

to deportation and may subject us to fines or penalties, and if any of our workers are found to be unauthorized, we could experience

adverse publicity that negatively impacts our brand and may make it more difficult to hire and keep qualified employees.

of a significant number of employees who were unauthorized employees may disrupt our operations, cause temporary increases in

our labor costs as we train new employees and result in additional adverse publicity.

We could also become subject to fines, penalties

and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration

compliance laws.

These factors could have a material adverse effect on our business, financial condition and results of operations.

companies have been the target of class action lawsuits and other proceedings alleging, among other things, violations of federal

and state workplace and employment laws.

Proceedings of this nature are costly, divert management attention and, if successful,

could result in our payment of substantial damages or settlement costs.

business is subject to the risk of litigation by employees, consumers, suppliers, franchisees, stockholders or others through

private actions, class actions, administrative proceedings, regulatory actions or other litigation.

The outcome of litigation,

particularly class action and regulatory actions, is difficult to assess or quantify.

In recent years, restaurant companies, including

us, have been subject to lawsuits, including lawsuits, alleging violations of federal and state laws regarding workplace and employment

conditions, discrimination and similar matters.

A number of these lawsuits have resulted in the payment of substantial damages

by the defendants.

Similar lawsuits have been instituted from time to time alleging violations of various federal and state wage

and hour laws regarding, among other things, employee meal deductions, overtime eligibility of managers and failure to pay for

all hours worked.

These claims may divert our financial

and management resources that would otherwise be used to benefit our operations.

The ongoing expense of any resulting lawsuits, and any

substantial settlement payment or damage award against us, could adversely affect our business, brand image, employee recruitment, financial

condition, operating results or cash flows.

addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and

the United States Congress and Department of Homeland Security from time to time consider and may implement changes to federal immigration

laws, regulations or enforcement programs as well.

Some of these changes may increase our obligations for compliance and oversight, which

could subject us to additional costs and make our hiring process more cumbersome or reduce the availability of potential employees.

we require all workers to provide us with government-specified documentation evidencing their employment eligibility, some of our employees

may, without our knowledge, be unauthorized workers.

Unauthorized workers are subject to deportation and may subject us to fines or penalties,

and if any of our workers are found to be unauthorized, we could experience adverse publicity that negatively impacts our brand and may

make it more difficult to hire and keep qualified employees.

Termination of a significant number of employees who were unauthorized employees

may disrupt our operations, cause temporary increases in our labor costs as we train new employees and result in additional adverse publicity.

We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping

obligations of federal and state immigration compliance laws.

These factors could have a material adverse effect on our business, financial

condition and results of operations.

companies have been the target of class action lawsuits and other proceedings alleging, among other things, violations of federal and

state workplace and employment laws.

Proceedings of this nature are costly, divert management attention and, if successful, could result

in our payment of substantial damages or settlement costs.

business is subject to the risk of litigation by employees, consumers, suppliers, franchisees, stockholders or others through private

actions, class actions, administrative proceedings, regulatory actions or other litigation.

The outcome of litigation, particularly class

action and regulatory actions, is difficult to assess or quantify.

In recent years, restaurant companies, including us, have been subject

to lawsuits, including lawsuits, alleging violations of federal and state laws regarding workplace and employment conditions, discrimination

and similar matters.

A number of these lawsuits have resulted in the payment of substantial damages by the defendants.

Similar lawsuits

have been instituted from time to time alleging violations of various federal and state wage and hour laws regarding, among other things,

employee meal deductions, overtime eligibility of managers and failure to pay for all hours worked.

Occasionally,

our customers file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered

at or after a visit to one of our restaurants, including actions seeking damages resulting from food-borne illness or accidents

in our restaurants.

We are also subject to a variety of other claims from third parties arising in the ordinary course of our

business, including contract claims.

The restaurant industry has also been subject to a growing number of claims that the menus

and actions of restaurant chains have led to the obesity of certain of their customers.

We may also be subject to lawsuits from

our employees, the U.S.

Equal Employment Opportunity Commission or others alleging violations of federal and state laws regarding

workplace and employment conditions, discrimination and similar matters.

of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and

money away from our operations and result in increases in our insurance premiums.

In addition, they may generate negative publicity,

which could reduce customer traffic and sales.

Although we maintain what we believe to have adequate levels of insurance, insurance

may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters.

or other liability in excess of our insurance coverage for any claims or any adverse publicity resulting from claims could adversely

affect our business and results of operations.

we or our franchisees face labor shortages or increased labor costs, our results of operations and our growth could be adversely

our customers file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or

after a visit to one of our restaurants, including actions seeking damages resulting from food-borne illness or accidents in our restaurants.

We are also subject to a variety of other claims from third parties arising in the ordinary course of our business, including contract

The restaurant industry has also been subject to a growing number of claims that the menus and actions of restaurant chains have

led to the obesity of certain of their customers.

We may also be subject to lawsuits from our employees, the U.S.

Equal Employment Opportunity

Commission or others alleging violations of federal and state laws regarding workplace and employment conditions, discrimination and

similar matters.

of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money

away from our operations and result in increases in our insurance premiums.

In addition, they may generate negative publicity, which

could reduce customer traffic and sales.

Although we maintain what we believe to have adequate levels of insurance, insurance may not

be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters.

A judgment or other liability

in excess of our insurance coverage for any claims or any adverse publicity resulting from claims could adversely affect our business

and results of operations.

we or our franchisees face labor shortages or increased labor costs, our results of operations and our growth could be adversely affected.

is a primary component in the cost of operating our Company-operated and franchised restaurants.

If we or our franchisees face

labor shortages or increased labor costs because of increased competition for employees, higher employee-turnover rates, unionization

of restaurant workers, or increases in the federally-mandated or state-mandated minimum wage, change in exempt and non-exempt

status, or other employee benefits costs (including costs associated with health insurance coverage or workers’

insurance), our and our franchisees’

operating expenses could increase and our growth could be adversely affected.

have a substantial number of hourly employees who are paid wage rates at or based on the applicable federal or state minimum wage

and increases in the minimum wage will increase our labor costs and the labor costs of our franchisees.

The federal minimum wage

has been $7.25 per hour since July 24, 2009.

Federally-mandated, state-mandated or locally-mandated minimum wages may be raised

in the future.

We may be unable to increase our menu prices in order to pass future increased labor costs on to our customers,

in which case our margins would be negatively affected.

Also, reduced margins of franchisees could make it more difficult to sell

If menu prices are increased by us and our franchisees to cover increased labor costs, the higher prices could adversely

affect transactions which could lower sales and thereby reduce our margins and the royalties that we receive from franchisees.

addition, our success depends in part upon our and our franchisees’

ability to attract, motivate and retain a sufficient

number of well-qualified restaurant operators, management personnel and other employees.

Qualified individuals needed to fill

these positions can be in short supply in some geographic areas.

In addition, limited service restaurants have traditionally experienced

relatively high employee turnover rates.

Although we have not yet experienced any significant problems in recruiting employees,

our and our franchisees’

ability to recruit and retain such individuals may delay the planned openings of new restaurants

or result in higher employee turnover in existing restaurants, which could increase our and our franchisees’

and have a material adverse effect on our business, financial condition, results of operations or cash flows.

If we or our franchisees

are unable to recruit and retain sufficiently qualified individuals, our business and our growth could be adversely affected.

Competition for these employees could require us or our franchisees to pay higher wages, which could also result in higher labor

If we or our franchisees face labor

shortages or increased labor costs because of increased competition for employees, higher employee-turnover rates, size of the available

workforce, unionization of restaurant workers, or increases in the federally-mandated or state-mandated minimum wage, change in exempt

and non-exempt status, or other employee benefits costs (including costs associated with health insurance coverage or workers’

compensation insurance), our and our franchisees’ operating expenses could increase and our growth could be adversely affected.

have a substantial number of hourly employees who are paid wage rates at or based on the applicable federal or state minimum wage and

increases in the minimum wage will increase our labor costs and the labor costs of our franchisees.

Federally-mandated, state-mandated

or locally-mandated minimum wages may be raised in the future.

We may be unable to increase our menu prices in order to pass future increased

labor costs on to our customers, in which case our margins would be negatively affected.

Also, reduced margins of franchisees could make

it more difficult to sell franchises.

If menu prices are increased by us and our franchisees to cover increased labor costs, the higher

prices could adversely affect transactions which could lower sales and thereby reduce our margins and the royalties that we receive from

addition, our success depends in part upon our and our franchisees’ ability to attract, motivate and retain a sufficient number

of well-qualified restaurant operators, management personnel and other employees.

Qualified individuals needed to fill these positions

can be in short supply in some geographic areas.

In addition, limited service restaurants have traditionally experienced relatively high

employee turnover rates.

Our franchisees’ ability to recruit and retain such individuals may delay the planned openings

of new restaurants or result in higher employee turnover in existing restaurants, which could increase our and our franchisees’

labor costs and have a material adverse effect on our business, financial condition, results of operations or cash flows.

franchisees are unable to recruit and retain sufficiently qualified individuals, our business and our growth could be adversely affected.

Competition for these employees could require us or our franchisees to pay higher wages, which could also result in higher labor costs.

are locked into long-term and non-cancelable leases and may be unable to renew leases at the end of their terms.

of our restaurant leases are non-cancelable and typically have initial terms up to between 5 and 10 years and 1-3 renewal terms

of 5 years each that we may exercise at our option.

of our restaurant leases are non-cancelable and typically have initial terms up to between one and ten years and one to three renewal

terms of one to ten years each that we may exercise at our option.

Even if we close a restaurant, we are required to perform our obligations

under the applicable lease, which could include, among other things, a provision for a closed restaurant reserve when the restaurant

is closed, which would impact our profitability, and payment of the base rent, property taxes, insurance and maintenance for the

balance of the lease term.

In addition, in connection with leases for restaurants that we will continue to operate, we may, at

the end of the lease term and any renewal period for a restaurant, be unable to renew the lease without substantial additional

cost, if at all.

As a result, we may close or relocate the restaurant, which could subject us to construction and other costs

Additionally, the revenues and profit, if any, generated at a relocated restaurant may not equal the revenues and profit

generated at the existing restaurant.

and our franchisees are subject to extensive government regulations that could result in claims leading to increased costs and

restrict our ability to operate or sell franchises.

is closed, which would impact our profitability, and payment of the base rent, property taxes, insurance and maintenance for the balance

of the lease term.

In addition, in connection with leases for restaurants that we will continue to operate, we may, at the end of the

lease term and any renewal period for a restaurant, be unable to renew the lease without substantial additional cost, if at all.

result, we may close or relocate the restaurant, which could subject us to construction and other costs and risks.

Additionally, the

revenues and profit, if any, generated at a relocated restaurant may not equal the revenues and profit generated at the existing restaurant.

and our franchisees are subject to extensive government regulations that could result in claims leading to increased costs and restrict

our ability to operate or sell franchises.

and our franchisees are subject to extensive government regulation at the federal, state and local government levels.

These include,

but are not limited to, regulations relating to the preparation and sale of food, zoning and building codes, franchising, land

use and employee, health, sanitation and safety matters.

We and our franchisees are required to obtain and maintain a wide variety

of governmental licenses, permits and approvals.

Difficulty or failure in obtaining them in the future could result in delaying

or canceling the opening of new restaurants.

Local authorities may suspend or deny renewal of our governmental licenses if they

determine that our operations do not meet the standards for initial grant or renewal.

This risk would be even higher if there

were a major change in the licensing requirements affecting our types of restaurants.

are subject to the U.S.

Americans with Disabilities Act (the “ADA”) and similar state laws that give civil rights

protections to individuals with disabilities in the context of employment, public accommodations and other areas, including our

We may in the future have to modify restaurants, websites or other consumer interaction points by adding access ramps

or redesigning certain architectural fixtures or software programs, for example, to provide service to or make reasonable accommodations

for disabled persons.

The expenses associated with these modifications could be material.

operations are also subject to the U.S.

Occupational Safety and Health Act, which governs worker health and safety, the U.S.

Labor Standards Act, which governs such matters as minimum wages and overtime, the U.S.

Immigration Reform and Control Act of

1986, and a variety of similar federal, state and local laws that govern these and other employment law matters.

We and our franchisees

may also be subject to lawsuits from our employees, the U.S.

Equal Employment Opportunity Commission or others alleging violations

of federal and state laws regarding workplace and employment matters, discrimination and similar matters, and we have been a party

to such matters in the past.

In addition, federal, state and local proposals related to paid sick leave or similar matters could,

if implemented, have a material adverse effect on our business, financial condition and results of operations.

Patient Protection and Affordable Care Act of 2010 (the “PPACA”) requires employers such as us to provide adequate

and affordable health insurance for all qualifying employees or pay a monthly per-employee fee or penalty for non-compliance beginning

in fiscal 2015.

We began to offer such health insurance benefits on January 1, 2015 to all eligible employees and may incur substantial

additional expense due to organizing and maintaining the plan which we anticipate will be more expensive on a per person basis

and for an increased number of employees who we anticipate at other times may elect to obtain coverage through a healthcare plan

that we partially subsidize.

If we fail to offer such benefits, or the benefits that we elect to offer do not meet the applicable

requirements, we may incur penalties.

Since the PPACA also requires individuals to obtain coverage or face individual penalties,

employees who are currently eligible but elect not to participate in our healthcare plans may find it more advantageous to do

so when such individual penalties increase in size.

It is also possible that by making changes or failing to make changes in the

healthcare plans offered by us, we will become less competitive in the market for our labor.

Finally, implementing the requirements

of the PPACA is likely to impose additional administrative costs.

The costs and other effects of these new healthcare requirements

cannot be determined with certainty, but they may significantly increase our healthcare coverage costs and could have a material

adverse effect on our business, financial condition and results of operations.

is also a potential for increased regulation of certain food establishments in the United States, where compliance with a Hazard

Analysis and Critical Control Points (“HACCP”) approach would be required.

HACCP refers to a management system in

which food safety is addressed through the analysis and control of potential hazards from production, procurement and handling,

to manufacturing, distribution and consumption of the finished product.

Many states have required restaurants to develop and implement

HACCP Systems, and the United States government continues to expand the sectors of the food industry that must adopt and implement

HACCP programs.

For example, the Food Safety Modernization Act (the “FSMA”), signed into law in January 2011, granted

Food and Drug Administration (the “FDA”) new authority regarding the safety of the entire food system, including

through increased inspections and mandatory food recalls.

Although restaurants are specifically exempted from or not directly

implicated by some of these new requirements, we anticipate that the new requirements may impact our industry.

Additionally, our

suppliers may initiate or otherwise be subject to food recalls that may impact the availability of certain products, result in

adverse publicity or require us to take actions that could be costly for us or otherwise impact our business.

are also subject to regulation by the Federal Trade Commission and subject to state laws that govern the offer, sale, renewal

and termination of franchises and our relationship with our franchisees.

The failure to comply with these laws and regulations

in any jurisdiction or to obtain required approvals could result in a ban or temporary suspension on franchise sales, fines or

the requirement that we make a rescission offer to franchisees, any of which could affect our ability to open new restaurants

in the future and thus could materially adversely affect our business and operating results.

Any such failure could also subject

us to liability to our franchisees.

State and Local Regulation and Compliance

are subject to extensive federal, state and local government regulation, including those relating to, among others, public health

and safety, zoning and fire codes, and franchising.

Failure to obtain or retain food or other licenses and registrations or exemptions

would adversely affect the operations of restaurants.

Although we have not experienced and do not anticipate any significant problems

in obtaining required licenses, permits or approvals, any difficulties, delays or failures in obtaining such licenses, permits,

registrations, exemptions, or approvals could delay or prevent the opening of, or adversely impact the viability of, a restaurant

in a particular area.

development and construction of additional restaurants will be subject to compliance with applicable zoning, land use and environmental

We believe federal and state environmental regulations have not had a material effect on operations, but more stringent

and varied requirements of local government bodies with respect to zoning, land use and environmental factors could delay construction

and increase development costs for new restaurants.

are also subject to the Fair Labor Standards Act, the Immigration Reform and Control Act of 1986 and various federal and state

laws governing such matters as minimum wages, overtime, unemployment tax rates, workers’

compensation rates, citizenship

requirements and other working conditions.

A significant portion of the hourly staff is paid at rates consistent with the applicable

federal or state minimum wage and, accordingly, increases in the minimum wage will increase labor costs.

In addition, the PPACA

increased medical costs beginning in fiscal 2015.

We are also subject to the Americans With Disabilities Act, which prohibits

discrimination on the basis of disability in public accommodations and employment, which may require us to design or modify our

restaurants to make reasonable accommodations for disabled persons.

addition, we must comply with regulations adopted by the Federal Trade Commission, or the FTC, and with several state laws that

regulate the offer and sale of franchises.

The FTC’s Trade Regulation Rule on Franchising, or the FTC Rule, and certain

state laws require that we furnish prospective franchisees with a franchise offering circular or Franchise Disclosure Document

containing information prescribed by the FTC Rule and applicable state laws and regulations.

also must comply with a number of state laws that regulate some substantive aspects of the franchisor-franchisee relationship.

These laws may limit a franchisor’s ability to:

terminate or not renew a franchise without good cause;

prohibit interference

with the right of free association among franchisees;

alter franchise agreements;

disapprove the transfer of a franchise;

among franchisees with regard to charges, royalties and other fees;

and place new stores near existing franchises.

Bills intended

to regulate certain aspects of franchise relationships have been introduced into Congress on several occasions during the last

decade, but none have been enacted.

may become subject to liabilities arising from environmental laws that could likely increase our operating expenses and materially

and adversely affect our business and results of operations.

are subject to federal, state and local laws and regulations, including those concerning waste disposal, pollution, protection

of the environment, and the presence, discharge, storage, handling, release and disposal of, and exposure to, hazardous or toxic

These environmental laws provide for significant fines and penalties for non-compliance and liabilities for remediation,

sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence

of hazardous toxic substances.

Third parties may also make claims against owners or operators of properties for personal injuries

and property damage associated with releases of, or actual or alleged exposure to, such hazardous or toxic substances at, on or

from our restaurants.

Environmental conditions relating to the presence of hazardous substances at prior, existing or future restaurant

sites could materially adversely affect our business, financial condition and results of operations.

Further, environmental laws

and regulations, and the administration, interpretation and enforcement thereof, are subject to change and may become more stringent

in the future, each of which could materially adversely affect our business, financial condition and results of operations.

are subject to federal, state and local laws and regulations relating to environmental protection, including regulation of discharges

into the air and water, storage and disposal of waste and clean-up of contaminated soil and groundwater.

Under various federal,

state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of hazardous or

toxic substances on, in or emanating from such property.

Such liability may be imposed without regard to whether the owner or

operator knew of, or was responsible for, the presence of such hazardous or toxic substances, and in some cases, we may have obligations

imposed by indemnity provisions in our leases.

assurance can be given that we have identified all of the potential environmental liabilities at our properties or that such liabilities

will not have a material adverse effect on our financial condition.

and regulations requiring the display and provision of nutritional information for our menu offerings, and new information or

attitudes regarding diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect

consumer preferences and negatively impact our results of operations.

regulation and consumer eating habits may impact our business as a result of changes in attitudes regarding diet and health or

new information regarding the health effects of consuming our menu offerings.

These changes have resulted in, and may continue

to result in, the enactment of laws and regulations that impact the ingredients and nutritional content of our menu offerings,

or laws and regulations requiring us to disclose the nutritional content of our food offerings.

PPACA establishes a uniform, federal requirement for certain restaurants to post certain nutritional information on their menus.

Specifically, the PPACA amended the Federal Food, Drug and Cosmetic Act to, as of December 1, 2015, require chain restaurants

with 20 or more locations operating under the same name and offering substantially the same menus to publish the total number

of calories of standard menu items on menus and menu boards, along with a statement that puts this calorie information in the

context of a total daily calorie intake.

The PPACA also requires covered restaurants to, as of December 1, 2015, provide to consumers,

upon request, a written summary of detailed nutritional information for each standard menu item, and to provide a statement on

menus and menu boards about the availability of this information.

The PPACA further permits the United States Food and Drug Administration

to require covered restaurants to make additional nutrient disclosures, such as disclosure of trans-fat content.

An unfavorable

report on, or reaction to, our menu ingredients, the size of our portions or the nutritional content of our menu items could negatively

influence the demand for our offerings.

a number of states, counties and cities have enacted menu labeling laws requiring multi-unit restaurant operators to disclose

certain nutritional information to customers or have enacted legislation restricting the use of certain types of ingredients,

portion sizes or packaging materials in restaurants.

with current and future laws and regulations regarding the ingredients and nutritional content of our menu items may be costly

and time-consuming.

Additionally, if consumer health regulations or consumer eating habits change significantly, we may be required

to modify or discontinue certain menu items, and we may experience higher costs associated with the implementation of those changes.

Additionally, some government authorities are increasing regulations regarding trans-fats and sodium, which may require us to

limit or eliminate trans-fats and sodium in our menu offerings or switch to higher cost ingredients or may hinder our ability

to operate in certain markets.

Some jurisdictions have banned certain cooking ingredients, such as trans-fats, which a limited

number of our menu products contain in small, but measurable amounts, or have discussed banning certain products, such as large

Removal of these products and ingredients from our menus could affect product tastes, customer satisfaction levels, and

sales volumes, whereas if we fail to comply with these laws or regulations, our business could experience a material adverse effect.

cannot make any assurances regarding our ability to effectively respond to changes in consumer health perceptions or our ability

to successfully implement the nutrient content disclosure requirements and to adapt our menu offerings to trends in eating habits.

The imposition of additional menu-labeling laws could have an adverse effect on our results of operations and financial position,

as well as on the restaurant industry in general.

are exposed to the risk of natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism

that could disrupt business and result in lower sales, increased operating costs and capital expenditures.

headquarters, company-operated and franchised restaurant locations, third-party sole distributor and its facilities, as well as

certain of our vendors and customers, are located in areas which have been and could be subject to natural disasters such as floods,

but are not limited to, regulations relating to the preparation and sale of food, zoning and building codes, franchising, land use and

employee, health, sanitation and safety matters.

We and our franchisees are required to obtain and maintain a wide variety of governmental

licenses, permits and approvals.

Difficulty or failure in obtaining them in the future could result in delaying or canceling the opening

of new restaurants.

Local authorities may suspend or deny renewal of our governmental licenses if they determine that our operations

do not meet the standards for initial grant or renewal.

This risk would be even higher if there were a major change in the licensing

requirements affecting our types of restaurants.

laws and regulations change regularly and are increasingly complex.

For example, we are subject to:

Americans with Disabilities Act in the U.S.

and similar laws that provide protection to individuals with disabilities in the context

of employment, public accommodations and other areas.

Fair Labor Standards Act as well as a variety of similar laws, which govern matters such as minimum wages, and overtime, and

Family and Medical Leave Act as well as a variety of similar laws which provide protected leave rights to employees.

laws related to workplace health and safety, non-discrimination, non-harassment, whistleblower protections, and other terms and conditions

of employment.

and regulations in government-mandated health care benefits such as the Patient Protection and Affordable Care Act in the U.S.

and regulations relating to nutritional content, nutritional labeling, product safety, product marketing and menu labeling.

relating to state and local licensing.

relating to the relationship between franchisors and franchisees.

and regulations relating to health, sanitation, food, workplace safety, child labor, including laws regulating the use of certain

“hazardous equipment”, building and zoning, and fire safety and prevention.

and regulations relating to union organizing rights and activities.

relating to information security, privacy (including the European Union’s GDPR and California’s CCPA and CPRA), cashless

payments, and consumer protection.

relating to currency conversion or exchange.

relating to international trade and sanctions.

laws and regulations.

and anti-corruption laws, including the U.S.

Foreign Corrupt Practices Act and the UK Bribery Act.

Environmental

laws and regulations, including with respect to climate change and greenhouse gas emissions.

and state immigration laws and regulations in the U.S.

health guidelines and safety protocols related to the COVID-19 pandemic.

failure or alleged failure to comply with applicable laws or regulations or related standards or guidelines could adversely affect our

reputation, growth prospects and financial results or result in, among other things, litigation, revocation of required licenses, internal

investigations, governmental investigations or proceedings, administrative enforcement actions, fines and civil and criminal liability.

Publicity relating to any such noncompliance could also harm our Concepts’ reputations and adversely affect our revenues.

the compliance costs associated with complying with new or existing legal requirements could be substantial.

are exposed to the risk of natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism that

could disrupt business and result in lower sales, increased operating costs and capital expenditures.

headquarters, Company-operated and franchised restaurant locations, third-party sole distributor and its facilities, as well as certain

of our vendors and customers, are located in areas which have been and could be subject to natural disasters such as floods, blizzards,

hurricanes, tornadoes, fires or earthquakes.

Adverse weather conditions or other extreme changes in the weather, including resulting

electrical and technological failures, especially such events which occur in New Jersey and New York, as a result of the concentration

of our restaurants, may disrupt our and our franchisees’

business and may adversely affect our and our franchisees’

ability to obtain food and supplies and sell menu items.

Our business may be harmed if our or our franchisees’

obtain food and supplies and sell menu items is impacted by any such events, any of which could influence customer trends and

purchases and may negatively impact our and our franchisees’

revenues, properties or operations.

Such events could result

in physical damage to one or more of our or our franchisees’

properties, the temporary closure of some or all of our company-operated

restaurants, franchised restaurants and third-party distributor, the temporary lack of an adequate work force in a market, temporary

or long-term disruption in the transport of goods, delay in the delivery of goods and supplies to our company-operated and franchised

restaurants and third-party distributor, disruption of our technology support or information systems, or fuel shortages or dramatic

increases in fuel prices, all of which would increase the cost of doing business.

electrical and technological failures, especially such events which occur in New Jersey, New York, Connecticut, other New England states

and Jacksonville, Florida as a result of the concentration of our restaurants, may disrupt our and our franchisees’ business and

may adversely affect our and our franchisees’ ability to obtain food and supplies and sell menu items.

Our business may be harmed

if our or our franchisees’ ability to obtain food and supplies and sell menu items is impacted by any such events, any of which

could influence customer trends and purchases and may negatively impact our and our franchisees’ revenues, properties or operations.

Such events could result in physical damage to one or more of our or our franchisees’ properties, the temporary closure of some

or all of our Company-operated restaurants, franchised restaurants and third-party distributor, the temporary lack of an adequate work

force in a market, temporary or long-term disruption in the transport of goods, delay in the delivery of goods and supplies to our Company-operated

and franchised restaurants and third-party distributor, disruption of our technology support or information systems, or fuel shortages

or dramatic increases in fuel prices, all of which would increase the cost of doing business.

These events also could have indirect consequences

such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.

factors, or any combination thereof, could adversely affect our operations.

Any of these factors,

or any combination thereof, could adversely affect our operations.

Some of our restaurants are located on military bases.

Our strategy as of July 2019 is to continue to build corporately owned and operated non-traditional restaurants, including on

military bases, which in the event of a significant troop deployment, our total revenue and operating profits could be materially

adversely affected.

or disease outbreaks, such as the current novel coronavirus (COVID-19 virus) pandemic may disrupt our business, which could materially

affect our operations and results of operations.

or disease outbreaks such as the current novel coronavirus (COVID-19 virus) pandemic, have and may continue to impact customer traffic

at our restaurants, may make it more difficult to staff our restaurants and, in more severe cases, may cause a temporary inability to

obtain supplies, increase commodity costs or cause full and partial temporary closures of our affected restaurants, sometimes for prolonged

periods of time.

In the past, in response to local government requirements we have temporarily shifted to a “take-out, curbside

pickup or delivery” only operating model, temporarily suspending sit-down dining.

We and our franchisees have also implemented

temporary closures, modified hours of operation or reduced on-site staff, resulting in cancelled shifts for some of our employees.

may also materially adversely affect the timing to implement our growth plans as certain states and cities temporarily restrict business

operations and implement social distancing programs.

These changes and any additional changes may materially adversely affect our business

or results of operations particularly if these changes are in place for a significant amount of time.

In addition, our operations could

be disrupted if any of our employees or employees of our business partners were or are suspected of having COVID-19 or other illnesses

since this could require us or our business partners to quarantine some or all such employees or close and disinfect our restaurant facilities.

If a significant percentage of our workforce or the workforce of our business partners are unable to work, including because of illness

or travel or government restrictions in connection with pandemics or disease outbreaks (including the current COVID-19 pandemic), our

operations and financial condition may be negatively impacted.

We could also be adversely affected if government authorities impose additional

restrictions on public gatherings, human interactions, operations of restaurants or mandatory closures, seek voluntary closures, restrict

hours of operations or impose curfews, restrict the import or export of products or if suppliers issue mass recalls of products.

the expansion of our operations internationally, we could be adversely affected by violations of the U.S.

Foreign Corrupt Practices

Act and similar worldwide anti-bribery and anti-kickback laws.

Foreign Corrupt Practices Act

and similar worldwide anti-bribery and anti-kickback laws.

anticipate developing franchised locations located outside the United States.

Foreign Corrupt Practices Act, and other

similar anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making

improper payments to non-U.S.

Foreign Corrupt Practices Act, and other similar

anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper payments

officials for the purpose of obtaining or retaining business.

We cannot assure you that we will

be successful in preventing our franchisees or other agents from taking actions in violation of these laws or regulations.

violations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial

condition, results of operations and cash flows.

We currently have two franchise locations in Kuwait.

We cannot assure you that we will be successful in preventing

our franchisees or other agents from taking actions in violation of these laws or regulations.

Such violations, or allegations of such

violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and

We currently have two open franchise locations in Kuwait and a franchise development agreement for 40 locations in Saudi

of our board of directors and our executive officers will have other business interests and obligations to other entities.

our directors nor our executive officers will be required to manage the Company as their sole and exclusive function and they

may have other business interests and may engage in other activities in addition to those relating to the Company, provided that

such activities do not compete with the business of the Company or otherwise breach their agreements with the Company.

dependent on our directors and executive officers to successfully operate our Company.

Their other business interests and activities

could divert time and attention from operating our business

or disease outbreaks, such as the current novel coronavirus (COVID-19 virus) pandemic may disrupt our business, which could materially

affect our operations and results of operations.

or disease outbreaks such as the current novel coronavirus (COVID-19 virus) pandemic, have and may continue to impact customer

traffic at our restaurants, may make it more difficult to staff our restaurants and, in more severe cases, may cause a temporary

inability to obtain supplies, increase commodity costs or cause full and partial temporary closures of our affected restaurants,

sometimes for prolonged periods of time.

We have temporarily shifted to a “take-out, curbside pickup or delivery”

only operating model across all our company and franchise restaurants, temporarily suspending sit-down dining.

We and our franchisees

have also implemented temporary closures, modified hours of operation or reduced on-site staff, resulting in cancelled shifts

for some of our employees.

COVID-19 may also materially adversely affect the timing to implement our growth plans as certain states

and cities temporarily restrict business operations and implement social distancing programs.

These changes and any additional

changes may materially adversely affect our business or results of operations particularly if these changes are in place for a

significant amount of time.

In addition, our operations could be disrupted if any of our employees or employees of our business

partners were or are suspected of having COVID-19 or other illnesses since this could require us or our business partners to quarantine

some or all such employees or close and disinfect our restaurant facilities.

If a significant percentage of our workforce or the

workforce of our business partners are unable to work, including because of illness or travel or government restrictions in connection

with pandemics or disease outbreaks (including the current COVID-19 pandemic), our operations and financial condition may be negatively

We could also be adversely affected if government authorities impose additional restrictions on public gatherings, human

interactions, operations of restaurants or mandatory closures, seek voluntary closures, restrict hours of operations or impose

curfews, restrict the import or export of products or if suppliers issue mass recalls of products.

our directors nor our executive officers will be required to manage the Company as their sole and exclusive function and they may have

other business interests and may engage in other activities in addition to those relating to the Company, provided that such activities

do not compete with the business of the Company or otherwise breach their agreements with the Company.

We are dependent on our directors

and executive officers to successfully operate our Company.

Their other business interests and activities could divert time and attention

from operating our business

Related to Ownership of Our Common Stock and Lack of Liquidity

we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose

confidence in the accuracy and completeness of our financial reports and the market price of our Common Stock may decline.

a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses

in such internal control.

Further, we are required to report any changes in internal controls on a quarterly basis.

we must furnish a report by management on the effectiveness of internal control over financial reporting pursuant to Section 404

of the Sarbanes-Oxley Act.

As of December 31, 2020, we had material weakness in our internal controls.

We need to improve the

design, implementation, and testing of the internal controls over financial reporting required to comply with these obligations.

If we continue to identify material weaknesses in our internal control over financial reporting or are unable to remedy our existing

material weaknesses, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal

control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an

opinion as to the effectiveness of its internal control over financial reporting when required, investors may lose confidence

in the accuracy and completeness of our financial reports and the market price of the Common Stock could be negatively affected.

We also could become subject to investigations by the stock exchange on an exchange, Securities and Exchange Commission, or the

Commission, or other regulatory authorities, which could require additional financial and management resources.

In connection

with management’s assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley

Act of 2002, we identified the following material weaknesses in our internal control over financial reporting as of December 31,

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

do not have sufficient resources in our accounting function, which restricts our ability to gather, analyze and properly review

information related to financial reporting in a timely manner.

In addition, due to our size and nature, segregation of all

conflicting duties may not always be possible and may not be economically feasible.

However, to the extent possible, the initiation

of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.

have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on

a timely basis from non-financial personnel to those responsible for financial reporting.

have significant deficiencies in the design and implementation of IT controls, specifically in the following areas:

and network operations, access security and change management.

an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.

independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial

reporting while we are an emerging growth company.

This means that the effectiveness of our financial operations may differ from

our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the

effectiveness of their internal controls over financial reporting and we are not.

While our management will be required to attest

to internal control over financial reporting and we will be required to detail changes to our internal controls on a quarterly

basis, we cannot provide assurance that the independent registered public accounting firm’s review process in assessing

the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses

or significant deficiencies.

Further, once we cease to be an emerging growth company we will be subject to independent registered

public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting.

Even if management

finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness

of such internal controls and issue a qualified report.

a smaller reporting company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive

a smaller reporting company, we are exempt from certain disclosure requirements, which could make our Common Stock less attractive

to the potential investors.

12b-2 of the Exchange Act defines a “smaller reporting company”

as an issuer that is not an investment company, an

asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter,

computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates

by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the

principal market for the common equity;

the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we

refer to as the Exchange Act, for shares of its common equity, had a public float of less than $250 million as of a date within

30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of

such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the

number of such shares included in the registration statement by the estimated public offering price of the shares;

the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual

revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are

a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our

proxy statements;

12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed

issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed

by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the

price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market

for the common equity;

the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we refer to

as the Exchange Act, for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of

the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held

by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares

included in the registration statement by the estimated public offering price of the shares;

the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues

of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.

a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy

we will provide only two years of financial statements;

and we need not provide the table of selected financial

We also will have other “scaled”

disclosure requirements that are less comprehensive than issuers that are not

smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more

difficult for our stockholders to sell their shares.

a public company, we will incur significant increased costs as a result of operating as a public company, and our management will

be required to devote substantial time to new compliance initiatives.

and we need not provide the table of selected financial data.

also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting

companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders

to sell their shares.

are an emerging growth company and subject to less rigorous public reporting requirements and cannot be certain if the reduced reporting

requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

are a public reporting company under the Exchange Act, and thereafter publicly report on an ongoing basis as an “emerging growth

company” (as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act) under the reporting

rules set forth under the Exchange Act.

For so long as we remain an “emerging growth company”, we may take advantage of certain

exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging

growth companies”, including but not limited to:

being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

advantage of extensions of time to comply with certain new or revised financial accounting standards;

permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

exempt from the requirement to hold a non-binding advisory vote on executive compensations and stockholder approval of a golden parachute

payments not previously approved.

expect to take advantage of these reporting exemptions until we are no longer an emerging growth company.

We could be an emerging growth

company for up to five years, circumstances could cause us to lose that status earlier, including if the market value of our Common Stock

held by non-affiliates exceeds $700 million, if we issue $1 billion or more in non-convertible debt during a three-year period, or if

our annual gross revenues exceed $1 billion.

We would cease to be an emerging growth company on the last day of the fiscal year following

the date of the fifth anniversary of our first sale of common equity securities under an effective registration statement or a fiscal

year in which we have $1 billion in gross revenues.

Finally, at any time we may choose to opt-out of the emerging growth company reporting

requirements.

If we choose to opt out, we will be unable to opt back in to being an emerging growth company.

cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions.

If some investors find

our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may

be more volatile.

an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.

independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting

while we are an emerging growth company.

This means that the effectiveness of our financial operations may differ from our peer companies

in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal

controls over financial reporting and we are not.

While our management will be required to attest to internal control over financial

reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the

independent registered public accounting firm’s review process in assessing the effectiveness of our internal controls over financial

reporting, if obtained, would not find one or more material weaknesses or significant deficiencies.

Further, once we cease to be an emerging

growth company we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal

controls over financial reporting.

Even if management finds such controls to be effective, our independent registered public accounting

firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.

a public company, we will incur significant increased costs as a result of operating as a public company, and our management will be

required to devote substantial time to new compliance initiatives.

a public company, we have incurred significant legal, accounting and other expenses that we did not incur as a private company.

In addition, the Sarbanes-Oxley Act, and rules of the SEC and those of the NASDAQ Capital Market has imposed various requirements

on public companies including requiring establishment and maintenance of effective disclosure and financial controls.

Our management

and other personnel will need to devote a substantial amount of time to these compliance initiatives.

Moreover, these rules and

regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities

more time-consuming and costlier.

For example, we expect that these rules and regulations may make it more difficult and more

expensive for us to obtain directors’

and officers’

liability insurance, which could make it more difficult for us

to attract and retain qualified members of our board of directors.

We cannot predict or estimate the amount of additional costs

we will incur as a public company or the timing of such costs.

the rules of the SEC and those of the NASDAQ Capital Market has imposed various requirements on public companies including requiring

establishment and maintenance of effective disclosure and financial controls.

Our management and other personnel will need to devote

a substantial amount of time to these compliance initiatives.

Moreover, these rules and regulations have increased and will continue

to increase our legal and financial compliance costs and will make some activities more time-consuming and costlier.

For example, we

expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’

liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors.

cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.

Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure

controls and procedures.

In particular, we must perform system and process evaluation and testing of our internal control over

financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required

by Section 404 of the Sarbanes-Oxley Act.

In addition, we will be required to have our independent registered public accounting

firm attest to the effectiveness of our internal control over financial reporting the later of our second annual report on Form

10-K or the first annual report on Form 10-K following the date on which we are no longer an emerging growth company.

Our compliance

with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management

We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff

with appropriate public company experience and technical accounting knowledge.

If we are not able to comply with the requirements

of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our

internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline

and we could be subject to sanctions or investigations by the exchange we are listed on, the SEC or other regulatory authorities,

which would require additional financial and management resources.

In particular, we must perform system and process evaluation and testing of our internal control over financial

reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section

404 of the Sarbanes-Oxley Act.

In addition, we will be required to have our independent registered public accounting firm attest to the

effectiveness of our internal control over financial reporting the later of our second annual report on Form 10-K or the first annual

report on Form 10-K following the date on which we are no longer an emerging growth company.

Our compliance with Section 404 of the Sarbanes-Oxley

Act will require that we incur substantial accounting expense and expend significant management efforts.

We currently do not have an

internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and

technical accounting knowledge.

If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our

independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed

to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the

exchange we are listed on, the SEC or other regulatory authorities, which would require additional financial and management resources.

ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely and accurate

financial statements.

We expect that we will need to continue to improve existing, and implement new operational and financial

systems, procedures and controls to manage our business effectively.

Any delay in the implementation of, or disruption in the

transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude

that our internal control over financial reporting is effective and to obtain an unqualified report on internal controls from

our auditors as required under Section 404 of the Sarbanes-Oxley Act.

This, in turn, could have an adverse impact on trading prices

for our common stock, and could adversely affect our ability to access the capital markets.

are an emerging growth company and subject to less rigorous public reporting requirements and cannot be certain if the reduced

reporting requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

are a public reporting company under the Exchange Act, and thereafter publicly report on an ongoing basis as an “emerging

growth company”

(as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act) under

the reporting rules set forth under the Exchange Act.

For so long as we remain an “emerging growth company”, we may

take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies

that are not “emerging growth companies”, including but not limited to:

being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

advantage of extensions of time to comply with certain new or revised financial accounting standards;

permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy

exempt from the requirement to hold a non-binding advisory vote on executive compensations and stockholder approval of a golden

parachute payments not previously approved.

expect to take advantage of these reporting exemptions until we are no longer an emerging growth company.

We could be an emerging

growth company for up to five years, circumstances could cause us to lose that status earlier, including if the market value of

our Common Stock held by non-affiliates exceeds $700 million, if we issue $1 billion or more in non-convertible debt during a

three-year period, or if our annual gross revenues exceed $1 billion.

We would cease to be an emerging growth company on the last

day of the fiscal year following the date of the fifth anniversary of our first sale of common equity securities under an effective

registration statement or a fiscal year in which we have $1 billion in gross revenues.

Finally, at any time we may choose to opt-out

of the emerging growth company reporting requirements.

If we choose to opt out, we will be unable to opt back in to being an emerging

growth company.

cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions.

If some investors

find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock

price may be more volatile.

our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares.

Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

are generally equity securities with a price per share of less than $5.00, other than securities registered on certain national

securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume

information with respect to transactions in such securities is provided by the exchange or system.

If we do not obtain or retain

a listing on the NYSE American or NASDAQ Capital Market and if the price of our Common Stock is less than $5.00 per share, our

Common Stock will be deemed a penny stock.

The penny stock rules require a broker-dealer, before effecting a transaction in a

penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock rules require that, before effecting any such transaction in a penny stock not otherwise exempt from

those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser

and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement;

(ii) a written agreement

to transactions involving penny stocks;

and (iii) a signed and dated copy of a written suitability statement.

These disclosure

requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore

stockholders may have difficulty selling their shares.

sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

addition to the “penny stock”

rules described above, FINRA has adopted rules that require that in recommending an

investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that

Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make

reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other

The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our Common

Stock, which may have the effect of reducing the level of trading activity in our Common Stock.

As a result, fewer broker-dealers

may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our Common Stock.

We expect that we will need to continue to improve existing, and implement new operational and financial systems,

procedures and controls to manage our business effectively.

Any delay in the implementation of, or disruption in the transition to, new

or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control

over financial reporting is effective and to obtain an unqualified report on internal controls from our auditors as required under Section

404 of the Sarbanes-Oxley Act.

This, in turn, could have an adverse impact on trading prices for our common stock, and could adversely

affect our ability to access the capital markets.

Financial Industry Regulatory Authority (“FINRA”) sales practice requirements may limit a stockholder’s ability to

buy and sell our stock.

addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment

to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.

recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to

obtain information about the customer’s financial status, tax status, investment objectives and other information.

The FINRA requirements

may make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing

the level of trading activity in our Common Stock.

As a result, fewer broker-dealers may be willing to make a market in our common stock,

reducing a stockholder’s ability to resell shares of our Common Stock.

stock price may be volatile.

market price of our Common Stock has been highly volatile and could fluctuate widely in price in response to various potential

factors, many of which will be beyond the Company’s control, including the following:

market price of our Common Stock has been highly volatile and could fluctuate widely in price in response to various potential factors,

many of which will be beyond the Company’s control, including the following:

by the Company or its competitors;

or departures of key personnel;

Company’s ability to execute its business plan;

results that fall below expectations;

3 unchanged sentences

period-to-period

fluctuations in the Company’s financial results.

addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated

to the operating performance of particular companies.

These market fluctuations may also materially and adversely affect the market

price of the Company’s common stock.

fluctuations in the Company’s financial results.

addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the

operating performance of particular companies.

These market fluctuations may also materially and adversely affect the market price of

the Company’s common stock.

securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business,

our share price and trading volume could decline.

trading market for our common stock will, to some extent, depends on the research and reports that securities or industry analysts

publish about us or our business.

trading market for our common stock will, to some extent, depends on the research and reports that securities or industry analysts publish

about us or our business.

We do not have any control over these analysts.

If one or more of the analysts who cover us

downgrade our shares or change their opinion of our shares, our share price would likely decline.

If one or more of these analysts

cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could

cause our share price or trading volume to decline.

If one or more of the analysts who cover us downgrade our shares

or change their opinion of our shares, our share price would likely decline.

If one or more of these analysts cease coverage of us or

fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading

volume to decline.

do not intend to pay dividends for the foreseeable future, which could reduce the attractiveness of our stock to some investors.

currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to

declare or pay any dividends in the foreseeable future.

As a result, you may only receive a return on your investment in our common

stock if the market price of our common stock increases.

In addition, we may incur debt financing to further finance our operations,

the governing documents of which may contain restrictions on our ability to pay dividends.

in our articles of incorporation and bylaws and Nevada law may discourage, delay or prevent a change of control of our company

and, therefore, may depress the trading price of our stock.

articles of incorporation and bylaws contain certain provisions that may discourage, delay or prevent a change of control that

our stockholders may consider favorable.

currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare

or pay any dividends in the foreseeable future.

As a result, you may only receive a return on your investment in our common stock if

the market price of our common stock increases.

In addition, we may incur debt financing to further finance our operations, the governing

documents of which may contain restrictions on our ability to pay dividends.

we are unable to maintain listing of our securities on the Nasdaq Capital Market or another reputable stock exchange, it may be more

difficult for our stockholders to sell their securities.

requires listing issuers to comply with certain standards in order to remain listed on its exchange.

If, for any reason, Nasdaq should

delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange,

a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders.

have received a delisting notice form the NASDAQ Stock Market due to the closing bid price of our common stock had been below $1.00 per

share for the previous 30 consecutive business days, and that we are therefore not in compliance with the minimum bid price requirements.

Our common stock may be involuntarily delisted from the NASDAQ Capital Market if we fail to regain compliance with the minimum closing

bid price requirement of $1.00 per share.

The quantitative listing standards of The NASDAQ Stock Market, or NASDAQ, require, among other

things, that listed companies maintain a minimum closing bid price of $1.00 per share.

We failed to satisfy this threshold for 30 consecutive

trading days and on February 1, 2022, we received a letter from NASDAQ indicating that we had an initial period of 180 calendar days,

or until August 1, 2022, in which to regain compliance.

In addition, we are able to apply for a 180-day extension period if we cannot

meet the initial period.

A delisting of our common stock is likely to reduce the liquidity of our common stock and may inhibit or preclude

our ability to raise additional financing.

our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares.

Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.

Penny stocks are

generally equity securities with a price per share of less than $5.00, other than securities registered on certain national securities

exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with

respect to transactions in such securities is provided by the exchange or system.

If we do not obtain or retain a listing on the NYSE

American or NASDAQ Capital Market and if the price of our Common Stock is less than $5.00 per share, our Common Stock will be deemed

a penny stock.

The penny stock rules require a broker-dealer, before effecting a transaction in a penny stock not otherwise exempt from

those rules, to deliver a standardized risk disclosure document containing specified information.

In addition, the penny stock rules

require that, before effecting any such transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make

a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s

written acknowledgment of the receipt of a risk disclosure statement;

(ii) a written agreement to transactions involving penny stocks;

and (iii) a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the

trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares.

in our articles of incorporation and bylaws and Nevada law may discourage, delay or prevent a change of control of our Company and, therefore,

may depress the trading price of our stock.

articles of incorporation and bylaws contain certain provisions that may discourage, delay or prevent a change of control that our stockholders

may consider favorable.

These provisions:

2 unchanged sentences

our stockholders from calling a special meeting of stockholders;

advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted

upon by stockholders at stockholder meetings.

advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon

by stockholders at stockholder meetings.

may be subject to securities litigation, which is expensive and could divert management attention.

the past companies that have experienced volatility in the market price of their stock have been subject to securities class action

the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.

We may be the target of this type of litigation in the future.

Litigation of this type could result in substantial

costs and diversion of management’s attention and resources, which could seriously hurt our business.

Any adverse determination

in litigation could also subject us to significant liabilities.

STAFF COMMENTS .

Litigation of this type could result in substantial costs and diversion

of management’s attention and resources, which could seriously hurt our business.

Any adverse determination in litigation could

also subject us to significant liabilities.

UNRESOLVED STAFF COMMENTS.

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 1A. Risk Factors