Registrant’s telephone number, including area code: ~~(682)~~(832)604-9568-~~708-8250~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~submit)~~submit and post such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer,”~~filer” and “smaller reporting ~~company,” and “emerging growth~~ company” in Rule 12b-2 of the Exchange ~~Act.~~Act (check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act):. Yes ☐ No☒

The number of shares if the Registrant’s common stock, $0.0001 par value per share, outstanding as of August ~~16, 2021,~~11, 2022, was ~~17,720,364~~28,773,335.

							June 30,			December 31,
	June 30, 2021			December 31, 2020			2022			2021

Assets
Current Assets:
Cash	$	4,971,621		$	4,195,932		$	13,465,538		$	15,766,703
Accounts receivable, net of allowance for doubtful accounts of $75,000 as of June 30, 2021 and December 31, 2020, respectively		280,434			140,305
Accounts receivable, net of allowance for doubtful accounts of $8,230 and $23,693 as of June 30, 2022 and December 31, 2021, respectively								353,115			155,167
Inventory		169,103			113,824			213,549			258,785
Current portion of loans receivable, net of allowance of $61,275 and $106,900 at June 30, 2021 and December 31, 2020, respectively		6,556			2,394
Current portion of loans receivable, net of allowance of $4,032 and $71,184 at June 30, 2022 and December 31, 2021, respectively								-			-
Prepaid expenses and other current assets		91,739			40,903			595,440			1,789,328
Total Current Assets		5,519,453			4,493,358			14,627,642			17,969,983
Right to use assets								2,536,932			-
Property and equipment, net		2,549,717			2,342,723			2,023,787			2,280,267
Goodwill		2,661,564			656,348			2,626,399			2,626,399
Intangible assets, net		8,003,269			2,878,278			5,678,589			6,387,464
Loans receivable, non-current		-			996
Prepaid expense, Security deposits and other assets		229,799			131,916
Security deposits and other assets								179,278			167,770
Total Assets	$	18,963,802		$	10,503,619		$	27,672,627		$	29,431,883

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses	$	2,006,882		$	1,500,935		$	1,597,175		$	2,208,523
Convertible notes payable to Former Parent		82,458			82,458
Convertible notes payable		100,000			100,000
Other notes payable, current		124,348			701,552
Convertible note payable to Former Parent								82,458			82,458
Convertible note payable								50,000			100,000
Other notes payable								127,084			165,052
Operating lease liability, current								561,623			-
Deferred revenue, current		54,437			62,858			83,144			49,728
Deferred rent, current		73,741			20,569			-			36,800
Other current liabilities		651,951			641,418			195,429			286,088
Total Current Liabilities		3,093,817			3,109,790			2,696,913			2,928,649
Other notes payable, non-current		1,257,426			575,140			838,260			1,005,027
Operating lease liability, non-current								2,129,600			-
Deferred revenue, non-current		1,030,305			944,271			1,208,523			1,013,645
Deferred rent, non-current		35,964			79,290			-			91,295
Total Liabilities		5,417,512			4,708,491			6,873,296			5,038,616

Commitments and Contingencies		-			-			-			-

Stockholders’ Equity:
Common stock, $0.0001 par value, 25,000,000 shares authorized, 17,689,454 and 11,725,764 shares issued and outstanding as of June 30, 2021, and December 31, 2020, respectively		1,769			1,172
Common stock, $0.0001 par value, 50,000,000 shares authorized, 28,699,316 and 26,110,268 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively								2,870			2,611
Additional paid-in capital		81,572,113			68,987,663			95,849,320			95,760,493
Accumulated deficit		(68,027,592	)		(63,193,707	)		(75,052,859	)		(71,369,837	)
Total Stockholders’ Equity		13,546,290			5,795,128			20,799,331			24,393,267
Total Liabilities and Stockholders’ Equity	$	18,963,802		$	10,503,619		$	27,672,627		$	29,431,883

	2021			2020			2021			2020
	For the Three Months Ended						For the Six Months Ended						2022			2021			2022			2021
	June 30,						June 30,						For the Three Months Ended						For the Six Months Ended
	2021			2020			2021			2020			June 30,						June 30,
													2022			2021			2022			2021
Revenues:
Company restaurant sales, net of discounts	$	2,564,864		$	659,939		$	3,743,775		$	1,897,366		$	2,750,734		$	2,564,864		$	5,444,926		$	3,743,775
Franchise royalties and fees		169,549			142,293			304,889			318,324			162,480			135,250			370,621			241,935
Franchise advertising fund contributions		4,742			32,454			18,829			54,050			16,170			4,742			34,295			18,829
Total Revenues		2,739,155			834,686			4,067,493			2,269,740			2,929,384			2,704,856			5,849,842			4,004,539

Operating Costs and Expenses:
Restaurant operating expenses:
Food and beverage costs		920,691			255,329			1,425,152			721,023			1,117,419			886,392			2,143,354			1,362,198
Labor		903,772			342,823			1,670,837			929,443			903,062			888,895			1,976,109			1,643,059
Rent		304,930			139,604			561,121			284,281			326,819			304,930			667,215			561,121
Other restaurant operating expenses		652,251			100,552			992,173			432,912			687,823			666,946			1,337,547			1,019,769
Total restaurant operating expenses		2,781,644			838,308			4,649,283			2,367,659			3,035,123			2,747,163			6,124,225			4,586,147
Preopening expenses		-			46,764			10,986			46,764
Depreciation and amortization		284,646			97,245			453,774			208,502			489,654			284,646			965,381			453,774
Franchise advertising fund expenses		4,742			32,454			18,829			54,050			16,170			4,742			34,295			18,829
General and administrative expenses		1,995,319			1,213,851			4,961,955			6,343,254
Preopening expenses														-			-			-			10,986
Selling, general and administrative expenses														1,126,857			1,994,003			2,451,334			4,960,639
Total Costs and Expenses		5,066,351			2,228,622			10,094,827			9,020,229			4,667,804			5,030,554			9,575,235			10,030,375
Loss from Operations		(2,327,196	)		(1,393,936	)		(6,027,334	)		(6,750,489	)		(1,738,420	)		(2,325,698	)		(3,725,393	)		(6,025,836	)

Other Income (Expense):
Other income (expense), net		223,681			(10,360	)		226,309			(13,548	)
Other Income (Expenses) :
Other income (expense)														(14,468	)		223,681			(33,889	)		226,309
Interest expense, net		(22,160	)		(1,129	)		(36,334	)		(94,733	)		(9,945	)		(22,596	)		(28,437	)		(36,770	)
Change in fair value of accrued compensation		127,500			(96,000	)		127,500			(96,000	)		-			127,500			-			127,500
Gain on extinguishment of debt		875,974			-			875,974			-
Amortization of debt discounts		-			-			-			(38,918	)
Total Other Income (Expense), Net		1,204,995			(107,489	)		1,193,449			(243,199	)
Gain on debt extinguishment														-			875,974			141,279			875,974
Total Other Income (Expenses), Net														(24,413	)		1,204,559			78,953			1,193,013

Loss Before Income Tax		(1,122,201	)		(1,501,425	)		(4,833,885	)		(6,993,688	)		(1,762,833	)		(1,121,139	)		(3,646,440	)		(4,832,823	)
Income tax provision		-			-			-			-			(11,311	)		(1,062	)		(13,783	)		(1,062	)
Net Loss	$	(1,122,201	)	$	(1,501,425	)	$	(4,833,885	)	$	(6,993,688	)	$	(1,774,144	)	$	(1,122,201	)	$	(3,660,223	)	$	(4,833,885	)

Net Loss Per Share:
Basic and Diluted	$	(0.07	)	$	(0.21	)	$	(0.36	)	$	(1.01	)		(0.06	)		(0.16	)		(0.13	)		(0.70	)

Weighted Average Number of Common Shares Outstanding:
Basic and Diluted		15,381,855			7,092,879			13,612,127			6,916,218			28,668,116			6,916,218			28,235,052			6,916,218

	2021			2020			2022			2021
	For the Six Months Ended						For the Six Months Ended
	June 30,						June 30,
	2021			2020			2022			2021

Cash Flows from Operating Activities
Net loss	$	(4,833,885	)	$	(6,993,688	)	$	(3,660,223	)	$	(4,833,885	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		453,774			208,502			965,381			453,774
Stock-based compensation		1,727,545			3,625,220			89,086			1,727,545
Amortization of debt discounts		-			38,918
Gain on extinguishment of debt		(875,974	)		-
Write off of property and equipment		37,027			-
Gain on extinguishments of debt								(141,279	)		(875,974	)
Loss on disposal of assets								266,573			37,027
Loss on change in fair value of accrued compensation		(127,500	)		96,000			-			(127,500	)
Bad debt expense		18,676			-			(58,692	)		18,676
Deferred rent		(21,471	)		17,829

Changes in operating assets and liabilities:
Accounts receivable		(102,563	)		(33,080	)
Accounts receivable, net								(123,256	)		(102,563	)
Inventory		(35,779	)		21,962			45,236			(35,779	)
Prepaid expenses and other current assets		(107,139	)		24,023			1,193,888			(107,139	)
Security deposits and other assets		(6,000	)		(34,600	)		(11,508	)		(6,000	)
Accounts payable and accrued expenses		208,164			(688,509	)		(611,348	)		208,164
Deferred rent								(128,095	)		(21,471	)
Operating right of use asset and lease liability, net								131,492			-
Deferred revenue		(45,803	)		(109,738	)		228,294			(45,803	)
Other current liabilities		10,533			(6,970	)		(90,659	)		10,533
Total Adjustments		1,133,490			3,159,557			1,755,113			1,133,490
Net Cash Used in Operating Activities		(3,700,395	)		(3,834,131	)		(1,905,110	)		(3,700,395	)

Cash Flows from Investing Activities
Purchases of property and equipment		(98,257	)		(172,387	)		(282,999	)		(98,257	)
Cash paid in connection with the acquisition of SuperFit Foods		(500,000	)		-			-			(500,000	)
Cash paid in connection with the acquisition of Pokemoto		(2,815,390	)		-			-			(2,815,390	)
Cash paid in connection with the acquisition
Collections from loans receivable		800			8,802			400			800
Net Cash Used in Investing Activities		(3,412,847	)		(163,585	)		(282,599	)		(3,412,847	)

Cash Flows from Financing Activities
Proceeds from offering, net of underwriter’s discount and offering costs of $920,000		-			6,780,000
Proceeds from Private Placement offering, net of offering cost								-			9,181,350
Proceeds from PPP loan		-			866,300			-			28,652
Proceeds from Private Placement offering, net of offering costs		9,181,350			-
Proceeds from exercised of pre-funded warrants		28,652			-
Repayments of convertible note payable		-			(550,000	)
Cash paid in connection with the cancellation of shares		(100,000	)		-			-			(100,000	)
Repayments of other notes payable - related party		-			(91,000	)
Repayments of convertible note								(50,000	)		-
Repayments of other notes payables		(1,221,071	)		(475,243	)		(63,456	)		(1,221,071	)
Proceeds from other notes payable – related party		-			150,000
Net Cash Provided by Financing Activities		7,888,931			6,680,057
Net Cash (Used in) Provided by Financing Activities								(113,456	)		7,888,931

Net Increase in Cash		775,689			2,682,341
Net (Decrease) Increase in Cash								(2,301,165	)		775,689
Cash - Beginning of Period		4,195,932			478,854			15,766,703			4,195,932
Cash - End of Period	$	4,971,621		$	3,161,195		$	13,465,538		$	4,971,621

NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS ~~GOING CONCERN AND MANAGEMENT’S PLANS~~

Muscle Maker, Inc. (“MMI”), a Nevada corporation was incorporated in Nevada on October 25, 2019. MMI was a wholly owned subsidiary of Muscle Maker, Inc (“MMI-Cal”), a California corporation incorporated on December 8, 2014, but the two merged on November 13, 2019 with MMI as the surviving entity. MMI wholly owns Muscle Maker Development, LLC (“MMD”), Muscle Maker Corp, LLC (“MMC”) and Muscle Maker USA, Inc (“Muscle USA”). MMD was formed on July 18, 2017, in the State of Nevada for the purpose of running our existing franchise operations and continuing to franchise the Muscle Maker ~~Grill®~~Grill name and business system to qualified franchisees. MMC was formed on July 18, 2017, in the State of Nevada for the purpose of developing new corporate stores and operating new and existing corporate stores of MMI. Muscle USA was formed on March 14, 2019 in the State of Texas for the purpose of opening additional new corporate stores. Muscle Maker Development International. LLC, a directly wholly owned subsidiary, which was formed in Nevada on November 13, 2020 to franchise the Muscle Maker Grill name and business system to qualified franchisees internationally.

MMI is a fast-casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based meals featuring chicken, seafood, pasta, hamburgers, wraps and flat breads. In addition, our restaurants feature freshly prepared entrée salads and an appealing selection of sides, protein shakes and fruit smoothies. MMI operates in the fast-casual restaurant segment.

MMI is the owner of the trade name and service mark Muscle Maker Grill®~~, Healthy Joe’s~~ and other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill® restaurants. We license the right to use the Muscle Maker Grill® ~~and Healthy Joe’s trademarks~~trademark and intellectual property to our wholly-owned subsidiaries, MMD, MMC and Muscle USA, and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill® ~~and Healthy Joe’s restaurants.~~.

On March 25, 2021, MMI acquired the assets of ~~Superfit~~SuperFit Foods, a subscription based fresh-prepared meal prep business located in Jacksonville, Florida. With this acquisition, we are also the owner of the trade name ~~Superfit~~SuperFit Foods that we use in connection with the operations of ~~Superfit~~SuperFit Foods. ~~In 2020 Superfit foods produced overs 220,000 fresh-prepared meals. Superfit~~SuperFit Foods is differentiated from other meal prep services by allowing customers in the Jacksonville Florida market to order online via the ~~company’s~~Company’s website or mobile app and pick up their fully prepared meals from ~~28 company owned~~29 Company-owned coolers located in gyms and wellness centers.

On May 14, 2021, MMI acquired PKM Stamford, LLC, Poke Co., LLC, LB Holdings LLC, ~~and~~ TNB Holdings, LLC, Poke Co Holdings LLC, GLL Enterprises, LLC, and TNB Holdings II, LLC, each a Connecticut limited liability company (collectively, Pokemoto”), a healthier modern culinary twist on the traditional Hawaiian poke classic. Pokemoto ~~has thirteen~~had, at acquisition, fourteen locations in four states – Connecticut, Rhode Island, Massachusetts, and Georgia and offers up chef-driven contemporary flavors with fresh delectable and healthy ingredients such as Atlantic salmon, sushi-grade tuna, fresh mango, roasted cashews and black caviar tobiko that appeals to foodies, health enthusiasts, and sushi-lovers everywhere. The colorful dishes and modern chic dining rooms provide an uplifting dining experience for guests of all ages. Customers can dine in-store or order online via third party delivery apps for contactless delivery.

~~The Company operates under the name SuperFit Foods, Pokemoto and Muscle Maker Grill and is a franchisor and owner operator of Muscle Maker Grill, Healthy Joe’s and Pokemoto restaurants.~~ As of June 30, ~~2021, the Company’s restaurant system included twenty-five company-owned restaurants, and fourteen franchise restaurants. Seven~~2022, MMI consisted of ~~the company-owned restaurants are delivery-only locations, including SuperFit Foods. In addition, not included in the store count, the Company built~~ four ~~new locations on university campuses but due to Covid-19 restrictions have not yet opened these locations but incurred expenses during the twelve months ended December 31, 2020.~~operating segments:

NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS, ~~GOING CONCERN AND MANAGEMENT’S PLANS,~~ continued

~~COVID-19~~Non-Traditional (Hybrid) Division is a combination of the aforementioned brands and provides its own unique experience for the consumer. Non-Traditional (Hybrid) locations are designed for unique locations such as universities, military bases and cloud kitchens.

The ~~COVID-19 global pandemic continues to rapidly evolve. The~~ Company operates under the name Muscle Maker Grill, Pokemoto and SuperFit Foods and is ~~continually monitoring the outbreak~~a franchisor and owner operator of ~~COVID-19~~Muscle Maker Grill and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, labor shortages resulting from various factors including mandatory vaccination requirements, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. The pandemic has resulted in a negative impact onPokemoto restaurants. As of June 30, 2022, the Company’s ~~operations during~~restaurant system included nineteen Company-owned restaurants, including the ~~year ended December 31, 2020~~SuperFit Foods kitchen, and continued into the six months ended June 30, 2021. However, due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be an additional material impact on operations and liquidity of the Company, the full impact could not be determined, as of the date of this report.eighteen franchise restaurants.

Our primary source of liquidity is cash on hand. As of June 30, ~~2021,~~2022, the Company had a cash balance, a working capital surplus and an accumulated deficit of $~~4,971,621~~13,465,538, $~~2,425,636~~11,930,729, and $~~68,027,592~~75,052,859, respectively. During the three and six months ended June 30, ~~2021,~~2022, the Company incurred a pre-tax net loss of $~~1,122,201~~ 1,762,833and $~~4,833,885~~3,646,440, respectively, and net cash used in operations of $1,905,110 and $3,700,395 for the six months ended June 30, 2022 and 2021, respectively. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of the issuance of these condensed consolidated financial statements.

~~Although management~~The Company believes that ~~the Company has access to capital resources, there are no commitments in place for new financing as of the date of the issuance of these condensed consolidated financial statements~~its existing cash on hand and ~~there can be no assurance that the Company~~future cash flows from our franchise operations, will be able to obtain funds on commercially acceptable terms, if at all. The Company expects to have ongoing needs for working capital in order to (a) fund operations; plus (b) expand operations by opening additional corporate-owned restaurants. To that end, the Company may be required to raise additional funds through equity or debt financing. However, there can be no assurance that the Company will be successful in securing additional capital. If the Company is unsuccessful, the Company may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of timesufficient to fund ~~its liabilities, or (d) seek protection from creditors.~~our operations, anticipated capital expenditures and repayment obligations over the next twelve months.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, ~~2021,~~2022, and for the three and six months ended June 30, ~~2021,~~2022, and ~~2020.~~2021. The results of operations for the three and six months ended June 30, ~~2021,~~2022, are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto for the year ended December 31, ~~2020.~~2021. The balance sheet as of December 31, ~~2020~~2021, has been derived from the Company’s audited financial statements.

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and majority-owned subsidiary. Any intercompany transactions and balances have been eliminated in consolidation.

Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on the previously reported results of operations or loss per share.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Any intercompany transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates include:

Estimates and assumptions are periodically reviewed, and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

~~The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were~~ 0~~cash equivalents as of June 30, 2021 and December 31, 2020.~~

Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term of the related asset. The estimated useful lives are as follows:

~~Smallware, which consists of pots, pans and other cooking utensils, is carried at cost and any replacements are expensed when acquired.~~

~~We account~~The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were 0 cash equivalents as of June 30, 2022 or December 31, 2021.

Inventories, which are stated at the lower of cost or net realizable value, consist primarily of perishable food items and supplies. Cost is determined using the first-in, first out method.

The Company accounts for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, ~~we do~~the Company does not amortize intangible assets ~~with~~having indefinite useful lives. ~~Our~~The Company’s trademark – Muscle Maker had an indefinite live as of December 31, 2021. The Company determined that as of January 1, 2022, the trademark - Muscle Maker had a finite life of 3 years and will be amortizing the value over the new estimated life. The Company’s goodwill has an indefinite life, and ~~one of our trademarks are deemed to have indefinite lives, and~~is accordingly ~~are~~ not amortized, but are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment.

~~Other intangible assets include a trademark with an indefinite useful life.~~ The other intangible assets estimated original useful lives are as follows:

~~In February 2016,~~When circumstances, such as adverse market conditions, indicate that the ~~FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires~~carrying value of a long-lived asset may be impaired, the Company performs an ~~entity~~analysis to ~~recognize assets~~review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and ~~liabilities arising from a lease for both financing and operating leases. ASU 2016-02 will also require new qualitative and quantitative disclosures to help investors~~prospects, as well as the effects of demand, competition and other ~~financial statement users better understand~~factors. If the ~~amount, timing, and uncertainty of~~analysis indicates that the carrying value is not recoverable from future cash flows, ~~arising from leases. ASU 2016-02~~an impairment loss is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its condensed consolidated financial statements and disclosures.recognized to the extent that the carrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses, which reduce net income.

In June 2018, the FASB issued ASU No. 2018-07, “Compensation — Stock Compensation (Topic 718),” (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for nonemployee share-based payments. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. ASU 2018-07 expands the scope of Topic 718, Compensation — Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. This ASU supersedes Subtopic 505-50, Equity — Equity-Based Payments to Nonemployees. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted, but no earlier than a Company’s adoption date of Topic 606, Revenue from Contracts with Customers. Convertible Instruments

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

If the instrument is ~~currently evaluating ASU 2018-07~~determined not to be a derivative liability, the Company then evaluates for the existence of a beneficial conversion feature by comparing the market price of the Company’s common stock as of the commitment date to the effective conversion price of the instrument.

As of June 30, 2022 and ~~its impact on~~December 31, 2021, the ~~condensed consolidated financial statements.~~Company deemed the conversion feature was not required to be bifurcated and recorded as a derivative liability.

~~In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” (“ASU 2018-10”).~~ The ~~amendments in ASU 2018-10 provide additional clarification~~Company’s revenues consist of restaurant sales, franchise royalties and ~~implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”)~~fees, franchise advertising fund contributions, and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for emerging growth companies for interim and annual reporting periods beginning after December 15, 2021, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements.other revenues. The Company ~~is currently assessing the impact this guidance will have on its condensed consolidated financial statements.~~

~~In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” (“ASU 2018-11”). The amendments in ASU 2018-11 related~~recognized revenues according to transition relief on comparative reporting at adoption affect all entities with lease contracts that choose the additional transition method and separating components of a contract affect only lessors whose lease contracts qualify for the practical expedient. The amendments in ASU 2018-11 are effective for emerging growth companies for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company is currently assessing the impact this guidance will have on its condensed consolidated financial statements.

In March 2019, the FASB issued ASU 2019-01, “Leases (Topic 842): Codification Improvements” (“Topic 842”) (“ASU 2019-01”). These amendments align the guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers in Topic 842 with that of existing guidance. As a result, the fair value of the underlying asset at lease commencement is its cost, reflecting any volume or trade discounts that may apply. However, if there has been a significant lapse of time between when the underlying asset is acquired and when the lease commences, the definition of fair value (in Topic 820, Fair Value Measurement) should be applied. (Issue 1). The ASU also requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities. (Issue 2). Finally, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. (Issue 3). The transition and effective date provisions apply to Issue 1 and Issue 2. They do not apply to Issue 3 because the amendments for that Issue are to the original transition requirements in Topic 842. On June 3, 2020, the FASB issued ASU 2020-05 that extended the adoption to fiscal years beginning after December 15, 2021, with interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating ASU 2019-01 and its impact on its unaudited condensed consolidated financial statements and financial statement disclosures.

Based upon the evaluation and transactions, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 13 – Subsequent Events.

~~In accordance with the Accounting Standards Codification~~ Topic 606 “Revenue from Contracts with Customers”,. Under the ~~Company~~guidance, revenue is recognized ~~revenue~~ in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when (or as) the entity satisfies a performance obligation. In applying this five-step model, we ~~have~~ made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations.

Retail store revenue at ~~Company operated~~Company-operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, ~~discount~~discounts and other sales related taxes. The Company recorded retail store revenues of $2,750,734 and $5,444,926 during the three and six months ended June 30, 2022, respectively, and $2,564,864and $3,743,775during the three and six months ended June 30, 2021, ~~respectively. The Company recorded retail store revenues of $659,939~~ ~~and $1,897,366~~ ~~during the three and six months ended June 30, 2020,~~ respectively.

The Company sells gift cards which do not have an expiration date, and it does not deduct dormancy fees from outstanding gift card balances. The Company recognizes revenues from gift cards as restaurant revenues once the Company performs its obligation to provide food and beverage to the customer simultaneously with the redemption of the gift card or through gift card breakage, as discussed in Other Revenues below.

Franchise revenues consists of royalties, franchise fees and rebates. Royalties are based on a percentage of franchisee net sales revenue. The Company recognizes the royalties as the underlying sales occur. The Company recorded revenue from royalties of $121,001 and $229,422 during the three and six months ended June 30, 2022, respectively, and $104,430and $185,899during the three and six months ended June 30, 2021, respectively, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. ~~The Company recorded revenue from royalties of $52,870~~ ~~and $173,779~~ ~~during the three and six months ended June 30, 2020, respectively, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations.~~

The Company provides the franchisees with management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for the multi-unit development fees and franchise fees. The Company capitalizes these fees upon collection from the franchisee, these fees are then recognized as franchise fee revenue on a straight-line basis over the life of the related franchise agreements and any exercised renewal periods. Cash payments are due upon the execution of the related franchise agreement. The Company’s performance obligation with respect to franchise fee revenues consists of a license to utilize the Company’s brand for a specified period of time, which is satisfied equally over the life of each franchise agreement. The Company recorded ~~revenues~~revenue from franchise fees of $~~12,352~~ 15,315and $~~22,138~~64,206~~, respectively,~~ during the three and six ~~months~~month ended June 30, ~~2021, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. The Company recorded revenues from franchise fees of $75,190~~ 2022, respectively, and $~~89,630~~12,352 and $22,138~~, respectively,~~ during the three and six ~~months~~month ended June 30, ~~2020,~~2021, respectively which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations.

The Company has supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to the Company based upon the dollar volume of purchases for all company-owned and franchised restaurants from these vendors. Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made. The Company recorded revenue from rebates of $~~52,767~~ 26,164and $~~96,852~~ 76,993 during the three and six months ended June 30, 2022, respectively, and $18,468 and $33,898during the three and six months ended June 30, 2021, respectively, which is included in franchise royalties and fees on the accompanying ~~consolidated statements of operations. The Company recorded revenue from rebates of $14,233~~ ~~and $54,915~~ ~~during the three and six months ended June 30, 2020, respectively, which is included in franchise royalties and fees on the accompanying~~condensed consolidated statements of operations. Rebates earned on purchases by ~~Company owned~~Company-owned stores are recorded as a reduction of food and beverage costs during the period in which the related food and beverage purchases are made.

Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage on a pro rata basis over the period of estimated redemption. Gift card liability is recorded in other current liabilities on the condensed consolidated balance sheet. For the three and six months ended June 30, 2021 and 2020, respectively, the Company determined that no gift card breakage is necessary based on current redemption rates.

Deferred revenue primarily includes initial franchise fees received by the Company, which are being amortized over the life of the Company’s franchise agreements, as well as unearned vendor rebates. Deferred revenue is recognized in income over the life of the franchise agreements and vendor rebates are recognized in income as performance obligations are satisfied.

Under the Company’s franchise agreements, the Company and its franchisees are required to contribute a certain percentage of revenues to a national advertising fund. The Company’s national advertising services are provided on a system-wide basis and therefore, not considered distinct performance obligations for individual franchisees. In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense. The Company records the related advertising expenses as incurred under selling, general and administrative expenses. When an advertising contribution fund is over-spent at year end, advertising expenses will be reported on the condensed consolidated statement of operations in an amount that is greater than the revenue recorded for advertising contributions. Conversely, when an advertising contribution fund is under-spent at a period end, the Company will accrue advertising costs up to advertising contributions recorded in revenue. The Company recorded contributions from franchisees of $16,170 and $34,295 during the three and six months ended June 30, 2022, respectively, and $4,742and $18,829~~, respectively,~~ during the three and six months ended June 30, 2021, respectively, which are included in franchise advertising fund contributions on the accompanying condensed consolidated statements of operations.

Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The ~~Company~~determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. Gift card liability is recorded ~~contributions from franchisees of $32,454~~ ~~and $54,050, respectively, during~~in other current liabilities on the condensed consolidated balance sheet. For the three and six months ended June 30, ~~2020,~~2022 and 2021, respectively, the Company did not record any gift card breakage.

Deferred revenue primarily includes initial franchise fees received by the Company, which are ~~included~~being amortized over the life of the Company’s franchise agreements. Deferred revenue is recognized in income over the life of the franchise ~~advertising fund contributions on the accompanying condensed consolidated statements of operations.~~agreements and vendor rebates are recognized in income as performance obligations are satisfied.

Advertising costs are charged to expense as incurred. Advertising costs were approximately $~~11,143~~ 750and $~~24,758~~ 101,146 during the three and six months ended June 30, 2022, respectively, and $34,152 and $~~for~~58,203 during the three and six months ended June 30, 2021, ~~and approximately $25,092and $128,735for the three and six months ended June 30, 2020,~~ respectively, ~~and~~which are included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of potential common shares, if dilutive, resulting from the exercise of warrants, options or the conversion of convertible notes payable.

The following securities are excluded from the calculation of weighted average diluted common shares at June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, because their inclusion would have been anti-dilutive:

SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

	2021		2020		2022		2021
	June 30,				June 30,
	2021		2020		2022		2021
Warrants		6,615,302		2,537,264		17,873,906		6,615,302
Options		100,000		4,821		412,500		100,000
Convertible debt		32,350		32,350		27,076		32,350
Total potentially dilutive shares		6,747,652		2,574,435		18,313,482		6,747,652

The Company engages various vendors to distribute food products to their Company-owned restaurants. Purchases from the Company’s largest supplier totaled ~~60.25%~~19% and ~~68.69%~~30% of the Company’s purchases for the three and six months ended June 30, 2022, respectively. Purchases from the Company’s largest supplier totaled 60.25% and 68.69% of the Company’s purchases for the three and six months ended June 30, 2021, respectively. ~~Purchases from the Company’s largest supplier totaled~~ ~~82.95%~~ ~~and~~ ~~84.41%~~ ~~of the Company’s purchases for the three and six months ended June 30, 2020, respectively.~~

The Company measures the fair value of financial assets and liabilities based on the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures” (“ASC 820”).

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of accrued liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of our short–term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of common stock and warrants, are comparable to rates of returns for instruments of similar credit risk.

See Note ~~12 –~~16– Equity – Warrant and Options Valuation for details related to an accrued compensation liability being fair valued using Level 1 inputs.

~~Certain amounts in prior periods have been reclassified to conform~~The Company adopted Topic 842 as of January 1, 2022 and recognized a cumulative-effect adjustment to the ~~current~~opening balance of accumulated deficit of $22,799 as of the adoption date. Lease right-of-use assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make payments arising from the lease agreement. These assets and liabilities are recognized at the commencement of the lease based upon the present value of the future minimum lease payments over the lease term. The lease term reflects the no cancelable period ~~presentation. These reclassifications~~of the lease together with periods covered by an option to extend or terminate the lease when management is reasonably certain that it will exercise such option. Changes in the lease term assumption could impact the right-of-use assets and lease liabilities recognized on the balance sheet. As our leases typically do not contain a readily determinable implicit rate, we determine the present value of the lease liability using our incremental borrowing rate at the lease commencement date based on the lease term on a collateralized basis.

The Company accounts for income taxes under Accounting Standards Codification (“ASC”) 740 Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Tax benefits claimed or expected to be claimed on a tax return are recorded in the Company’s financial statements. A tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Uncertain tax positions have had no ~~effect~~impact on ~~previously reported net loss.~~the Company’s financial condition, results of operations or cash flows. The Company does not expect any significant changes in its unrecognized tax benefits within years of the reporting date.

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, general and administrative expenses in the condensed consolidated statements of operations.

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally recorded on the grant date and re-measured on financial reporting dates and vesting dates until the service period is complete. The fair value amount of the award is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires companies to recognize lease liabilities and corresponding right-of-use leased assets on the balance sheets and to disclose key information about leasing arrangements. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 is effective for annual periods beginning after December 15, 2022, with early adoption permitted.

Additionally, in 2018 and 2019, the FASB issued the following Topic 842–related ASUs:

● ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842, which clarifies the applicability of Topic 842 to land easements and provides an optional transition practical expedient for existing land easements;

● ASU 2018-10, Codification Improvements to Topic 842, Leases, which makes certain technical corrections to Topic 842;

● ASU 2018-11, Leases (Topic 842): Targeted Improvements, which allows companies to adopt Topic 842 without revising comparative period reporting or disclosures and provides an optional practical expedient to lessors to not separate lease and non-lease components of a contract if certain criteria are met; and

● ASU 2019-01, Leases (Topic 842): Codification Improvements, which provides guidance for certain lessors on determining the fair value of an underlying asset in a lease and on the cash flow statement presentation of lease payments received; ASU No. 2019-01 also clarifies disclosures required in interim periods after adoption of ASU No. 2016-02 in the year of adoption.

The Company adopted Topic 842 as of January 1, 2022 and recognized a cumulative-effect adjustment to the opening balance of accumulated deficit of $15,010 as of the adoption date, and recognized an additional $7,789 during the second quarter of 2022, based on updated information on two of our leases, for an aggregate cumulative-effect adjustment to accumulated deficit of $22,799. See Note 11 – Leases for further details.

In October 2021, the FASB issued ASU 2021-08 Business Combinations (“Topic 805”): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. Under the current business combinations guidance, such assets and liabilities were recognized by the acquirer at fair value on the acquisition date. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the extent of the impact of this ASU, but do not expect the adoption of this standard to have a significant impact on our condensed consolidated financial statements.

The Company evaluated events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation and transactions, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 16 – Subsequent Events.

On March 25, 2021, the Company entered into an asset purchase agreement with ~~Superfit~~SuperFit Foods, LLC, a Florida limited liability company and ~~Superfit~~SuperFit Foods, LLC, a Nevada limited liability company (the ~~“Superfit~~“SuperFit Acquisition”). The purchase price of the assets and rights was $1,150,000. The purchase price iswas payable as follows: $500,000that was paid at closing, of which $25,000was released from an escrow account held by our attorney, and $625,000paid in 268,240shares of common ~~stock to be held for six months before being registered.~~ stock. The remaining $25,000, ~~shall~~which was to be ~~paid~~issued in ~~shares of~~the Company’s common stock, ~~provided that the seller meets various obligation, within 60 days,~~was forfeited as ~~outline in the purchase agreement. As of June 30, 2021~~ the Company ~~has accrued for the liability in accounts payable~~ and ~~accrued expenses.~~former owner agreed that not all obligations were met.

The Company acquired the following assets as part of the purchase ~~agreement:~~agreement, adjusted for purchase accounting adjustments to reflect the fair value of the net assets acquired during 2021:


Furniture and equipment	$	82,000	$	82,000
Vehicles		55,000		55,000
Tradename		45,000		45,000
Customer list		140,000		140,000
Domain name		125,000		125,000
Proprietary Recipes		160,000		160,000
Non-compete agreement		260,000		260,000
Intangible assets, net				260,000
Goodwill		283,000		258,000
Total assets acquired	$	1,150,000	$	1,125,000

The adjustment to the estimate identifiable net assets acquired resulted in a corresponding $25,000 decrease in estimated goodwill due to the Company having no further obligation to issue the $25,000 shares of common stock as mentioned above.

The unaudited pro-forma financial information in the table below summarizes the condensed consolidated results of operations of the Company and ~~SuperFits~~SuperFit Foods, LLC as though the acquisition had occurred as of January 1, ~~2020.~~2021. The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results.

SCHEDULE OF ~~SUPPLEMENTAL PROFORMA ACQUIRED FRANCHISEE STORE~~BUSINESS ACQUISITION PRO FORMA INFORMATION

On May 14, 2021, the Company entered into Membership Interest Purchase Agreement with the members (the (“Poke Sellers”) of PKM Stamford, LLC, Poke Co., LLC, LB Holdings LLC, and TNB Holdings, LLC, each a Connecticut limited liability company (collectively, the “Poke Entities”) pursuant to which the Company acquired all of the issued and outstanding membership interest of the Poke Entities in consideration of $4,000,000in cash and $730,000payable in the form of a promissory note (the “Poke Note”).

In a related transaction, on May 14, 2021, the Company and the Poke Sellers entered into a Membership Interest Exchange Agreement pursuant to which the Company acquired Poke Co Holdings LLC, GLL Enterprises, LLC, and TNB Holdings II, LLC, each a Connecticut limited liability company (collectively, the Poke Entities II”) in exchange for shares of common stock of the Company valued at $1,250,000. The Company issued 880,282shares of common stock of the Company on May 14, 2021. The price per share was determined by using the 10-day trading average preceding the date of closing. The closing occurred on May 14, 2021.

Poke Entities and Poke Entities IIare hereinafter referred to as “Pokemoto”.

As of the date of the acquisition Pokemoto operated a total of 14 locations, six Company-owned restaurants and eight franchised restaurants, in four states, offering up chef-driven contemporary flavors with fresh delectable and healthy ingredients such as Atlantic salmon, sushi-grade tuna, fresh mango, roasted cashews and black caviar tobiko that appeals to foodies, health enthusiasts, and sushi-lovers everywhere.

The Company acquired the following assets as part of the purchase ~~agreement:~~agreement, adjusted for purchase accounting adjustments to reflect our estimate of the fair value of the net assets acquired during 2021:


Purchase Price	$	5,980,000	$	5,980,000

Assets
Cash	$	1,184,610	$	1,184,610
Accounts Receivables		60,208		-
Inventory		19,500		19,500
Property and Equipment		297,529		297,529
Intangible assets, net		4,560,000		4,560,000
Operating lease right-of-use assets, net		719,941		719,941
Security deposits and other assets		35,580		35,580
	$	6,877,368	$	6,817,160
Liabilities
Accounts payable and accrued expenses	$	282,457	$	296,224
Other notes payable		1,462,453		1,462,453
Deferred revenue		123,416		125,624
Operating lease liability		751,258		751,258
	$	2,619,584	$	2,635,559

Fair value of identifiable net assets acquired		4,257,784		4,181,601

Goodwill	$	1,722,216	$	1,798,399

	Fair Value		Weighted average amortization period		Fair Value		Weighted average amortization period

Tradename	$	175,000		5.00	$	175,000		5.00
Franchise License		2,775,000		10.00		2,775,000		10.00
Proprietary Recipes		1,130,000		7.00		1,130,000		7.00
Non-Compete		480,000		2.00		480,000		2.00
	$	4,560,000		8.22	$	4,560,000		8.22

The unaudited pro-forma financial information in the table below summarizes the condensed consolidated results of operations of the Company and Pokemoto, LLC as though the acquisition had occurred as of January 1, ~~2020.~~2021. The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results.

The unaudited pro-forma financial information in the table below summarizes the consolidated results of operations of the Company for both acquisitions, SuperFit Foods, LCC and Pokemoto, LLC as though the acquisition had occurred as of January 1, 2020. The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results.

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s loans receivable ~~consists of the following:~~balance was $0, respectively.

Loans receivable includes loans to franchisees and a former franchisee totaling, in the aggregate, $~~6,556~~ 0and $~~3,390~~0, net of reserves for uncollectible loans of $~~61,275~~ 4,032and $~~106,900~~ 71,184at June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~The remaining loan has an original term~~

At June 30, 2022 and December 31, 2021, the Company’s prepaid expenses and other current assets consisted of the following:

10 SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS~~years, earn interest~~

Prepaid and other current assets, at ~~rate~~June 30, 2022 and December 31, 2021 included a receivable of $12236,805~~% annually,~~ and ~~is being paid on a monthly basis.~~$1,704,751, respectively, related to the employee retention tax credits receivable from the Internal Revenue Services (“IRS”) that was made available to companies effected by Covid-19.

As of June 30, ~~2021~~2022 and December 31, ~~2020~~2021, property and equipment ~~consists~~consist of the following:

							June 30,			December 31,
	June 30, 2021			December 31, 2020			2022			2021

Furniture and equipment	$	1,309,003		$	1,143,320		$	1,321,638		$	1,397,098
Vehicles		55,000			-			55,000			55,000
Leasehold improvements		2,153,697			1,940,907			1,918,104			1,981,019
Property and equipment, gross		3,517,700			3,084,227			3,294,742			3,433,117
Less: accumulated depreciation and amortization		(967,983	)		(741,504	)		(1,270,955	)		(1,152,850	)
Property and equipment, net	$	2,549,717		$	2,342,723		$	2,023,787		$	2,280,267

Depreciation expense amounted to $~~135,243~~133,259 and $~~288,765~~256,506 ~~for the three and three and six months ended June 30, 2021 and 2020, respectively. Depreciation expense amounted to $81,337~~ ~~and $176,686~~ for the three and six months ended June 30, ~~2020,~~2022, respectively. Depreciation expense amounted to $135,243 and $288,765 for the three and six months ended June 30, 2021, respectively. During the three and six months ended June 30, 2022, the Company wrote off property and equipment with an original cost value of $36,699 and $421,374, respectively, related to closed locations and future locations that were terminated due to the economic environment as a result of COVID-19 and recorded a loss on disposal of $26,936 and $266,573, respectively, after accumulated depreciation of $9,764 and $138,402, respectively, in the condensed consolidated statement of operations.

During the three and six months ended June 30, 2021, the Company wrote off property and equipment with an original cost value of $0and $99,313r~~elated~~ related to a closed location and a future location that was terminated due to the economic environment as a result of COVID-19 and recorded a loss on disposal of $0and $37,027after accumulated depreciation of $0and $62,286in the unaudited condensed consolidated statement of operations.

~~The Company’s intangible assets include a trademark with an indefinite useful life as well as a trademark – SuperFit Foods and trademark – Pokemote which are being amortized over useful lives of~~ ~~five years~~Intangible Assets.

Amortization expense related to intangible assets ~~amounted to~~was $~~149,403~~ 356,395and $~~165,009~~ 708,875for the three and six months ended June 30, 2022, respectively. Amortization expense related to intangible assets was $149,403 and $165,009 for the three and six months ended June 30, 2021, respectively. ~~Amortization~~

The Company determined that impairment testing of the Company’s intangible assets ~~amounted to $15,908~~ ~~and $31,816~~ ~~for the three and three and six months ended~~was not deemed necessary as of June 30, ~~2020, respectively.~~2022. Therefore, no impairment charge is required.

The Company determined that impairment testing of the Company’s goodwill was not deemed necessary as of June 30, 2022. Therefore, no impairment charge is required.

					June 30,		December 31,
	June 30, 2021		December 31, 2020		2022		2021
Accounts payable	$	870,489	$	692,966	$	1,003,900	$	734,688
Accrued payroll		218,482		78,667		157,122		758,732
Accrued professional fees		280,519		224,028		86,361		185,872
Accrued board members fees		41,706		36,697		28,496		57,573
Accrued rent expense		176,061		171,266		218,112		176,727
Sales taxes payable ⁽²⁾		252,558		231,177
Accrued compensation expense						-		36,600
Sales taxes payable (1)						56,184		125,550
Accrued interest		24,188		25,222		-		28,426
Other accrued expenses		142,879		40,912		47,000		104,355
Total Accounts Payable and Accrued Expenses	$	2,006,882	$	1,500,935	$	1,597,175	$	2,208,523

On April 6, 2018, the Company issued a $475,000 convertible promissory note (the “2018 ARH Note”) to the Former Parent for services rendered and expense paid on behalf of the Company. The 2018 ARH Note has no stated interest rate or maturity date and is convertible into shares of the Company’s common stock at a conversion price of $3.50 per share at a time to be determined by the lender.

On April 11, 2018, the Former Parent elected to partially convert the 2018 ARH Note for the principal of $392,542 into 112,154 shares of the Company’s common stock.

The Company had an aggregate gross amount of $82,458, as of June 30, 2022 and December 31, 2021, respectively, in convertible notes payable to Former Parent outstanding.

As of June 30, 2022 and December 31, 2021, the Company has convertible note payable in the amount of $50,000 and $100,000 which is included within convertible notes payable. See Note 14 – Commitments and Contingencies – Litigation, Claims and Assessments for details related to the convertible note payable.

On October 10, 2019, the Company issued a note payable in connection with the acquisition of the franchisee location in the amount of $300,000. The note has a stated interest rate of 8% with monthly payments payable over 5 years.

On May 9, 2020, the Company entered into a Paycheck Protection Program Promissory Note and Agreement with Greater Nevada Credit Union, pursuant to which the Company received loan proceeds of $866,300 (the “PPP Loan”). The PPP Loan was made under, and is subject to the terms and conditions of, the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration.

On June 21, 2021, the U.S. Small Business Administration (the “SBA”) forgave the Company’s first Paycheck Promissory Note (“PPP loan”) entered into on May 9, 2020. The aggregate amount forgiven is $875,974, consisting of $866,300 in principal and $9,674 in interest expenses. The forgiven amount was accounted for as a gain on debt extinguishment of $875,974 and was recorded in our condensed consolidated statement of operations.

During the year ended December 31, 2021, as part of the Pokemoto acquisition, the Company acquired $1,171,400 loans issued by the Small Business Administration under its Economic Injury Disaster Loans (“EIDL”). The Company repaid all the loans in full during the year ended December 31, 2021.

During the year ended December 31, 2021, as part of the Pokemoto acquisition the Company acquired $291,053 in paycheck protection loans second draw (the “PPP 2 Loan”). The SBA forgave $0 and $139,877 in principal and $0 and $1,402 in interest expense during the three and six months ended June 30, 2022, respectively.

During the six months ended June 30, 2022 and 2021, the Company repaid a total amount of $63,456 and $1,221,071, respectively, of the other notes payable.

As of June 30, 2022, the Company had an aggregate amount of $965,344 in other notes payable. The notes had interest rates ranging between 1% - 8% per annum, due on various dates through May 2026.

The Company adopted Topic 842 as of January 1, 2022. The Company’s leases consist of restaurant locations. We determine if a contract contains a lease at inception. The lease generally has remaining terms of 1-10 years and most lease included the option to extend the lease for an additional 5-year period.

The total lease cost associated with right of use assets and operating lease liabilities for the three and six months ended June 30, 2022, was $242,263 and $483,851 and has been recorded in the condensed consolidated statement of operations as rent expense within restaurant operating expenses.

As of June 30, 2022, assets and liabilities related to the Company’s leases were as follows:

At June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, deferred revenue consists of the following:

~~At June 30, 2021 and December 31, 2020, other~~Other current liabilities consist of the following:

~~As of June 30, 2021, the Company had an amount of $82,458~~ ~~in convertible notes payable to Former Parent outstanding.~~

~~As of June 30, 2021, and December 31, 2020, the Company has another convertible note payable in the amount of $100,000~~ ~~which is included within convertible notes payable.~~ See Note 112 – ~~Commitments and Contingencies~~Significant Accounting Policies – ~~Litigation, Claims and Assessments~~Revenue Recognition for details related to the $~~100,000~~ ~~other convertible note payable.~~gift card liability and advertising fund liability.

~~On June 21, 2021 the U.S. Small Business Administration (the “SBA”) forgave the Company’s first Paycheck Promissory Note (“PPP loan”) entered into on May 9, 2020.~~ ~~The aggregate amount forgiven is $875,974, consisting of $866,300 in principal and $9,674 in interest expenses.~~ ~~The forgiven amount was accounted for as a gain on debt extinguishment of $875,974~~ ~~and was recorded in our condensed consolidated statement of operations.~~

~~As of June 30, 2021, the Company had an amount of $291,053~~ ~~in paycheck protection loans second draw (the “PPP 2 Loan”) that was acquired in the Pokemoto acquisition.~~

~~The PPP 2 Loan is administered by the SBA. The interest rate of the loan is~~ ~~1.00~~% per annum and accrues on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days. Commencing ten months after the effective date of the PPP 2 Loan, the Company is required to pay the Lender equal monthly payments of principal and interest as required to fully amortize any unforgiven principal balance of the loan by the five-year anniversary of the effective date of the PPP 2 Loan (the “Maturity Date”). The PPP 2 Loan contains customary events of default relating to, among other things, payment defaults, making materially false or misleading representations to the SBA or the Lender, or breaching the terms of the PPP 2 Loan. The occurrence of an event of default may result in the repayment of all amounts outstanding under the PPP 2 Loan, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. Under the terms of the CARES Act, PPP 2 loan recipients can apply for and be granted forgiveness for all, or a portion of the loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities.

~~During the six months ended June 30, 2021, as part of the Pokemoto acquisition the Company acquired $1,171,400~~ ~~loans issued by the Small Business Administration under its Economic Injury Disaster Loans (“EIDL”). The Company repaid all the loans in full during the six months ended June 30, 2021.~~

~~During the six months ended June 30, 2021 and 2020, the Company repaid a total amount of $1,221,071~~ ~~and $475,243, respectively, of the other notes payable.~~

~~As of June 30, 2021, the Company had an aggregate amount of $1,381,774~~ ~~in other notes payable. The notes had interest rates ranging between~~ 1~~% -~~ 8~~% per annum, due on various dates through~~ ~~October 31, 2025~~.

~~On February 7, 2021,~~During the three and six months ended June 30, 2022, the Company entered into a ~~Consulting Agreement with consultants as a strategy business consultant to provide the Company with business and marketing advice as needed. The term of the~~various franchise agreement is for ~~five months from the effective date on February 7, 2021. Pursuant to the terms of the agreement the Company agreed to pay the consultant~~ a total of ~~100,000~~ ~~shares of the Company’s common stock.~~four and seventeen potentially new Pokemoto locations with various franchisees. The ~~Company issued~~ ~~60,000~~ ~~shares of common stock upon the effective date of the agreement with the remaining~~ ~~40,000~~ ~~to be issued upon the successful completion of the agreement.~~

~~On March 8, 2021,~~franchisees paid the Company ~~entered into a Consulting Agreement with consultants as a strategy business consultant to provide~~an aggregate of $52,500 and $292,500 for the ~~Company with financial~~three and ~~business advice. The term of the agreement is for five months from the effective date on March 8, 2021. Pursuant to the terms of the agreement the Company agreed to pay the consultant a total of~~ ~~100,000~~ ~~shares of the Company’s common stock. The Company issued~~ ~~70,000~~ ~~shares of common stock upon the effective date of the agreement with the remaining~~ ~~30,000~~ ~~to be issued upon the successful completion of the agreement.~~

~~On March 22, 2021, the Company entered into a Consulting Agreement with consultants with experience in the area of investor relations and capital introductions. The term of the agreement is for~~ six months ~~from the effective date on March 22, 2021. Pursuant to the terms~~ended June 30, 2022, respectively, and this has been recorded in deferred revenue as of ~~the agreement the Company agreed to pay $250,000~~ ~~in cash for ancillary marketing, to be paid out at the Company’s discretion. In addition, the Company issued~~ ~~150,000~~ ~~shares of the Company’s common stock as a commencement incentive which is fully earned by entering into the agreement.~~June 30, 2022.

On ~~March 27, 2018,~~April 24, 2022, the Company and a convertible note holder ~~filed~~entered into an agreement in which the Company will repay a ~~complaint~~total of $110,000 in connection with the default judgement issued on June 22, 2018, by the Iowa District Court for Polk County #CVCV056029, filed against the Company for failure to pay the remaining balance due on a promissory note in the amount of $100,000, together with interest, attorney fees and other costs of $171,035~~. On June 6, 2018 a default judgement was entered against the~~.The Company ~~for the amount~~agreed to pay $40,000 on or before May 1, 2020 and to make seven installment payments of $~~171,035~~10,000~~. The Company repaid an aggregate amount of $71,035, consisting of principal and interest, as of the date of the filing of this report.~~ per month starting on or before June 1, 2022. As of June 30, ~~2021,~~2022, the Company has accrued for the liability in convertible notes payable in the amount of $~~100,000~~ 50,000~~and accrued interest of $25,116~~ which is included ~~in accounts payable and accrued expenses.~~

In May 2018, Resolute Contractors, Inc., Quality Tile, MTL Construction, Genesis Electric, JNB Interiors and Captive Aire filed a Mechanics Lien for labor, service, equipment and materials in the total amount of $~~98,005. The Company intends to set up various payment plans with these vendors. As of June 30, 2021, the Company has accrued for the liability~~ in accounts payable and accrued expenses.

On or about March 7, 2019, the Company was listed as a defendant to a lawsuit filed by a contractor in the State of ~~Texas.~~Texas in El Paso County #2019DCV0824. The contractor is claiming a breach of contract and is seeking approximately $32,809in damages for services claimed to be rendered by the contractor. ~~The Company is working with legal counsel in order to reach a settlement.~~ As of ~~June 30,~~December 31, 2021, the Company accrued $30,000~~for theliability in accounts payable and accrued expenses.~~

~~On January 23, 2020, the Company was served a judgment in the amount of $130,185~~ ~~for a breach of a lease agreement in Chicago, Illinois, in connection with a Company owned store that was closed in 2018. As of June 30, 2021, the Company has accrued~~ for the liability in accounts payable and accrued expenses.

In March 2021, the Company participated in a mediation concerning an investor who invested with American Restaurant Holdings, Inc and/or American Restaurants, LLC, our former parent company, from 2013 through 2015 in the total amount of $~~531,250. As of the filing of this report, the company entered into a settlement with American Restaurant, LLC and the investor in the amount of $160,000. The Company paid $100,000~~ as part of the settlement, including legal fees, while the remining balance was paid by the insurance carrier and American Restaurants, LLC. See Note 12 Equity – Common stock for the cancellation of the investor shares pursuant to the agreement.

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management after consulting legal counsel, such matters are currently not expected to have a material impact on the Company’s financial statements.

~~The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements after consulting legal counsel.~~

On ~~April 7, 2021,~~January 23, 2020, the Company ~~entered into~~was served a ~~Securities Purchase Agreement with an accredited investor (the “Securities Purchase Agreement”)~~judgment issued by the Judicial Council of California in the amount of $130,185 for a ~~private placement (the “Private Placement”) pursuant to which the investor agreed to purchase from~~breach of a lease agreement in Chicago, Illinois, in connection with a Company-owned store that was closed in 2018. As of June 30, 2022, the Company has accrued for ~~an aggregate purchase price~~the liability in accounts payable and accrued expenses.

In the normal course of ~~approximately $10,000,000~~ ~~(i)~~ ~~1,250,000~~ ~~shares of common stock of~~business, the Company ~~(ii) a common stock purchase warrant to purchase up to~~ ~~4,115,227~~ ~~shares of Common Stock (the “Common Warrant”) and (iii) a pre-funded common stock purchase warrant to purchase up to~~ ~~2,865,227~~ ~~shares of Common Stock (the “Pre-Funded Warrant”). Each share is being sold together at a combined offering price of $2.43~~ ~~per share and Common Warrant, and each Pre-Funded Warrant and accompanying Common Warrant is being sold together at a combined offering price of $2.42~~ ~~per Pre-Funded Warrant and accompanying Common Warrant. The Pre-Funded Warrant is immediately exercisable, at a nominal exercise price of $0.01~~ ~~per share, and~~ may be ~~exercised at any time until~~involved in legal proceedings, claims and assessments arising in the ~~Pre-Funded Warrant is fully exercised. The Common Warrant will~~ordinary course of business. In the opinion of management after consulting legal counsel, such matters are currently not expected to have ~~an exercise price of $2.43~~ ~~per share, are immediately exercisable and will expire five and one-half (5.5) years from~~a material impact on the ~~date of issuance. The Private Placement closed on April 9, 2021.~~Company’s financial statements.

The ~~Securities Purchase Agreement contains customary representations, warranties~~Company records legal costs associated with loss contingencies as incurred and ~~agreements~~accrues for all probable and estimable settlements after consulting legal counsel.

On January 2, 2022, the Company appointed Jennifer Black as Chief Financial Officer of the Company and ~~the Purchaser and customary indemnification rights and obligations of the parties thereto.~~entered into an Offer Letter with Ms. Black. Pursuant to the ~~Securities Purchase Agreement,~~Offer Letter, Ms. Black will be employed as Chief Financial Officer of the Company on an at-will basis. Ms. Black is ~~required~~entitled to ~~register~~a base salary at the ~~resale~~annualized rate of $190,000. The Company’s previous CFO, Ferdinand Groenewald, will remain and was appointed as the Chief Accounting Officer of the ~~Shares~~Company. The Company issued Ms. Black 20,000 shares of common stock upon completion of 90 days of employment. Ms. Black is entitled to receive stock options to acquire 20,000 shares of common stock subject to the approval of the Board of Directors and Compensation Committee and the ~~shares issuable upon exercise~~terms and conditions will be subject to entering into a stock option agreement. See Note 16 – Equity – Common Stock and Options for details related to the issuance of the ~~Common Warrant~~shares of common stock and stock options.

On February 10, 2022, the ~~Pre-Funded Warrant. The~~ Company ~~is required~~entered into an Employment Agreement with Michael Roper effective February 14, 2022, which replaced his prior employment agreement. Pursuant to ~~prepare and file a registration statement with~~ the ~~Securities and Exchange Commission within 30 days~~Employment Agreement, Mr. Roper will continue to be employed as Chief Executive Officer of the ~~date~~Company on an at will basis. During the term of the ~~Securities Purchase~~Employment Agreement, ~~and~~Mr. Roper is entitled to ~~use commercially reasonable efforts~~a base salary at the annualized rate of $350,000, will be increased to ~~have~~$375,000 upon the ~~registration statement declared effective within~~one-year anniversary. Mr. Roper will be eligible for a discretionary performance bonus to be paid in cash or equity. Within 90 days of the ~~closing~~effective date, the Company issued Mr. Roper stock options to receive 100,000 shares of common stock which vest over a term of five years. If Mr. Roper is terminated by the Company for any reason other than cause, including termination without cause in connection with a change in control, Mr. Roper will be entitled to a severance package of 18 months of salary and health and dental benefits paid in accordance with the Company’s payroll schedule, but subject to the execution of a valid release in favor of the ~~Private Placement.~~Company and its related parties. See Note 16 – Equity – Options for details related to the issuance of the stock options.

~~Pursuant~~On February 10, 2022, the Company and Kevin Mohan, Chief Investment Officer, entered a letter agreement providing that Mr. Mohan will continue to be engaged by the Company on an at-will basis with a base salary at the annualized rate of $200,000 effective February 14, 2022. Mr. Mohan will be eligible for a discretionary performance bonus to be paid in cash or equity of up to 75% of his salary. Within 90 days of the effective date, the Company issued Mr. Mohan stock options to receive 75,000 shares of common stock which vest over a term of five years. If Mr. Mohan is terminated by the Company for any reason other than cause, including termination without cause in connection with a change in control, he will be entitled to a ~~placement agency~~severance package of six months of salary and health and dental benefits paid in accordance with the Company’s payroll schedule and insurance program, but subject to the execution of a valid release in favor of the Company and its related parties. See Note 16 – Equity – Options for details related to the issuance of the stock options.

On February 9, 2022, the Company and Kenn Miller, Chief Operations Officer, entered a letter agreement ~~dated April 6, 2021,~~providing that Mr. Miller will continue to be engaged by the Company on an at-will basis with a base salary at the annualized rate of $275,000 effective February 14, 2022. Mr. Miller will be eligible for a discretionary performance bonus to be paid in cash or equity of up to 75% of his salary. Within 90 days of the effective date, the Company issued Mr. Miller stock options to receive 50,000 shares of common stock which vest over a term of five years. If Mr. Miller is terminated by the Company for any reason other than cause, including termination without cause in connection with a change in control, he will be entitled to a severance package of 12 months of salary and health and dental benefits paid in accordance with the Company’s payroll schedule and insurance program, but subject to the execution of a valid release in favor of the Company and its related parties. See Note 16 – Equity – Options for details related to the issuance of the stock options.

On February 9, 2022, the Company and Aimee Infante, Chief Marketing Officer, entered a letter agreement providing that Ms. Infante will continue to be engaged by the Company on an at-will basis with a base salary at the annualized rate of $175,000 effective February 14, 2022. Ms. Infante will be eligible for a discretionary performance bonus to be paid in cash or equity of up to 25% of her salary. Within 90 days of the effective date, the Company issued Ms. Infante stock options to receive 42,500 shares of common stock which vest over a term of five years. If Ms. Infante is terminated by the Company for any reason other than cause, including termination without cause in connection with a change in control, she will be entitled to a severance package of six months of salary and health and dental benefits paid in accordance with the Company’s payroll schedule and insurance program, but subject to the execution of a valid release in favor of the Company and its related parties. See Note 16 – Equity – Options for details related to the issuance of the stock options.

On February 9, 2022, the Company and Ferdinand Groenewald, Chief Accounting Officer, entered a letter agreement providing that Mr. Groenewald will continue to be engaged by the Company on an at-will basis with a base salary at the annualized rate of $175,000 effective February 14, 2022. Mr. Groenewald will be eligible for a discretionary performance bonus to be paid in cash or equity of up to 25% of his salary. Within 90 days of the effective date, the Company issued Mr. Groenewald stock options to receive 25,000 shares of common stock which vest over a term of five years. If Mr. Groenewald is terminated by the Company for any reason other than cause, including termination without cause in connection with a change in control, he will be entitled to a severance package of six months of salary and health and dental benefits paid in accordance with the Company’s payroll schedule and insurance program, but subject to the execution of a valid release in favor of the Company and its related parties. See Note 16 – Equity – Options for details related to the issuance of the stock options.

On June 21, 2022, the Company advised Ferdinand Groenewald that the position of Chief Accounting Officer has been eliminated. Mr. Groenewald has agreed to continue his employment with the Company through July 29, 2022, at which time he became entitled to the severance for termination without cause as outlined in the letter agreement between the Company and ~~A.G.P./Alliance Global Partners (the “Placement Agent”~~Mr. Groenewald dated February 9, 2022.

On February 1, 2022, the Company received notice from The Nasdaq Stock Market (“Nasdaq”) ~~entered into~~that the closing bid price for the Company’s common stock had been below $1.00 per share for the previous 30 consecutive business days, and that the Company is therefore not in ~~connection~~compliance with the ~~Private Offering,~~minimum bid price requirement for continued inclusion on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Rule”).

Nasdaq’s notice has no immediate effect on the ~~Placement Agent acted as~~listing or trading of the ~~sole placement agent for the Private Placement and~~Company’s common stock on The Nasdaq Capital Market.

The notice indicates that the Company ~~has paid customary placement fees~~will have 180 calendar days, until August 1, 2022, to regain compliance with this requirement. The Company can regain compliance with the $1.00 minimum bid listing requirement if the closing bid price of its common stock is at least $1.00 per share for a minimum of ten (10) consecutive business days during the 180-day compliance period. If the Company does not regain compliance during the initial compliance period, it may be eligible for additional time of 180 calendar days to regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of our publicly held shares and all other Nasdaq initial listing standards, except the bid price requirement, and will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period. If the Company is not eligible or it appears to Nasdaq that the Company will not be able to cure the deficiency during the second compliance period, Nasdaq will provide written notice to the ~~Placement Agent, including a cash fee equal to 8% of~~Company that the ~~gross proceeds raised in the Private Placement and a~~ ~~164,609~~ Company’s common stock ~~purchase warrant~~will be subject to ~~purchase shares~~delisting. In the event of ~~Common Stock in an amount equal to 4% of the Shares and shares of Common Stock issuable upon exercise of the Warrants sold in the Private Placement, the warrant has an exercise price of $2.916~~ ~~per share and is exercisable commencing six months from the date of the pricing of the Private Placement for a period of five years after~~ such ~~date. Pursuant to the Placement Agency Agreement,~~notification, the Company ~~has also agreed~~may appeal Nasdaq’s determination to ~~reimburse certain expenses of~~delist its securities, but there can be no assurance that Nasdaq would grant the ~~placement agent incurred in connection with the Private Placement.~~Company’s request for continued listing.

The Company intends to actively monitor the minimum bid price of its common stock and may, as appropriate, consider available options to regain compliance with the Rule. There can be no assurance that the Company will be able to regain compliance with the Rule or will otherwise be in compliance with other Nasdaq listing criteria.

The Company failed in certain instances in paying past state and local sales taxes collected from customers in specific states that impose a tax on sales of the Company’s products during 2017 and 2018. As of the second quarter June 30, 2022, all past due tax on sales from 2017 and 2018 ~~and 2019.~~has been paid in full. The Company had accrued a sales tax liability for approximately $~~252,558~~ 56,184and $~~231,177~~ 125,550~~which includes penalties and interest~~ as of June 30, ~~2021~~2022, and December 31, ~~2020, respectively, related~~2021, respectively. All current state and local sales taxes from January 1, 2018, for open Company-owned locations have been fully paid and in a timely manner. The Company has completed all the payment plans with the various state or local entities for these past owed amounts.

See Note 1 – Business Organization and Nature of Operations for descriptions of our operating segments.

On ~~February~~January 3, ~~2021, the Company issued an aggregate of~~ ~~20,000~~ ~~shares of common stock of the Company to a digital marketing consultant with an aggregate fair value of $42,600~~.

~~On February 3, 2021, the Company issued an aggregate of~~ ~~16,126~~ ~~shares of common stock of the Company to the members of the board of directors as compensation earned through the end of the fourth quarter of 2020.~~

~~On March 31, 2021,~~2022, the Company authorized the issuance of an aggregate of ~~12,711~~ 1,200,000 shares of common stock in connection with the cashless exercise of the Pre-Funded Warrants. Pursuant to the terms of the Pre-Funded Warrants a total of 1,200,215 warrants were exercised.

On January 6, 2022, the Company authorized the issuance of an aggregate of 39,573shares of common stock to the members of the board of directors as compensation earned during the ~~first~~fourth quarter of 2021. The Company accrued for the liability as of December 31, 2021.

On ~~April 30, 2021,~~January 18, 2022, the Company issued an aggregate of ~~10,000~~ 30,000shares of common stock of the Company to a ~~digital marketing~~ consultant ~~pursuant to their service agreement,~~that assisted with the acquisition of SuperFit Foods and Pokemoto, with an aggregate fair value amount of $~~14,700~~15,600.

~~On May 6, 2021, the Company issued an aggregate of~~ ~~150,000~~ ~~shares of common stock of the Company to a digital marketing consultant with an aggregate fair value of $214,500~~. The Company accrued for the liability as ~~accrued compensation expense on the books as~~ of ~~March~~December 31, ~~2021, as the share were fully earned pursuant to their service agreement. On the date of issues of the shares the Company recorded a gain on the change in fair value of the accrued compensation of $127,500~~ ~~in the condensed consolidated statement of operations.~~

~~On May 27, 2021, the Company cancelled~~ ~~11,879~~ ~~shares of common stock previously issued to an investor pursuant a settlement agreement in exchange for $100,000~~ ~~the portion paid by the Company in the Settlement. See Note 11 – Commitments and Contingencies – Litigation, Claims and Assessments for further details related to the settlement.~~

~~See Note 4 – Acquisitions – Pokemoto Acquisition and SupferFit Foods Acquisition for details related to the stock issuance in connection with the acquisitions.~~

~~See Note 11 – Commitments and Contingencies – Consulting Agreements for details related to additional stock issuances during the six months ended June 30,~~ 2021.

~~See Note 12 – Equity – warrants for details related to stock issuance in connection with the exercising of warrants.~~

On February 24, 2022, the Company authorized the issuance of an aggregate of 1,209,604 shares of common stock in connection with the cashless exercise of the Pre-Funded Warrants. Pursuant to the terms of the Pre-Funded Warrants a total of 1,210,110 warrants were exercised.

On March 31, 2022, the Company authorized the issuance of an aggregate of 53,961 shares of common stock to the members of the board of directors as compensation earned during the first quarter of 2022.

On April 4, 2022, the Company authorized the issuance of 20,000 shares of common stock to a member of the executive team per the employment agreement. The stock was not fully earned until April 4, 2022.

On June 8, 2022, the Company authorized the issuance of 5,000 shares of common stock to a contractor for work done at a Company owned location

On June 30, 2022, the Company recognized 30,910 shares of common stock for book purpose to reconcile the shares outstanding to the transfer agent report.

On May 2, 2022, the Company, pursuant to the employment agreements, issued options to purchase an aggregate of 312,500 shares of the Company’s common stock. The options had an exercise price of $0.41 per share and vest ratably over twenty quarters with the first vesting occurring on June 30, 2022.

A summary of options activity during the three months ended June 30, 2022 is presented below:

~~On February 11, 2021, the Company issued an aggregate of~~ ~~221,783~~ ~~shares of restricted common stock of the Company to various executives and an employee. The restricted common stock is fully vested upon the date of grant.~~

A summary of warrants activity during the ~~activity related to the restricted common stock for the six~~three months ended June 30, ~~2021~~2022 is presented below:

Stock-based compensation related to restricted stock issued to employees, directors and consultants, warrants and warrants ~~issued~~ to consultants amounted to $~~14,700~~ 44,996and $~~1,727,545~~ 117,582for the three and six months ended June 30, ~~2021,~~2022, respectively, of which $~~14,700~~ 44,996and $~~1,727,297~~117,334, respectively, was recorded in selling, general and administrative expenses and $0and $248, respectively, was recorded in labor expense within restaurant operating expenses. Stock-based compensation related to restricted stock issued to employees, directors and consultants and warrants issued to consultants amounted to $~~277,077~~ 14,700and $~~3,625,220~~1,727,545 for the three and six months ended June 30, ~~2020,~~2021, respectively, of which $~~276,525~~ 14,700and $~~3,624,116~~1,727,297, respectively, was recorded in general and administrative expenses and $~~552~~ 0and $~~1,104~~248, respectively, was recorded in labor expense within restaurant operating ~~expenses~~expenses.

~~A summary of option activity during the three and six months ended June 30, 2021 is presented below:~~

~~A summary of warrants activity during the three and six months ended June 30, 2021 is presented below:~~

~~See Note 11 – Commitments and Contingencies – Private Placement for details related to the warrants issued during the six months ended June 30, 2021.~~

~~On May 24, 2021, the Company issued~~ ~~1,465,227~~ ~~shares of common stock in connection with the exercising of the Pre-Funded Warrant for $14,652~~.

~~On May 28, 2021, the Company issued~~ ~~1,400,000~~ ~~shares of common stock in connection with the exercising of the Pre-Funded Warrant for $14,000~~.

Subsequent to June 30, 2021 and through the date of the issuance of the these consolidated financial statements, the Company closed 5 delivery-only kitchen locations. The decision was made not to renew the monthly license agreement after their initial one-year term at these locations as a cost saving measure due to the location not performing as anticipated. Four of the locations were located in the Chicago market and the last one was located in Philadelphia. The existing assets at these locations were transfer to a storage unit and will be installed in future new locations.

On July ~~2, 2021,~~14, 2022, the Company ~~was named~~authorized the issuance of an aggregate of 72,091 shares of common stock to the members of the board of directors as ~~a defended in a wage dispute by a former employee.~~ compensation earned during the second quarter of 2022.

On July ~~27, 2021,~~7, 2022, the Company entered into sublease agreement with a ~~settlement~~sublessor in Wichita, KS for a new Company owned location. The term of the sublease is from August 1, 2022, through Augusts 31, 2024 with monthly rent payments of $1,815 plus all other property expenses. In addition, the Company agreed to pay a security deposit of $3,850. The Company will have an option to enter into a lease agreement for an additional 5 years upon termination of the sublease.

On July 29, 2022, Ferdinand Groenewald employment was terminated with the ~~plaintiff for an amount~~company, which resulted in the forfeiture of $~~18,500~~23,750 unvested stock options. As outlined in the stock option agreement between the Company and Mr. Groenewald, he has 30 days to ~~be paid on~~exercise or ~~before August 30, 2021.~~forfeit his 1,250 shares of vested stock options.

On August 2, 2022, the Company received a second letter from the Staff advising that the Company had been granted an additional 180 calendar days, or to January 30, 2023, to regain compliance with the Minimum Bid Price Requirement, in accordance with Nasdaq Listing Rule 5810(c)(3)(A).

The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with the Minimum Bid Price Requirement within the allotted compliance period. If the Company does not regain compliance within the allotted compliance period, Nasdaq will provide notice that the Company’s Common Stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the Minimum Bid Price Requirement during the 180-day extension.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of the results of operations and financial condition of Muscle Maker, Inc. (“Muscle Maker”), together with its subsidiaries (collectively, the “Company”) as of June 30, ~~2021~~2022 and December 31, ~~2020~~2021 and for the three ~~and six~~ months ended June 30, ~~2021~~2022 and ~~2020~~2021 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to Muscle Maker. “Muscle Maker Grill”, “SuperFit Foods” and “Pokemoto” refers to the ~~name~~names under which our corporate and franchised restaurants do ~~business.~~business depending on the concept. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” ~~“forecast,~~“forecast,” “model,” “proposal,” “should,” “may,” ~~“intend,~~“intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. For a detailed discussion of risk factors affecting us, see “Part I – Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021.

~~We operate~~The Company operates under the ~~name SuperFit Foods, Pokemoto and~~names Muscle Maker Grill, asPokemoto and SuperFit Foods and is a franchisor and ~~owner-operator~~owner operator of Muscle Maker Grill ~~restaurants~~ and ~~Healthy Joe’s~~Pokemoto restaurants. As of June 30, ~~2021,~~2022, the Company’s restaurant system included ~~twenty-five company-owned~~nineteen Company-owned restaurants, including the SuperFit Foods kitchen, and ~~fourteen~~eighteen franchise restaurants. ~~Seven~~In addition to these restaurants, the Company also operates from time to time with the following brand names under our ghost kitchen model: Meal Plan AF, Muscle Maker Burger Bar, Bowls Deep, Burger Joe’s, Wrap It Up, Salad Vibes, Mr. T’s House of Boba and Gourmet Sandwich. Our direct mail to consumer meal prep/plan program operates under the musclemakerprep.com and superfitfoods.com websites.

MMI is our parent company. We own and operate three unique “healthier for you” restaurant concepts within our portfolio of companies: Muscle Maker Grill restaurants, SuperFit Foods meal prep and Pokemoto Hawaiian Poke restaurants. Our Company was founded on the belief of taking every-day menu options and converting them into “healthier for you” menu choices. Consumers are demanding healthier choices, customization, flavor and convenience. We believe our portfolio of companies directly satisfy these consumer needs. We focus on lean proteins, fresh fruits and vegetables, proprietary sauces, whole grains and various other items like protein shakes, meal plans, specialty drinks and super foods. Each of our three concepts offers different menus that are tailored to specific consumer segments. We operate in the fast-casual and meal prep segments of the ~~company-owned~~restaurant industry. We believe our “healthier for you” inspired concepts deliver a highly differentiated customer experience.

Muscle Maker Grill Restaurants (“Muscle Maker Grill”): our Muscle Maker Grill restaurants are ~~delivery-only~~fast casual style restaurants specializing in “healthier for you” high quality, made to order, lean protein-based meals. These meals feature all-natural chicken breast, grass fed beef, lean turkey, shrimp and plant-based items. We pair these lean proteins with super foods such as avocado, quinoa, spinach, kale and broccoli, while also offering cauliflower rice, whole wheat pasta, sweet potato fries and proprietary specialty sauces like zero carb, fat free or gluten free options. Our products are made to order. The menu features bowls, wraps, salads and burgers. We also offer protein shakes and fruit smoothies along with meal plans and catering. Customers can dine in or take out or have their meals delivered to their door via Company delivery personnel or third-party services such as Uber Eats, DoorDash and GrubHub.

SuperFit Foods Meal Prep (“SuperFit Foods”): SuperFit Foods is a wholly owned meal prep division located in Jacksonville, Florida and focuses solely on meal plans. The terms meal prep and meal plans will be used interchangeably throughout this document. The business operates with a centralized kitchen that prepares all meals for distribution to consumers twice per week. This is a subscription-based business model where consumers order their meals via the SuperFitfoods.com website and are charged automatically every week. There are over 150 meal plan options to choose from as well as various healthy juices, snacks and desserts. Meal plans focus on specific dietary needs such as vegetarian, high protein, gluten free and low calorie.

SuperFit Foods’ distribution process is different than most meal prep companies. The business operates with a centralized kitchen that prepares all meals for distribution to consumers twice per week. While other meal plan companies ship meals directly to consumer’s homes, the SuperFit Foods model uses Company-owned coolers placed at designated pick-up locations throughout the Jacksonville, Florida market. Pick up locations are placed inside wellness centers such as gyms, yoga studios, and various lifestyle locations. SuperFit Foods delivers twice per week by independent contractors to these locations and consumers conveniently pick up their orders after their workouts or during their daily routines. This model allows us to keep food fresh and refrigerated (even in the summer months), reduces shipping costs to consumers and provides an easier distribution model for the Company. While we do offer direct shipment or drop-offs to homes, this represents a smaller percentage of overall Company revenue. As the lockdowns and restrictions from Covid are reducing, we believe our distribution model becomes even more attractive for consumers.

Pokemoto Hawaiian Poke restaurants (“Pokemoto”): Pokemoto restaurants are fast casual style restaurants that specialize in Hawaiian inspired poke bowls, wraps and salads. Poke is native Hawaiian cuisine made up of diced fresh fish served as an appetizer or main course with strong influences of Japanese and Korean cuisine. Think of it as deconstructed sushi that a consumer can customize into a bowl, salad or wrap every time. Hawaiian Poke is trending in the restaurant industry. It is a unique segment that is healthy, customizable, popular with millennials and Gen-Zs, offers unique flavor profiles and is “Instagrammable.”

Pokemoto offers consumers the possibility to customize their order every time. Consumers move down a linear production line (similar to Chipotle or Subway customer interaction and operations) customizing their bowl from a wide selection of ingredients. Pokemoto offers five types of protein including ~~SuperFit Foods.~~sushi grade tuna, salmon, chicken, shrimp or tofu. Consumers pick a base of white/brown rice or salad, select from over 25 mix-ins/toppings including avocado, kani salad, pickled daikon, hijiki seaweed, masago, caviar, mandarin oranges, edamame, mango, roasted cashews or wonton crisps to name a few and topped off with over eight proprietary sauces that are made in house. All this gets mixed together creating a flavor explosion that is customized for every consumer.

Pokemoto requires little to no cooking. Everything is either raw (tuna, salmon, veggies and fruits) or comes in pre-cooked (chicken and shrimp). The only cooking we do is soup and rice. It’s that simple. Because we have little cooking and consumers customize their orders, our labor requirements compared to most restaurants may be reduced. In addition, we believe training becomes much easier when you are not ~~included in~~cooking or requiring recipes to be followed while consumers customize their menu options. This creates a consistent product across all our Pokemoto restaurants as we expand into more markets. Finally, because we have little to no cooking, our build outs usually do not require expensive hoods, fire suppression systems, deep fryers, grills, ovens, etc. making the ~~store count,~~potential cost of building out a location very favorable.

Non-Traditional (Hybrid) Division is a combination of the ~~Company built four new~~aforementioned brands and provides its own unique experience for the consumer. Non-Traditional (Hybrid) locations ~~on university campuses but due to Covid-19 restrictions have not yet opened these~~are designed for unique locations ~~but incurred expenses during the twelve months ended December 31, 2020.~~such as universities, military bases and cloud kitchens.

We believe our healthy-inspired restaurant concept delivers a highly differentiated customer ~~experience. We combine~~experience by combining the quality and hospitality that customers commonly associate with our full service and fast casual restaurant competitors with the convenience and value customers generally expect from traditional ~~fast food restaurants, but in a healthy-inspired way.~~fast-food restaurants. The ~~following core values form the~~ foundation of our ~~brand:~~brand is based on our core values of quality, empowerment, respect, service and value.

In striving for these goals, we aspire to connect with our target market and create a great brand with a strong and loyal customer base.

We are the owner of the trade name and service mark Muscle Maker Grill®, ~~Healthy Joe’s,~~SuperFit Foods®, Pokemoto®, MMG Burger ~~Bar,~~Bar®, Meal Plan AFAF® and other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill® restaurants. We license the right to use the Muscle Maker Grill®, Pokemoto®, and ~~Healthy Joe’s~~SuperFit Foods ® trademarks and intellectual property to our wholly owned subsidiaries, Muscle Maker Development, Poke Co Holdings LLC and Muscle Maker Corp., and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill® and ~~Healthy Joe’s~~Pokemoto® restaurants.

On March 25, 2021, we acquired the assets of Superfit Foods, a subscription based fresh-prepared meal prep business located in Jacksonville, Florida. With this acquisition, we are also the owner of the trade name Superfit Foods that we use in connection with the operations of Superfit Foods. In 2020 Superfit foods produced overs 220,000 fresh-prepared meals. Superfit Foods is differentiated from other meal prep services by allowing customers in the Jacksonville Florida market to order online via the company’s website or mobile app and pick up their fully prepared meals from 28 company owned coolers located in gyms and wellness centers.

~~On May 14, 2021, MMI acquired~~ PKM Stamford, LLC, Poke Co., LLC, LB Holdings LLC, and TNB Holdings, LLC, Poke Co Holdings LLC, GLL Enterprises, LLC, and TNB Holdings II, LLC, each a Connecticut limited liability company (collectively, Pokemoto”), a healthier modern culinary twist on traditional Hawaiian poke classic. ~~Pokemoto has thirteen locations in four states – Connecticut, Rhode Island, Massachusetts, and Georgia and offers up~~ chef-driven contemporary flavors with fresh delectable and healthy ingredients such as Atlantic salmon, sushi-grade tuna, fresh mango, roasted cashews and black caviar tobiko that appeals to foodies, health enthusiasts, and sushi-lovers everywhere. The colorful dishes and modern chic dining rooms provide an uplifting dining experience for guests of all ages. Customers can dine in-store or order online via third party delivery apps for contactless delivery.

As of June 30, ~~2021, we~~2022, the Company had a cash balance, a working capital surplus and an accumulated deficit of ~~$68,027,592~~$13,465,538, $11,930,729, and ~~expect to continue to incur operating~~$75,052,859, respectively. During the three and six months ended June 30, 2022, the Company incurred a pre-tax net loss of $1,762,833 and $3,646,440, respectively and net ~~losses~~cash used in operations of $1,905,110 and $3,700,395 for the ~~foreseeable future. In its report~~six months ended June 30, 2022. The Company believes that our existing cash on hand and future cash flows from our ~~consolidated financial statements for~~franchise operations, will be sufficient to fund our operations, anticipated capital expenditures and repayment obligations over the fiscal year ended December 31, 2020, our independent registered public accounting firm included an explanatory paragraph relating to our ability to continue as a going concern. See “Liquidity and Capital Resources – Availability of Additional Funds and Going Concern” and Note 1 – Business Organization and Nature of Operations, Going Concern and Management’s Plans to Notes to Consolidated Financial Statements for additional information describing the circumstances that led to the inclusion of this explanatory paragraph.next twelve months.

Our revenues are derived from three primary sources: ~~company~~Company restaurant sales, franchise fee revenues and vendor rebates from Franchisees. Franchise revenues are comprised of franchise royalty revenues collected based on 5%2% to 6% of franchisee net sales and other franchise revenues which include initial, transfer and renewal franchisee fees. Vendor rebates are received based on volume purchases or services from franchise owned locations. In addition, we have other revenues which consists of gift card breakage which is recognized when we determine that there is no further legal obligation to remit the unredeemed gift card balance.

Food and beverage costs include the direct costs associated with food, beverage and packaging of our menu items at ~~company-operated~~Company-operated restaurants partially offset by vendor rebates from ~~company-owned~~Company-owned stores. The components of food, beverages and supplies are variable in nature, change with sales volume, are affected by menu mix and are subject to fluctuations in commodity costs.

Restaurant labor costs, including preopening labor, consists of ~~company-operated~~Company-operated restaurant-level management and hourly labor costs, including salaries, wages, payroll taxes, workers’ compensation expense, benefits and bonuses paid to our ~~company-operated~~Company-operated restaurant-level team members. Like other cost items, we expect total restaurant labor costs at our ~~company-operated~~Company-operated restaurants to increase due to inflation and as our ~~company~~Company restaurant revenues grow. Factors that influence labor costs include minimum wage and employer payroll tax legislation, mandated health care costs and operational productivity established by the management team.

Restaurant rent, including preopening rental charges, consist of ~~company-operated~~Company-operated restaurant-level rental or lease payments applicable to executed rental or lease agreements. In many cases these rental payments may include payments for common area maintenance as well as property tax assessments. Our rent strategy ~~mostly~~in some locations consists of a variable rent structure calculated on net sales of the restaurant. While this can have a negative effect on higher volume locations where we cannot leverage a fixed rent, it provides downside protection for lower volume locations. ~~While~~The Company does incur rent for some closed locations while we ~~cannot guarantee a favorable variable rent expense in all future leases, we have forecasted average rental costs as a percentage of total sales at 8%.~~

Other restaurant operating expenses, including preopening operating expenses, consist of ~~company-operated~~Company-operated restaurant-level ancillary expenses not inclusive of food and beverage, labor and rent expense. These expenses are generally marketing, advertising, merchant and bank fees, utilities, leasehold and equipment repairs, insurance and maintenance. A portion of these costs are associated with third party delivery services such as Uber Eats, Grub Hub, DoorDash and others. The fees associated with these third-party delivery services can range up to 25% of the total order being delivered. Management believes delivery is a critical component of our business model and industry trends will continue to push consumers towards delivery. ~~Our~~We have adjusted our cost structure ~~will need to be adjusted~~ to reflect a different pricing ~~model,~~models, portion sizes, menu offerings, and other considerations to potentially partially offset these rising costs of delivery.

Other expenses incurred for closed locations consists primarily of restaurant operating expenses incurred subsequent to store closures as the Company still has to certain obligations to vendors due to signed agreements.

Depreciation and amortization primarily consist of the depreciation of property and equipment and amortization of intangible assets.

In accordance with Topic 606, the Company recognizes sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee incurs the corresponding advertising expense. The Company records the related advertising expenses as incurred under general and administrative expenses.

~~General~~Selling, general and administrative expenses include expenses associated with corporate, marketing and administrative functions that support our operations, including wages, benefits, advertising, travel expense, stock-based compensation expense, legal and professional fees, training, investor relations and other corporate costs. We ~~expect to~~ incur incremental general and administrative expenses as a result of ~~becoming~~being a ~~public~~publicly listed company on the Nasdaq capital market. A certain portion of these expenses are related to the preparation of an initial stock offering and subsequent capital raises and should be considered one-time expenses.

Other ~~expenses primarily consist~~income (expenses) consists of amortization of debt discounts on the convertible notes, ~~payable and~~ interest expense related to ~~other~~convertible notes payable, change in fair value of accrued compensation and ~~convertible notes payable.~~gains on debt extinguishments in connection with the PPP loan forgiveness.

Income taxes represent federal, state, and local current and deferred income tax expense.

Three Months Ended June 30, ~~2021~~2022 Compared with Three Months Ended June 30, ~~2020~~2021

The following table represents selected items in our condensed consolidated statements of operations for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, respectively:

	For the Three Months Ended
	June 30,						For the Three Months Ended
	2021			2020			June 30,
							2022			2021
Revenues:
Company restaurant sales, net of discounts	$	2,564,864		$	659,939		$	2,750,734		$	2,564,864
Franchise royalties and fees		169,549			142,293			162,480			135,250
Franchise advertising fund contributions		4,742			32,454			16,170			4,742
Total Revenues		2,739,155			834,686			2,929,384			2,704,856

Operating Costs and Expenses:
Restaurant operating expenses:
Food and beverage costs		920,691			255,329			1,117,419			886,392
Labor		903,772			342,823			903,062			888,895
Rent		304,930			139,604			326,819			304,930
Other restaurant operating expenses		652,251			100,552			687,823			666,946
Total restaurant operating expenses		2,781,644			838,308			3,035,123			2,747,163
Preopening expenses		-			46,764
Depreciation and amortization		284,646			97,245			489,654			284,646
Franchise advertising fund expenses		4,742			32,454			16,170			4,742
General and administrative expenses		1,995,319			1,213,851
Preopening expenses								-			-
Selling, general and administrative expenses								1,126,857			1,994,003
Total Costs and Expenses		5,066,351			2,228,622			4,667,804			5,030,554
Loss from Operations		(2,327,196	)		(1,393,936	)		(1,738,420	)		(2,325,698	)

Other Income (Expense):
Other income (expense), net		223,681			(10,360	)
Other Income (Expenses) :
Other income (expense)								(14,468	)		223,681
Interest expense, net		(22,160	)		(1,129	)		(9,945	)		(22,596	)
Gain on extinguishment of debt		875,974			-
Loss on change in fair value of accrued compensation		127,500			(96,000	)
Total Other Income (Expense), Net		1,204,995			(107,489	)
Change in fair value of accrued compensation								-			127,500
Gain on debt extinguishment								-			875,974
Total Other Income (Expenses), Net								(24,413	)		1,204,559

Loss Before Income Tax		(1,122,201	)		(1,501,425	)		(1,762,833	)		(1,121,139	)
Income tax provision		-			-			(11,311	)		(1,062	)
Net Loss	$	(1,122,201	)	$	(1,501,425	)	$	(1,774,144	)	$	(1,122,201	)

Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021

~~Company total~~Our revenues totaled ~~$2,739,155~~$2,929,384 for the three months ended June 30, ~~2021~~2022 compared to ~~$834,686~~$2,704,856 for the three months ended June 30, ~~2020.~~2021. The ~~$1,904,469~~$224,528 increase is primarily attributed to an increase in restaurant sales and vendor rebates as a direct result of the acquisition of Pokemoto and the net opening/closing of corporate and franchise ~~royalties and fees.~~locations.

We generated Company restaurant sales, net of discounts, of ~~$2,564,864~~$2,750,734 for the three months ended June 30, ~~2021~~2022 compared to ~~$659,939 for~~$2,564,864 the three months ended June 30, ~~2020.~~2021. This represented an increase of ~~$1,904,925,~~$185,870, or 7.2%, which is ~~directly attributed to higher company owned stores in the current period as compared~~mainly attributable to the ~~prior period~~Pokemoto restaurants sales and ~~a result~~the net opening/closing of ~~a decrease in restriction since the start of Covid-19.~~corporate and franchise locations.

Franchise royalties and fees for the three months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$169,549~~$162,480 compared to ~~$142,293,~~$135,250 respectively. ~~The $27,256 increase is primarily attributable to~~This represents an increase ~~in royalty income~~ of ~~$51,560, $14,233 in vendor rebates as restaurant sales increase in~~$27,230, or 20.1%. As the Company executes against its franchising strategy and expands its efforts to sell franchise locations, ~~and corporate locations, partially offset by a decrease of $62,838 in franchisee fees as fewer locations was terminated in current period as compared to~~management is anticipating that this number will likely increase over the ~~prior period which results in an acceleration of initial franchisee fees.~~coming years.

Franchise advertising fund contributions for the three months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$4,742~~$16,170 compared to ~~$32,454,~~$4,742, respectively. In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense. Thus, the increase has been a direct result of us increasing our expenses incurred related to our national advertising services to benefit our franchisees and the brands as a whole.

Operating costs and expenses primarily consist of restaurant food and beverage costs, restaurant labor expense, restaurant rent expense, other restaurant operating expenses, depreciation and amortization expenses and selling, general and administrative expenses.

Restaurant food and beverage costs for the three months ended June 30, 2022 and 2021 totaled $1,117,419 or 40.6% as a percentage of Company restaurant net sales, and ~~2020 totaled $920,691,~~$886,392 or ~~35.90%~~34.7%, as a percentage of Company restaurant ~~sales, and $255,329, or 38.7%, as a percentage of restaurant~~net sales, respectively. The ~~$665,362~~$231,027 increase ~~was primarily due to~~resulted from higher store counts during the increase in restaurant sales resulting from six new cloud kitchens opened, the acquisition of the two-franchisee location, the acquisition of Superfit foods and the acquisition of six company owned store with the acquisition of Pokemotocurrent year as compared to the prior ~~period.~~year resulting in higher sales. The Company has experienced an increase in food and beverage costs due to inflationary pressures and supply chain disruptions causing the company to find alternative vendors in some instances for key ingredients. The Company anticipates higher ingredient costs in the near term and has taken price increases, menu modifications and recipe changes to attempt to offset these higher prices.

Restaurant labor for the three months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$903,772,~~$903,062, or ~~35.2%~~32.8%, as a percentage of Company restaurant net sales, and ~~$342,823,~~$888,895, or ~~51.9%~~34.7%, as a percentage of Company restaurant net sales, respectively. The ~~$560,949 decrease is~~$14,167 increase resulted due a ~~direct result of an increase in restaurant sales~~higher store count during the current year as compared to the prior ~~period due to new stores acquired and~~year as the Company opened and ~~fewer restrictions on restaurant operation during the current period~~acquired more stores as compared to the prior ~~period due~~period. We were able to ~~Covid-19. In addition, the decrease in restaurant~~reduce (improve) our overall labor costs as a percentage of ~~restaurant~~ sales ~~is also attributed~~by 1.8% due to ~~operational efficiencies~~increased sales and also due to improvements in ~~addition to the increase in restaurant sales.~~operations.

Restaurant rent expense for the three ~~and six~~ months ended June 30, 2022 and June 30, 2021 totaled $326,819 or 11.9% as a percentage of restaurant sales, and ~~2020 totaled~~ $304,930, or 11.9%, as a percentage of restaurant sales, ~~and $139,604, or 21.2%, as a percentage of restaurant sales,~~ respectively. The increase inof $21,889 is directly attributed to the new Company-owned locations acquired during the second quarter of 2021, which only included partial rent expense ~~is a direct result of us opening and acquiring a total of fourteen new company owned restaurants as~~ compared to the ~~prior period.~~current period which includes the full periods rent expense.

Other restaurant operating expenses for the three months ended June 30, 2022 and June 30, 2021 ~~and 2020~~ totaled ~~$652,251,~~$687,823, or ~~25.4%~~25.0% as a percentage of restaurant sales, and ~~$100,552,~~$666,946, or ~~15.2%~~26.0% as a percentage of restaurant sales, respectively. The $20,877 increase ~~of $551,699~~ is ~~directly attributed~~due to ~~the increase in our company owned store count as certain cost is fixed and~~higher third-party merchant fees resulting from an increase in ~~restaurant sales resulted in increased merchant fees.~~delivery orders and a higher store count during the year as compared to the prior year.

Depreciation and amortization expense for the three months ended June 30, 2022 and June 30, 2021 totaled $489,654 and ~~2020 totaled~~ $284,646, ~~and $97,245,~~ respectively. The ~~$187,401~~$205,960 increase is ~~primarily~~mainly attributed to amortization expense attributed to the additions of definite life intangible assets of approximately $4,150,000 acquired through the various acquisitions during the prior year as compared to the prior year. The remaining of the variance is attributable to depreciation expense related to additional property and equipment acquired through acquisitions and additional property and equipment purchased for new store build outs and ~~stores~~the remodeling of an existing and acquired ~~through acquisitions.~~Company-owned restaurant compared to the prior year.

~~General~~Selling, general and administrative expenses for the three months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$1,995,319,~~$1,126,857, or ~~72.8%~~38.5% of total ~~revenues,~~revenue, and ~~$1,213,851,~~$1,994,003, or ~~145.4%~~73.7% of total ~~revenues,~~revenue, respectively. The ~~$781,468 increase is primarily attributable to an increase salaries and bonus of $90,877 and an increase in professional fees and consulting expense in the aggregate amount of $704,813~~$867,146 decrease was mainly attributed to a ~~onetime~~decrease in professional fees of approximately $973,400 which resulted from changing our auditing firm and a one-time expense of ~~$665,00~~$665,000 incurred in connection with the private placement ~~during~~in the ~~current~~prior period partially offset by ~~a decrease~~an increase in salaries and wages of ~~$14,223 in~~approximately $122,932 due to the addition of additional staff with the Pokemoto and SuperFit foods acquisition The remainder of the variance was attributed to various ~~general and administrative expenses.~~other expenses including recruiting, marketing, computer expenses etc.

Our loss from operations for the three months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$2,327,196~~$1,738,420, or ~~85.0%~~59.3% of total revenues and ~~$1,393,936~~$2,325,698, or ~~167.0%~~85.9% of total ~~revenues,~~revenue, respectively. The ~~increase~~decrease of ~~$933,260~~$587,278 in loss from operations is primarily attributable to anthe increase of total revenues of $224,528 and a decrease in total ~~costs~~cost and expenses of ~~approximately $2,837,729 partially offset by an increase in our total revenues of approximately $ 1,904,469.~~$362,750 as discussed above.

Other income (expense)~~, net~~ for the three months ended June 30, 2022 and 2021 totaled ($24,413) and ~~2020 totaled~~ $1,204,995, ~~and ($107,489),~~ respectively. The ~~$1,312,484 increase~~$1,228,972 decrease in other (expense) income ~~(expense)~~ was primarily attributable to a reduction in the gain on extinguishment of debt of $875,974 due to the forgiveness of our PPP ~~loan, an increase in other income of $234,041 which is a result of a revitalization fund grant that was attributed to one of our store locations and an increase of $223,500 in~~loans, the ~~change~~decrease in fair value of accrued compensation ~~issued during~~of $127,500 and a decrease in other income of $238,149 which resulted from the ~~current~~revitalization fund grant in the prior period as compared to the ~~prior period due to administrative delays by the Company as the shares were earned by the consultant but not issued in the correct~~current period partially offset by an increase in other income (expenses) of $12,561 mainly attributed to a decrease in ~~of $21,031 in~~ interest expense, ~~net as we repaid the majority of our interest bearing instruments.~~increase in franchise sales and marketing expenses.

Our net loss before income tax for the three months ended June 30, 2022 was $1,762,833 which was an increase in our net loss of $641,694 as compared to a net loss of $1,121,139 for the three months ended June 30, 2021, ~~decreased~~resulting directly from an increase in our other income (expense) of $1,228,972 partially offset by ~~$379,224 to $1,122,201 as compared to $1,501,425~~an increase in our total revenue of $224,528, and a decrease of our total cost and expenses of $362,750. Our net loss for the three months ended June 30, ~~2020 resulting from~~2022 was $1,774,144 which was an ~~increase in our~~improvement of $651,943 as compared to a net loss ~~from operations and partially~~ of ~~set by our increase other income (expense), net as discussed above.~~$1,122,201 for the three months ended June 30, 2021.

Six Months Ended June 30, ~~2021~~2022 Compared with Six Months Ended June 30, ~~2020~~2021

~~The following table represents selected items in our condensed consolidated statements of operations~~Our revenues totaled $5,849,842 for the six months ended June 30, ~~2021 and 2020, respectively:~~

~~Company total revenues totaled $4,067,493~~2022 compared to $4,004,539 for the six months ended June 30, ~~2021 compared~~2021. The $1,845,303 increase is primarily attributed to ~~$2,269,740~~an increase in restaurant sales as a direct result of the acquisition of Pokemoto and SuperFit Foods, in addition to the net opening/closing of company owned and franchise locations.

We generated Company restaurant sales, net of discounts, of $5,444,926 for the six months ended June 30, ~~2020. The 79.21% increase is attributed~~2022 compared to ~~an increase in restaurant sales partially offset by a decrease in franchise royalties and fees and franchise advertising fund contributions.~~

~~We generated restaurant sales, net of discounts, of~~ $3,743,775 ~~for~~ the six months ended June 30, ~~2021 compared to $1,897,366, for the six months ended June 30, 2020.~~2021. This represented an increase of ~~$1,846,409,~~$1,701,151, or ~~97.3%~~45.4%, which is mainly attributable to ~~an increase of approximately $1,848,619 in~~the Pokemoto restaurants sales ~~due to additional stores that were open in~~and SuperFit Foods sales generated during the current ~~period compared to prior period, partially offset by a decrease~~year since their dates of ~~approximately $2,210 in restaurant sales from existing store~~acquisition, in addition to the ~~effect~~net opening/closing of ~~the permanent closure of two company owned store since the impact of Covid-19.~~corporate and franchise locations.

Franchise royalties and fees for the six months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$304,889~~$370,621 compared to ~~$318,324,~~$241,935 respectively. ~~The $13,435 decrease~~This represents an increase of $128,686, or 53.2%. As the Company executes against its franchising strategy and expands its efforts to sell franchise locations, management is ~~primarily attributable to a decrease in initial franchise fees of $67,492 as there were fewer franchisee agreement terminations in~~anticipating that this number will likely increase over the current period as compared to the prior period, partially offset by a increase in royalty income and vendor rebates in the aggregate amount of $54,057 as a result of increase sales due to new corporate owned locations and fewer restrictions due to Covid-19 as compared to the prior period.coming years.

Franchise advertising fund contributions for the six months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$18,829~~$34,295 compared to ~~$54,050,~~$18,829, respectively. In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense. Thus the increase has been a direct result of us increasing our expenses incurred related to our national advertising services to benefit our franchisees and the brands as a whole.

Restaurant food and beverage costs for the six months ended June 30, 2022 and 2021 totaled $2,143,354 or 39.4% as a percentage of Company restaurant net sales, and ~~2020 totaled $1,425,152,~~$1,362,198 or ~~38.1%~~36.4%, as a percentage of Company restaurant ~~sales, and $721,023, or 38.0%, as a percentage of restaurant~~net sales, respectively. The ~~$704,129~~$781,156 increase ~~primarily is due to a~~resulted from higher store ~~count~~counts during the ~~period~~current year as compared to the prior ~~period~~year resulting in higher sales. The Company has experienced an increase in food and beverage costs due to inflationary pressures and supply chain disruptions causing the company to find alternative vendors in some instances for key ingredients. The Company anticipates higher ingredient costs in the near term and has taken price increases, menu modifications and recipe changes to attempt to offset these higher prices.

Restaurant labor for the six months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$1,670,837,~~$1,976,109, or ~~44.6%~~36.3%, as a percentage of Company restaurant net sales, and ~~$929,443,~~$1,643,059, or ~~49.0%~~43.9%, as a percentage of Company restaurant net sales, respectively. The ~~$741,394~~$333,050 increase ~~results primarily~~resulted due to a higher store count during the current ~~period~~year as compared to the prior ~~period~~year as the Company opened and acquired more stores as compared to the prior period. ~~In addition, the decrease in~~We were able to reduce (improve) our overall labor costs as a percentage of sales ~~is a direct result of increase efficiencies~~by 7.6% due to increased sales and ~~an increase~~also due to improvements in ~~overall restaurant sales.~~operations.

Restaurant rent expense for the six months ended June 30, 2022 and June 30, 2021 ~~and 2020~~ totaled ~~$561,121,~~$667,215 or ~~15.0%,~~12.3% as a percentage of restaurant sales, and ~~284,281,~~$561,121, or 15.0%, as a percentage of restaurant sales, respectively. The increase of ~~$276,840~~$106,094 is directly attributed to the ~~increase company owned store count from eleven stores to twenty five stores due to acquisitions and due to~~new Company-owned locations acquired during the ~~opening of new stores~~current period as compared to the prior ~~period.~~period thus increasing the store count from sixteen stores to nineteen stores as of June 30, 2022. The percent of total sales reduced (improved) by 2.7% as sales increased overall and we are able to leverage fixed rent against these higher sales levels.

Other restaurant operating expenses for the six months ended June 30, 2022 and June 30, 2021 ~~and 2020~~ totaled ~~$992,173,~~$1,337,547, or ~~26.5%~~24.6% as a percentage of restaurant sales, and ~~$432,912,~~$1,019,769, or ~~22.8%~~27.2% as a percentage of restaurant sales, respectively. The ~~$559,261~~$317,778 increase is ~~primarily~~ due to higher third-party merchant fees ~~utility fees~~resulting from an increase in delivery orders and ~~insurance expenses attributed to~~ a higher store count during the ~~current period~~year as compared to the prior ~~period~~year. The increased store count also resulted in an increase in utility fees and insurance expenses. The other restaurant operating expenses as ~~the Company opened and acquired more stores as compared to the prior period.~~

~~Preopening expense for the six months ended June 30, 2021 and 2020 totaled $10,986 and $46,764 which resulted from expense incurred prior to the opening~~a percent of ~~our Company owned store. The decrease is a direct result of stores that opened subsequent to the prior period, partially offset~~total sales reduced (improved) by ~~new expense being incurred.~~2.7%.

Depreciation and amortization expense for the six months ended June 30, 2022 and June 30, 2021 totaled $965,381 and ~~2020 totaled~~ $453,774, ~~and $208,502,~~ respectively. The ~~$245,272~~$511,607 increase is ~~primarily~~mainly attributed to amortization expense attributed to the additions of definite life intangible assets of approximately $4,150,000 acquired through the various acquisitions during the prior year as compared to the prior year. The remaining of the variance is attributable to depreciation expense related to additional property and equipment acquired through acquisitions and additional property and equipment purchased for new store build outs and ~~additions~~the remodeling of ~~property~~an existing and ~~equipment additions through stores acquisitions~~acquired Company-owned restaurant compared to the prior year.

~~General~~Selling, general and administrative expenses for the six months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$4,961,955,~~$2,451,334, or ~~122.0%~~41.9% of total ~~revenues,~~revenue, and ~~$$6,343,254,~~$4,960,639, or ~~279.5%~~123.9% of total ~~revenues,~~revenue, respectively. The ~~$1,381,299~~$2,509,305 decrease was mainly attributed to a reduction in consulting expenses of approximately $1,011,412 which is ~~primarily attributable~~mainly due to stock-based compensation expense for stock issued to various consultants for various services rendered in the prior year as compared to the current year, a decrease in ~~salary~~professional fees of approximately $1,240,211 which resulted from the private placement fees incurred in prior period not incurred in current period and the changing our auditing firm during 2021 and a decrease in salaries and wages ~~including stock-based compensation,~~ of ~~$463,329~~approximately $344,838 resulting from a ~~decrease one time stock-based~~reduction in employee stock based compensation ~~and bonuses issued to~~expense as the executive ~~team upon the completion~~received shares of ~~the offering during~~common stock in the prior period as compared to the current period. The decrease was partially offset by ~~increased salaries and stock-based compensation issued~~the write offs of fixed assets of approximately $131,370 due to closed locations in the current period ~~and a decrease in one-time consulting expense during the current period compare~~as compared to the prior ~~period resulting in a decrease~~period. The remainder of ~~approximately $1,706,286. Partially offset by an~~the variance was attributed to various other expenses including recruiting, marketing, computer expenses, increase in ~~professional fees of $798,839, which mainly consist of a one-time~~franchise sales and marketing expense, ~~paid to a consultant in connection with the private placement during the current period of $665,000.~~etc.

Our loss from operations for the six months ended June 30, 2022 and 2021 ~~and 2020~~ totaled ~~$6,027,334~~$3,725,393, or ~~148.2%~~63.7% of total revenues and ~~$6,750,489~~$6,025,836, or ~~297.4%~~150.5% of total ~~revenues,~~revenue, respectively. The decrease of ~~$723,155~~$2,300,443 in loss from operations is primarily attributable to the increase inof total revenues of ~~approximately $1,797,753, partially offset by an increase~~$1,845,303 and a decrease in total ~~costs~~cost and expenses of approximately $1,074,598. The increase in total costs and expenses of approximately $1,074,598 is primarily due to one-time expenses of approximately $665,000 incurred in connection with our private placement. The remainder of the increase is attributed to the decrease depreciation and amortization, and total operating expenses that increase$455,140 as ~~compared to the prior period.~~discussed above.

Other ~~expense, net~~income (expense) for the six months ended June 30, 2022 and 2021 totaled $78,953 and ~~2020 totaled $1,193,449 and ($243,199),~~$1,193,013, respectively. The ~~$1,436,648~~$1,114,060 increase in other ~~income (expense)~~expense which was primarily attributable to a decrease in the gain on extinguishment of debt of ~~$875,974~~$734,695 due to the forgiveness of our PPP ~~loan,~~loans, an increase in other ~~income~~expenses of ~~approximately $239,857 due to a revitalization fund grant that was~~$260,198, mainly attributed to ~~one~~settlement expense partially offset by a decrease in interest expense of ~~our store locations, an increase of $223,500 in~~$8,333 and the change in fair value of accrued compensation ~~issued during the current period as compared to~~expense of $127,500 incurred in the prior ~~period due to administrative delays by the Company as the shares were earned by the consultant but not issued in the correct~~ period. Attributing to the increase in other income (expense) is a decrease in interest expense of $61,575 due to the reduction of interest bearing instrument in the current period as compared to the prior period and finally a decrease in amortization of debt discounts of $38,918

Our net loss before income tax for the six months ended June 30, 2022 was $3,646,440 which was an improvement of $1,186,383 as compared to a net loss of $4,832,823 for the six months ended June 30, 2021, ~~decreased by $2,159,803 to $4,833,885 as compared to $6,993,688~~resulting from an increase in our total revenue of $1,845,303, a decrease in our other income (expense) of $1,114,060 and a decrease of our total cost and expenses of $455,140. Our net loss for the six months ended June 30, ~~2020, resulting from~~2022 was $3,660,223 which was an ~~decrease~~improvement of $1,173,662 as compared to a net loss of $4,833,885 for the six months ended June 30, 2021.

The following table represents selected items in our ~~loss from~~condensed consolidated statements of operations ~~an decrease in other income (expense), net as discussed above.~~for the three months ended June 30, 2022, respectively by our operating segments:

The following table represents selected items in our condensed consolidated statements of operations for the six months ended June 30, 2022, respectively by our operating segments:

The following table represents selected items in our condensed consolidated statements of operations for the three months ended June 30, 2021, respectively by our operating segments:

The following table represents selected items in our condensed consolidated statements of operations for the six months ended June 30, 2021, respectively by our operating segments:

					June 30,		December 31,
	June 30, 2021		December 31, 2020		2022		2021
Cash	$	4,971,621	$	4,195,932	$	13,465,538	$	15,766,703
Working Capital Surplus	$	2,425,636	$	1,383,568	$	11,930,729	$	15,041,334
Convertible notes payable	$	182,458	$	182,458
Other notes payable, including related party	$	1,381,774	$	1,276,692
Convertible notes payable, including related parties and Former Parent, net					$	132,458	$	182,458
Other notes payable, including related parties					$	965,344	$	1,170,079

Although we have a working capital surplus of ~~$2,425,636,~~$11,930,729, we presently have an accumulated deficit of ~~$68,027,592,~~$75,052,859, as of June 30, ~~2021,~~2022, and we utilized ~~$3,700,395~~$1,905,110 of cash in operating activities during the ~~three~~six months ended June 30, ~~2021, therefore we require additional equity and/or debt financing~~2022. We believe that our existing cash on hand and future cash flows from our franchise operations, will be sufficient to ~~continue~~fund our ~~operations. These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from~~operations, anticipated capital expenditures and repayment obligations over the ~~date of this filing.~~next twelve months.

~~Our principal source of liquidity~~In the event we are required to ~~date has been provided by loans and convertible loans from related and unrelated third parties, (ii) the sale of common stock~~obtain additional financing, either through borrowings, private placements, ~~and (iii) and the sale~~public offerings, or some type of ~~common stock in public offerings.~~

~~The pandemic novel coronavirus (COVID-19) outbreak, federal, state~~business combination, such as a merger, or buyout, 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 during the first quarter of 2020 continuing through the third quarter of 2020. As a result of the disruption and volatility in the global capital markets, we have seen an increase in the cost of capital which adversely impacts access to capital.

On April 7, 2021, the Company entered into a Securities Purchase Agreement with an accredited investor (the “Securities Purchase Agreement”) for a private placement (the “Private Placement”) pursuant to which the investor agreed to purchase from the Company for an aggregate purchase price of approximately $10,000,000 (i) 1,250,000 shares of common stock of the Company (ii) a common stock purchase warrant to purchase up to 4,115,227 shares of Common Stock (the “Common Warrant”) and (iii) a pre-funded common stock purchase warrant to purchase up to 2,865,227 shares of Common Stock (the “Pre-Funded Warrant”). Each share and accompanying Common Warrant are being sold together at a combined offering price of $2.43 per share and Common Warrant, and each Pre-Funded Warrant and accompanying Common Warrant is being sold together at a combined offering price of $2.42 per Pre-Funded Warrant and accompanying Common Warrant. The Pre-Funded Warrant is immediately exercisable, at a nominal exercise price of $0.01 per share, and may be exercised at any time until the Pre-Funded Warrant is fully exercised. The Common Warrant will have an exercise price of $2.43 per share, are immediately exercisable and will expire five and one-half (5.5) years from the date of issuance. The Private Placement closed on April 9, 2021.

We expect to have ongoing needs for working capital in order to (a) fund operations; plus (b) expand operations by opening additional corporate-owned restaurants. To that end, we may be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in ~~securing~~such pursuits. We may be unable to acquire the additional ~~capital. If we are unsuccessful, we may need~~funding necessary to ~~(a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund our liabilities, or (d) seek protection from creditors.~~

~~In addition,~~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.

If we ~~are able~~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 ~~would~~could 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 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.

Our condensed consolidated financial statements included elsewhere in this 10-Q document have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate our continuation as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Sources and Uses of Cash for the ~~six months ended~~Six Months Ended June 30, ~~2021~~2022 and June 30, ~~2020~~2021

~~During~~For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, we used cash of ~~$3,700,395~~$1,905,110 and ~~$3,834,131,~~$3,700,395, respectively, in operations. Our cash used for the six months ended June 30, 2022 was primarily attributable to our net loss of $3,660,223, adjusted for net non-cash income in the aggregate amount of $1,149,565, partially offset by $605,548 of net cash provided by changes in the levels of operating assets and liabilities. Our net cash used in operating activities for the six months ended June 30, 2021 was primarily attributable to our net loss of $4,833,885, adjusted for net non-cash items in the aggregate amount of ~~$1,212,077~~$1,233,548 and ~~$78,587~~$100,058 of net cash provided by changes in the levels of operating assets and liabilities.

During the six months ended June 30, 2022, cash used in investing activities was $282,599, of which $282,999 was used to purchase property and equipment, partially offset by $400 of collections in loans receivable. During the six months ended June 30, 2021, net cash used in investing activities was $3,412,847, of which $98,257 was used to purchase property, $500,000 used in connection with acquisition of SuperFit foods a healthy meal prep Company, $2,815,390 used in connection with acquisition of Pokemoto, ~~a healthier modern culinary twist on traditional Hawaiian poke classic,~~ ~~and,~~ partially offset by $800 of loan collections from a former franchisee. During the six months ended June 30, 2020, net cash used in investing activities was $163,585, of which $172,387 was used to purchase property and equipment, partially offset by $8,802 of loans repayments by franchisees.

Net cash used by financing activities for the ~~three~~six months ended June 30, 2022 was $113,456, consisting of $63,456 of repayments of various other notes payable and the repayment of $50,000 on a convertible note. Net cash used by financing activities for the six months ended June 30, 2021 was $7,888,931 of which $9,181,350 was contributed by proceeds from a private placement offering , net of offering costs, $790,000 and proceeds from the exercising of the pre-funded warrants of $28,652, partially offset by repayments of various other notes payable of $1,221,071, which consisted mainly of SBA loans that was acquired through the Pokemoto acquisition and $100,000 cash paid to a former investor in connection with the cancellation of their shares. Net cash provided by financing activities for the six months ended June 30, 2020 was $6,680,057 of which $6,780,000 was contributed by proceeds from the offering ,net of underwriter’s discount and offering costs, $150,000 proceeds from other notes payable, $866,300 proceeds from the PPP loan, partially offset by repayments of various convertible notes of $550,000 and $566,243 of repayments of other notes payables, including a related party.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

~~We account~~The Company accounts for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, ~~we do~~the Company does not amortize intangible assets ~~with~~having indefinite useful lives. ~~Our~~The Company’s trademark – Muscle Maker had a finite life as of December 31, 2021. The Company determined that as of January 1, 2022, the trademark - Muscle Maker had a finite life of 3 years and will be amortizing the value over the new estimated life. The Company’s goodwill has an indefinite life, and ~~trademarks are deemed to have indefinite lives, and~~is accordingly ~~are~~ not amortized, but are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment.

~~Other intangible assets include a trademark with an indefinite useful life.~~ The other intangible assets estimated original useful lives are as follows:

When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, we perform an analysis to review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses, which reduce net income.

Deferred revenue primarily includes initial franchise fees received by the Company, which are being amortized over the life of the Company’s franchise agreements. Deferred revenue is recognized in income over the life of the franchise agreements and vendor rebates are recognized in income as performance obligations are satisfied.

~~In accordance with the Accounting Standards Codification~~The Company’s revenues consist of restaurant sales, franchise royalties and fees, franchise advertising fund contributions, and other revenues. The Company recognized revenues according to Topic 606 “Revenue from Contracts with Customers”,. Under the ~~Company~~guidance, revenue is recognized ~~revenue~~ in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when (or as) the entity satisfies a performance obligation. In applying this five-step model, we ~~have~~ made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations.

Retail store revenue at ~~Company operated~~Company-operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, ~~discount~~discounts and other sales related taxes. The Company recorded retail store revenues of $2,750,734 and $5,444,926 during the three and six months ended June 30, 2022, respectively, and $2,564,864 and $3,743,775 during the three and six months ended June 30, 2021, ~~respectively. The Company recorded retail store revenues of $659,939 and $1,897,366 during the three and six months ended June 30, 2020,~~ respectively.

Franchise revenues consists of royalties, franchise fees and rebates. Royalties are based on a percentage of franchisee net sales revenue. The Company recognizes the royalties as the underlying sales occur. The Company recorded revenue from royalties of $121,001 and $229,422 during the three and six months ended June 30, 2022, respectively, and $104,430 and $185,899 during the three and six months ended June 30, 2021, respectively, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations. The Company recorded revenue from royalties of $52,870 and $173,779 during the three and six months ended June 30, 2020, respectively, which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations.

The Company provides the franchisees with management expertise, training, pre-opening assistance, and restaurant operating assistance in exchange for the multi-unit development fees and franchise fees. The Company capitalizes these fees upon collection from the franchisee, these fees are then recognized as franchise fee revenue on a straight-line basis over the life of the related franchise agreements and any exercised renewal periods. Cash payments are due upon the execution of the related franchise agreement. The Company’s performance obligation with respect to franchise fee revenues consists of a license to utilize the Company’s brand for a specified period of time, which is satisfied equally over the life of each franchise agreement. The Company recorded ~~revenues~~revenue from franchise fees of ~~$12,352~~$15,315 and ~~$22,138, respectively,~~$64,206 during the three and six ~~months~~month ended June 30, ~~2021, which is included in franchise royalties~~2022, respectively, and ~~fees on the accompanying condensed consolidated statements of operations. The Company recorded revenues from franchise fees of $75,190~~$12,352 and ~~$89,630, respectively,~~$22,138 during the three and six ~~months~~month ended June 30, ~~2020,~~2021, respectively which is included in franchise royalties and fees on the accompanying condensed consolidated statements of operations.

The Company has supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to the Company based upon the dollar volume of purchases for all company-owned and franchised restaurants from these vendors. Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made. The Company recorded revenue from rebates of ~~$52,767~~$26,164 and ~~$96,852~~$76,993 during the three and six months ended June 30, 2022, respectively, and $18,468 and $33,898 during the three and six months ended June 30, 2021, respectively, which is included in franchise royalties and fees on the accompanying consolidated statements of operations. The Company recorded revenue from rebates of $14,233 and $54,915 during the three and six months ended June 30, 2020, respectively, which is included in franchise royalties and fees on the accompanyingcondensed consolidated statements of operations. Rebates earned on purchases by ~~Company owned~~Company-owned stores are recorded as a reduction of food and beverage costs during the period in which the related food and beverage purchases are made.

Under the Company’s franchise agreements, the Company and its franchisees are required to contribute a certain percentage of revenues to a national advertising fund. The Company’s national advertising services are provided on a system-wide basis and therefore, not considered distinct performance obligations for individual franchisees. In accordance with Topic 606, the Company recognizes these sales-based advertising contributions from franchisees as franchise revenue when the underlying franchisee Company incurs the corresponding advertising expense. The Company records the related advertising expenses as incurred under selling, general and administrative expenses. When an advertising contribution fund is over-spent at year end, advertising expenses will be reported on the condensed consolidated statement of operations in an amount that is greater than the revenue recorded for advertising contributions. Conversely, when an advertising contribution fund is under-spent at a period end, the Company will accrue advertising costs up to advertising contributions recorded in revenue. The Company recorded contributions from franchisees of $16,170 and $34,295 during the three and six months ended June 30, 2022, respectively, and $4,742 and $18,829 ~~respectively,~~ during the three and six months ended June 30, 2021, respectively, which are included in franchise advertising fund contributions on the accompanying condensed consolidated statements of operations.

Gift card breakage is recognized when the likelihood of a gift card being redeemed by the customer is remote and the Company determines there is not a legal obligation to remit the unredeemed gift card balance to the relevant jurisdiction. The ~~Company~~determination of the gift card breakage rate is based upon the Company’s specific historical redemption patterns. Gift card liability is recorded ~~contributions from franchisees of $32,454 and $54,050, respectively, during~~in other current liabilities on the condensed consolidated balance sheet. For the three and six months ended June 30, ~~2020,~~2022 and 2021, respectively, the Company did not record any gift card breakage.

We account for income taxes under Accounting Standards Codification (“ASC”) 740 Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

Tax benefits claimed or expected to be claimed on a tax return are recorded in our financial statements. A tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

Our policy is to classify assessments, if any, for tax related interest as interest expense and penalties as selling, general and administrative expenses in the condensed consolidated statements of operations.

See Note 32 to our condensed consolidated financial statements for the ~~three and~~ six months ended June 30, ~~2021.~~2022.

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

~~Pursuant to Rules 13a-15(b)~~Under the supervision and ~~15-d-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation,~~ with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. The term “disclosure controls and procedures”, as defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, ~~concluded that~~we conducted an evaluation of our disclosure controls and procedures, ~~were not~~as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the quarter ended June 30, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of such date our disclosure controls and procedures are effective ~~due~~in recording, processing, summarizing and reporting, on a timely basis, information requested to ~~material weaknesses~~be disclosed by us in our ~~internal control over financial reporting~~reports that ~~existed as of June 30, 2021, as discussed below.~~we file or submit under the Exchange Act.

~~As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, we identified the following material weaknesses:~~

As a company with limited resources, the Company does not have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function. However, Company management does review, and will increase the review of the financial statements. This action, in addition to future improvements identified above, will minimize any risk of a potential material misstatement occurring.

There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~quarter~~six months ended June 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we are a defendant or plaintiff in various legal actions that arise in the normal course of business. We record legal costs associated with loss contingencies as incurred and have accrued for all probable and estimable settlements.

We are currently involved in ~~material~~ pending legal proceedings that have been previously disclosed in our filings with the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended. Below is a summary of the ~~material~~ legal proceedings that have become a reportable event or which have had ~~material~~ developments during the ~~quarter~~six months ended June 30, ~~2021.~~2022.

On ~~March 27, 2018,~~April 24, 2022, the Company and a convertible note holder ~~filed~~entered into an agreement in which the Company will repay a ~~complaint~~total of $110,000 in connection with the default judgement issued on June 22, 2018, by the Iowa District Court for Polk County #CVCV056029, filed against the Company for failure to pay the remaining balance due on a promissory note in the amount of $100,000, together with interest, attorney fees and other costs of ~~$171,035. On~~$171,035.The Company agreed to pay $40,000 on or before May 1, 2020 and to make seven installment payments of $10,000 per month starting on or before June 6, 2018 a default judgement was entered against the Company for the amount of $171,035. The Company repaid an aggregate amount of $71,035, consisting of principal and interest, as of the date of the filing of this report.1, 2022. As of June 30, ~~2021,~~2022, the Company has accrued for the liability in convertible notes payable in the amount of ~~$100,000 and accrued interest of $25,116~~$50,000 which is included in accounts payable and accrued expenses.

In May 2018, Resolute Contractors, Inc., Quality Tile, MTL Construction, Genesis Electric, JNB Interiors and Captive Aire filed a Mechanics Lien for labor, service, equipment and materials in the total amount of $98,005. The Company intends to set up various payment plans with these vendors. As of June 30, 2021, the Company has accrued for the liability in accounts payable and accrued expenses.

On or about March 7, 2019, the Company was listed as a defendant to a lawsuit filed by a contractor in the State of ~~Texas.~~Texas in El Paso County #2019DCV0824. The contractor is claiming a breach of contract and is seeking approximately $32,809 in damages for services claimed to be rendered by the contractor. ~~The Company is working with legal counsel in order to reach a settlement.~~ As of June 30, ~~2021,~~2022, the Company accrued $30,000 for the liability in accounts payable and accrued expenses.

On January 23, 2020, the Company was served a judgment issued by the Judicial Council of California in the amount of $130,185 for a breach of a lease agreement in Chicago, Illinois, in connection with a ~~Company owned~~Company-owned store that was closed in 2018. As of June 30, ~~2021,~~2022, the Company has accrued for the liability in accounts payable and accrued expenses.

In March 2021, the Company participated in a mediation concerning an investor who invested with American Restaurant Holdings, Inc and/or American Restaurants, LLC, our former parent company, from 2013 through 2015 in the total amount of $531,250. As of the filing of this report, the company entered into a settlement with American Restaurant, LLC and the investor in the amount of $160,000. The Company paid $100,000 as part of the settlement, including legal fees, while the remining balance was paid by the insurance carrier and American Restaurants, LLC. See Note 12 Equity – Common stock for the cancellation of the investor shares pursuant to the agreement.

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management, such matters are currently not expected to have a material impact on the Company’s financial statements.

~~The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements after consulting legal counsel.~~

~~Muscle Maker~~MMI or its subsidiaries failed in certain instances in paying past state and local sales taxes collected from customers in specific states that impose a tax on sales of the Company’s products during 2017 and 2018. As of the second quarter June 30, 2020, all past due tax on sales from 2017 and 2018 has been paid in full. The Company had accrued ~~$252,558~~a sales tax liability for approximately $56,184 and ~~$231,177 which includes penalties and interest~~$125,550 as of June 30, ~~2021~~2022, and December 31, ~~2020, respectively, related to this matter.~~2021, respectively. All current state and local sales taxes from January 1, 2018, for open Company-owned locations have been fully paid and in a timely manner. The Company has completed ~~or is in discussions on~~all the payment plans with the various state or local entities for these past owed amounts.

Not applicable. See, however, Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors That May Affect Future Results and Financial Condition”) of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the SEC on ~~April 15, 2021.~~March 17, 2022.

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Form 10-K for the year ended December 31, 2020. In addition to our discussion in the MD&A, and other sections of this report, to address effects of the COVID-19 pandemic, we have provided an additional risk factor regarding COVID-19 below. The impact of COVID-19 can also exacerbate other risks discussed in the “Risk Factors” sections of our Form 10-K for the year ended December 31, 2020 and this Report, which could in turn have a material adverse effect on us. The risks discussed below and in the “Risk Factors” section in our Form 10-K for the year ended December 31, 2020 do not identify all risks that we face—our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

~~The COVID-19 pandemic has affected our business and could materially adversely affect our financial condition and results of operations and ability to continue as a going concern.~~

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States. In response to the COVID-19 outbreak, “shelter in place” orders and other public health measures have been implemented across much of the United States.

The COVID-19 global pandemic continues to rapidly evolve. The Company is continually monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, labor shortages resulting from various factors including mandatory vaccination requirements, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. The pandemic has resulted in a negative impact on the Company’s operations during the quarter ended June 30, 2021. However, due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be an additional material impact on operations and liquidity of the Company, the full impact could not be determined, as of the date of this report.

~~Our Superfit Foods, LLC meal prep company located and operating in the Jacksonville, FL market is exposed to the risk of natural disasters.~~

Our meal prep service located and operating throughout the Jacksonville, Florida market could be subject to natural disasters such as hurricanes, fires, floods, or tornados. Adverse weather conditions could result in events that adversely affect our services. Such events could result in physical damage to our property and outlying areas where our consumer base is located delaying future services and our total revenue and operation profits could be materially adversely affected. These events could also result in indirect consequences such as increase in cost of insurance if they result in significant loss of property.

~~Due to COVID-19 and the ongoing pandemic, we and our franchisees may face labor shortages or increased labor costs due to local regulations associated with mandated vaccinations.~~

Labor is a primary component in the cost of operating our company-operated and franchised restaurants. 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. Many industries, including the restaurant industry, are having difficulties in hiring and retaining qualified personnel as some employees have remained hesitant to rejoin the workforce. In addition to these factors, some parts of the country are instituting proof of vaccination requirements for indoor dining or be employed in restaurant positions that interact with the public, large group settings or office spaces. New York City has implemented these regulations as of August 16, 2021. The company may have to increase wages, reduce hours of operations or reduce menu offerings, among other tactics, to offset a potential lack of personnel to operate our restaurants. These events could materially affect our total revenue and operating profits.

~~Item~~ITEM 2. ~~Unregistered Sales of Equity Securities and Use of Proceeds.~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On ~~June 30, 2021,~~January 3, 2022, the Company authorized the issuance of an aggregate of ~~12,711~~1,200,000 shares of common stock in connection with the cashless exercise of the Pre-Funded Warrants. Pursuant to the terms of the Pre-Funded Warrants a total of 1,200,215 warrants were exercised.

On January 6, 2022, the Company authorized the issuance of an aggregate of 39,573 shares of common stock to the members of the board of directors as compensation earned during the fourth quarter of 2021. The Company accrued for the liability as of December 31, 2021.

On January 18, 2022, the Company issued an aggregate of 30,000 shares of common stock of the Company to a consultant that assisted with the acquisition of SuperFit Foods and Pokemoto, with an aggregate fair value amount of $15,600. The Company accrued for the liability as of December 31, 2021.

On April ~~7, 2021,~~4, 2022, the Company ~~entered into a Securities Purchase Agreement with an accredited investor (the “Securities Purchase Agreement”) for a private placement (the “Private Placement”) pursuant to which~~authorized the ~~investor agreed to purchase from the Company for an aggregate purchase price~~issuance of ~~approximately $10,000,000 (i) 1,250,000~~20,000 shares of common stock to a member of the ~~Company (ii) a common~~executive team per the employment agreement. The stock purchase warrant to purchase up to 4,115,227 shares of Common Stock (the “Common Warrant”) and (iii) a pre-funded common stock purchase warrant to purchase up to 2,865,227 shares of Common Stock (the “Pre-Funded Warrant”). Each share and accompanying Common Warrant are being sold together at a combined offering price of $2.43 per share and Common Warrant, and each Pre-Funded Warrant and accompanying Common Warrant is being sold together at a combined offering price of $2.42 per Pre-Funded Warrant and accompanying Common Warrant. The Pre-Funded Warrant is immediately exercisable, at a nominal exercise price of $0.01 per share, and may be exercised at any timewas not fully earned until the Pre-Funded Warrant is fully exercised. The Common Warrant will have an exercise price of $2.43 per share, are immediately exercisable and will expire five and one-half (5.5) years from the date of issuance. The Private Placement closed on April ~~9, 2021.~~4, 2022.

On ~~April 30, 2021,~~June 8, 2022, the Company ~~issued an aggregate~~authorized the issuance of ~~10,000~~5,000 shares of common stock ~~of the Company~~ to a ~~digital marketing consultant, pursuant to their service agreement, with an aggregate fair value of $14,700.~~contractor for work done at a Company owned location

On ~~May 6, 2021,~~June 30, 2022, the Company ~~issued an aggregate of 150,000~~recognized 30,910 shares of common stock offor book purpose to reconcile the ~~Company~~shares outstanding to ~~a digital marketing consultant with an aggregate fair value of $214,500. The Company accrued for~~ the ~~liability as accrued compensation expense on the books as of June 30, 2021, as the share were fully earned pursuant to their service agreement.~~transfer agent report.

On ~~May~~July 14, ~~2021,~~2022, the Company ~~and~~authorized the Poke Sellers entered into a Membership Interest Exchange Agreement pursuant to which the Company acquired Poke Co Holdings LLC, GLL Enterprises, LLC, and TNB Holdings II, LLC, each a Connecticut limited liability company (collectively, the Poke Entities II”) in exchange forissuance of an aggregate of 72,091 shares of common stock to the members of the ~~Company valued at $1,250,000. The Company issued 880,282 shares~~board of ~~common stock~~directors as compensation earned during the second quarter of ~~the Company. The price per share was determine by using the 10-day trading average preceding the date of closing. The closing occurred on May 14, 2021.~~2022.

The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.

~~Item~~ITEM 3. ~~Defaults Upon Senior Securities.~~DEFAULTS UPON SENIOR SECURITIES.

On May 4, 2021, Mr. Southall resigned from the compensation committee. On May 10, 2021, the Board appointed Major General (ret) Malcolm Frost to the compensation committee and added Philip Balatsos as an additional member to the compensation committee.

† Includes management contracts and compensation plans and ~~arrangements.~~arrangements

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Nevada		47-2555533
(State or ~~Other Jurisdiction of~~other jurisdiction		(I.R.S. Employer
~~Incorporation or Organization)~~of incorporation)		Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common ~~stock, $0.0001~~Stock, $0,0001 par value ~~per share~~		GRIL		The NASDAQCapital Market

ITEM NO.		NAME OF ITEM		Page

~~PART 1 – FINANCIAL INFORMATION~~

~~ITEM 1. Financial Statements.~~

	~~Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020~~	3

	~~Unaudited Condensed Consolidated Statements of Operations for the Three and Six months ended June 30, 2021 and 2020~~	4

	~~Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three and Six months ended June 30, 2020~~	5

	~~Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three and Six months ended June 30, 2021~~	6

	~~Unaudited Condensed Consolidated Statements of Cash Flows for the Three and Six months ended June 30, 2021 and 2020~~	7

	~~Notes to Unaudited Condensed Consolidated Financial Statements~~	9

~~ITEM 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~	25

~~ITEM 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk.~~	39

~~ITEM 4.~~	~~Controls and Procedures.~~	39

PART III - ~~OTHER~~FINANCIAL INFORMATION

ITEM 1.	~~Legal Proceedings.~~	40FINANCIAL STATEMENTS

~~ITEM 1A.~~	~~Risk Factors.~~UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2022 AND DECEMBER 31, 2021	41	3

~~ITEM 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds.~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021	42	4

~~ITEM 3.~~	~~Defaults Upon Senior Securities.~~UNAUDITED CONDENSED CONSOLIDATED STATMENTS OF CHANGES IN SHOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022	42	5

~~ITEM 4.~~	~~Mine Safety Disclosures.~~UNAUDITED CONDENSED CONSOLIDATED STATMENTS OF CHANGES IN SHOCKHOLDERS’ EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021	42	6

~~ITEM 5.~~	~~Other Information.~~UNAUDITED CONDENSED COLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021	42	7

~~ITEM 6.~~	~~Exhibits.~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	43
		9
ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		33
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		51
ITEM 4.		CONTROLS AND PROCEDURES		51

~~SIGNATURES~~PART II- OTHER INFORMATION			44	52
ITEM 1.		LEGAL PROCEEDING		52
ITEM 1A.		RISK FACTORS		52
ITEM 2.		UNGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		52
ITEM 3.		DEFAULTS UPON SENIOR SECURITIES		53
ITEM 4.		MINE SAFETY DISCLOSURES		53
ITEM 5.		OTHER INFORMATION		53
ITEM 6		EXHIBITS		53
		SIGNATURES		54

	Shares		Amount		Capital		Deficit			Total
					Additional
	Common Stock				Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance - December 31, 2019		5,714,464	$	571	$	53,339,793	$	(53,094,602	)	$	245,762
Issuance of restricted stock		1,226		-		-		-			-
Common stock issued upon offering on February 12, 2020, net of underwriter’s discount and offering costs of $920,000		1,540,000		154		6,779,846		-			6,780,000
Restricted common stock issued as compensation to executive team upon completion of the initial public offering		216,783		22		1,083,893		-			1,083,915
Common stock, pre-funded warrants and warrant issued in private placement on April 7, 2021, net of fees $790,000
Common stock, pre-funded warrants and warrant issued in private placement, shares
Common stock issued in exchange for accrued interest
Common stock issued in exchange for accrued interest, shares
Common stock issued as compensation to board of directors		25,616		3		128,077		-			128,080
Common stock issued as part of the acquisition of SuperFit Foods on March 25, 2021
Common stock issued as part of the acquisition of SuperFit Foods on March 25, 2021,Shares
Restricted common stock issued as compensation to executives and employees
Restricted common stock issued as compensation to executives and employees,Shares
Common stock issued as compensation for services		385,000		39		1,924,961		-			1,925,000
Exercise of pre-funding warrants
Exercise of pre-funding warrants,Shares
Cancellation of share per agreement with shareholder
Cancellation of share per agreement with shareholder,Shares
Common stock issued as compensation for services
Stock-based compensation:
Restricted common stock		-		-		20,148		-			20,148
Warrant		-		-		191,000		-			191,000
Net loss		-		-		-		(5,492,263	)		(5,492,263	)

Balance - March 31, 2020		7,883,089	$	789	$	63,467,718	$	(58,586,865	)	$	4,881,642
Common stock issued as compensation for services		20,000		2		56,198		-			56,200
Common stock issued in exchange for accrued interest		51,105		5		357,730		-			357,735
Common stock issued as compensation to board of directors		4,340		-		11,874		-			11,874
Stock-based compensation:
Restricted common stock		-		-		20,148		-			20,148
Net loss		-		-		-		(1,501,425	)		(1,501,425	)

Balance – June 30, 2020		7,958,534	$	796	$	63,913,668	$	(60,088,290	)	$	3,826,174

					Additional
	Common Stock				Paid-in			Accumulated
	Shares		Amount		Capital			Deficit			Total
Balance - December 31, 2021		26,110,268	$	2,611	$	95,760,493		$	(71,369,837	)	$	24,393,267
Cumulative effect of change in accounting principal		-		-		-			(15,010	)		(15,010	)
Cashless exercise of pre-funded warrants		2,409,604		241		(241	)					-
Common stock issued as compensation to board of directors		93,534		9		56,975						56,984
Common stock issued as compensation for services		30,000		3		15,599						15,602
Net loss		-		-		-			(1,886,079	)		(1,886,079	)

Balance - March 31, 2022		28,643,406	$	2,864	$	95,832,826		$	(73,270,926	)	$	22,564,764

Cumulative effect of change in accounting principal		-		-		-			(7,789	)		(7,789	)
Common stock issued as compensation for employment		20,000		2		10,798			-			10,800
Common stock issued as compensation for services		5,000		1		1,949			-			1,950
Stock based compensation - options		-		-		3,750			-			3,750
Reconciliation for shares outstanding per transfer agent		30,910		3		(3	)		-			-
Net loss		-		-		-			(1,774,144	)		(1,774,144	)

Balance - June 30, 2022		28,699,316	$	2,870	$	95,849,320		$	(75,052,859	)	$	20,799,331

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☒
~~Non-accelerated filer~~	☐	Smaller reporting company	☒

Emerging growth company	☒

	●	Muscle Maker Grill Restaurant Division
	●	Pokemoto Hawaiian Poke Restaurant Division
	●	Non-Traditional (Hybrid) Division
	●	SuperFit Foods Meal Prep Division

	●	~~the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;~~
	●	~~the estimated useful lives of intangible and depreciable assets;~~
	●	~~estimates and assumptions used to value warrants and options;~~
	●	~~the recognition of revenue; and~~
	●	~~the recognition, measurement and valuation of current and deferred income taxes.~~

~~Furniture and equipment~~	5 - 7 ~~years~~

~~Vehicles~~	5 ~~years~~

~~Leasehold improvements~~	~~0.5~~ – ~~10.38~~ ~~years~~

	●	the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;
	●	the estimated useful lives of intangible and depreciable assets;
	●	estimates and assumptions used to value warrants and options;
	●	the recognition of revenue; and
	●	the recognition, measurement and valuation of current and deferred income taxes.

	Furniture and equipment		3 - 7 years
	Leasehold improvements		1 - 11 years

	Franchisee agreements		13years

Franchise license		10years
	Trademark – Muscle Maker, SuperFit, and Pokemoto		3 – 5 years
	~~Trademark – SuperFit, Trademark – Pokemoto, domain~~Domain name, ~~customer~~Customer list and ~~proprietary~~Proprietary recipes	5 - 7 ~~years~~
	3 – 7 years
	Non-compete agreement		2- – 3years

	Pro Forma						Pro Forma
	(Unaudited)						(Unaudited)
	For the Three Months Ended						For the Six Months Ended
	June30,						June30,
	2021			2020			2021			2020
Revenues	$	2,739,155		$	1,696,536		$	4,574,993		$	3,131,590
Restaurant operating expenses		2,781,644			1,610,616			5,104,056			3,139,967
Total cost and expenses		5,066,351			3,000,930			10,549,600			9,792,537
Loss from Operations		(2,327,196	)		(1,304,394	)		(5,974,607	)		(6,660,947	)

	June 30, 2021			December 31, 2020
Loans receivable, net	$	6,556		$	3,390
Less: current portion		(6,556	)		(2,394	)
Loans receivable, non-current	$	-		$	996

Intangible Assets	Intangible assets, net at December 31, 2021		Acquisitions		Impairment of intangible assets		Amortization expense			Intangible assets, net at June 30, 2022
Trademark Muscle Maker Grill	$	1,525,653	$	-	$	-	$	(252,186	)	$	1,273,467
Franchise Agreements		162,439		-		-		(13,280	)		149,159
Trademark SuperFit		38,075		-		-		(4,461	)		33,614
Domain Name SuperFit		105,764		-		-		(12,390	)		93,374
Customer List SuperFit		118,455		-		-		(13,877	)		104,578
Proprietary Recipes SuperFit		135,378		-		-		(15,860	)		119,518
Non-Compete Agreement SuperFit		193,339		-		-		(42,938	)		150,401
Trademark Pokemoto		152,862		-		-		(17,347	)		135,515
Franchisee License Pokemoto		2,599,473		-		-		(137,534	)		2,461,939
Proprietary Recipes Pokemoto		1,027,916		-		-		(79,988	)		947,928
Non-Compete Agreement Pokemoto		328,110		-		-		(119,014	)		209,096

	$	6,387,464	$	-	$	-	$	(708,875	)	$	5,678,589

Intangible Assets	Trademark		Franchise Agreements			Trademark Superfit			Domain Name Superfit			Customer List Superfit			Proprietary Recipes Superfit			Non-Compete Agreement Superfit			Trademark Pokemoto			Franchisee License Pokemoto			Proprietary Recipes Pokemoto			Non-Compete Agreement Pokemoto			Total
Intangible assets, net at December 31, 2020	$	2,524,000	$	354,278		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	2,878,278
Superfit acquisition		-		-			45,000			125,000			140,000			160,000			260,000			-			-			-			-			730,000
Pokemoto acquisition		-		-			-			-			-			-			-			175,000			2,775,000			1,130,000			480,000			4,560,000
Amortization expense		-		(25,139	)		(2,391	)		(6,640	)		(7,437	)		(8,500	)		(23,011	)		(4,504	)		(35,713	)		(20,770	)		(30,904	)		(165,009	)
Intangible assets, net at June 30, 2021	$	2,524,000	$	329,139		$	42,609		$	118,360		$	132,563		$	151,500		$	236,989		$	170,496		$	2,739,287		$	1,109,230		$	449,096		$	8,003,269

Weighted average remaining amortization period at June 30, 2021 (in years)				6.57			4.73			4.73			4.73			4.73			2.74			4.87			9.87			6.87			1.87

For the six months ended June 30,	2023		2024		2025		2026		2027		Thereafter		Total
Trademark Muscle Maker Grill	$	508,551	$	509,944	$	254,972	$	-	$	-	$	-	$	1,273,467
Franchise Agreements		26,780		26,853		26,780		26,780		26,780		15,186		149,159
Trademark SuperFit		8,995		9,020		8,995		6,604		-		-		33,614
Domain Name SuperFit		24,986		25,055		24,986		18,347		-		-		93,374
Customer List SuperFit		27,985		28,061		27,985		20,547		-		-		104,578
Proprietary Recipes SuperFit		31,982		32,070		31,982		23,484		-		-		119,518
Non-Compete Agreement SuperFit		86,588		63,813		-		-		-		-		150,401
Trademark Pokemoto		34,981		35,077		34,981		30,476		-		-		135,515
Franchisee License Pokemoto		277,348		278,108		277,348		277,348		277,348		1,074,439		2,461,939
Proprietary Recipes Pokemoto		161,302		161,744		161,302		161,302		161,302		140,974		947,928
Non-Compete Agreement Pokemoto		209,096		-		-		-		-		-		209,096

Total	$	1,398,594	$	1,169,745	$	849,331	$	564,888	$	465,430	$	1,230,601	$	5,678,589

Goodwill	Muscle Maker Grill		Pokemoto		SuperFit Food		Total
Goodwill, net at December 31, 2021	$	570,000	$	1,798,399	$	258,000	$	2,626,399
Impairment of goodwill	��	-		-		-		-
Goodwill, net at June 30, 2022	$	570,000	$	1,798,399	$	258,000	$	2,626,399

	Principal
Repayments due as of	Amount
06/30/2023	$	127,062
06/30/2024		143,887
06/30/2025		110,200
06/30/2026		584,195
Thereafter		-
Long term debt	$	965,344

	Operating Leases
Fiscal Year:
Remainder of 2022	$	453,251
2023		770,701
2024		714,063
2025		579,602
2026		368,586
Thereafter		778,328
Total lease payments	$	3,664,531
Less imputed interest		(973,308	)
Present value of lease liabilities	$	2,691,223

	June 30,
	2022
Weighted-average remaining lease term (in year)
Operating leases		5.2
Weighted-average discount rate
Operating leases		12	%

	June 30, 2021			December 31, 2020
Franchise fees	$	1,084,742		$	983,958
Unearned vendor rebates		-			23,171
Less: Unearned vendor rebates, current		-			(23,171	)
Less: Franchise fees, current		(54,437	)		(39,687	)
Deferred revenues, non-current	$	1,030,305		$	944,271

	June 30, 2021		December 31, 2020
Gift card liability	$	92,958	$	91,034
Co-op advertising fund liability		297,017		299,490
Advertising fund liability		261,976		250,894
Other current liabilities	$	651,951	$	641,418

					Weighted
			Weighted		Average
			Average		Remaining
	Number of		Exercise		Life
	Options		Price		In Years
Outstanding, December 31, 2021		100,000	$	5.00		1.92
Issued		312,500		0.41
Exercised		-		-
Forfeited				-
Outstanding, June 30, 2022		412,500	$	1.21		4.04

Exercisable, June 30, 2022		115,625	$	4.38		1.89

				Weighted Average Grant
	Total			Date Fair Value
Outstanding at January 1, 2021		1,200		$	65.33
Granted		221,783			2.87
Forfeited		-			-
Vested		(222,983	)		(3.21	)
Outstanding at June 30, 2021		-		$	-

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life In Years
Outstanding, December 31, 2020		2,582,857		$	4.08		3.3
Issued		6,980,454			1.44		-
Exercised		(2,865,227	)		0.01		-
Forfeited/cancelled		(82,782	)		19.66		-
Outstanding, June 30, 2021		6,615,302		$	2.86		4.4

Exercisable, June 30, 2021		6,615,302		$	2.86		4.4

	●	Quality. Commitment to provide high quality, healthy-inspired food for a perceived wonderful experience for our guests.

	●	Empowerment and Respect. We seek to empower our employees to take initiative and give their best while respecting themselves and others to maintain an environment for team work and growth.

	●	~~Service.~~ Service. Provide world class service to achieve excellence each passing day.

	●	Value. Our combination of high-quality, healthy-inspired food, empowerment of our employees, world class service, all delivered at an affordable price, strengthens the value proposition for our customers.

				Muscle Maker			Pokemoto		Non-Traditional			SuperFit Foods
	Consolidated			Grill Division			Division		(Hybrid) Division			Division		Unallocated

Revenues:
Company restaurant sales, net of discounts	$	2,750,734		$	1,031,532		$	1,244,276	$	100,042		$	374,884	$	-
Franchise royalties and fees		162,480			93,019			69,461		-			-		-
Franchise advertising fund contributions		16,170			16,170			-		-			-		-
Total Revenues		2,929,384			1,140,721			1,313,737		100,042			374,884		-

Operating Costs and Expenses:
Restaurant operating expenses:
Food and beverage costs		1,117,419			458,897			497,244		52,269			109,009		-
Labor		903,062			374,779			349,586		91,755			86,942		-
Rent		326,819			120,307			94,374		82,538			29,600		-
Other restaurant operating expenses		687,823			247,842			305,892		62,291			71,798		-
Total restaurant operating expenses		3,035,123			1,201,825			1,247,096		288,853			297,349		-
Depreciation and amortization		489,654			57,380			30,314		35,970			9,595		356,395		(b)
Franchise advertising fund expenses		16,170			16,170			-		-			-		-
General and administrative expenses		1,126,857			-			-		-			-		1,126,857		(a)
Total Costs and Expenses		4,667,804			1,275,375			1,277,410		324,823			306,944		1,483,252
(Loss) Income from Operations		(1,738,420	)		(134,654	)		36,327		(224,781	)		67,940		(1,483,252	)

Other Income:
Other income		(14,468	)		-			-		-			-		(14,468	)
Interest expense, net		(9,945	)		-			-		-			-		(9,945	)
Total Other Income, Net		(24,413	)		-			-		-			-		(24,413	)

Loss Before Income Tax		(1,762,833	)		(134,654	)		36,327		(224,781	)		67,940		(1,507,665	)
Income tax provision		(11,311	)		-			-		-			-		(11,311	)
Net (Loss) Income	$	(1,774,144	)	$	(134,654	)	$	36,327	$	(224,781	)	$	67,940	$	(1,518,976	)

	(a)	Includes charges related to corporate expense that the Company does not allocate to the respective divisions. The largest portion of this expense relates to payroll, benefits and other compensation expense of $752,416, professional fees of $143,136, and consulting fees of $55,005.

	(b)	This includes amortization of intangible assets. See Note 7.

	(a)	Includes charges related to corporate expense that the Company does not allocate to the respective divisions. The largest portion of this expense relates to payroll, benefits and other compensation expense of $618,482, professional fees of $1,146,072, and consulting fees of $44,849.

	(b)	This includes amortization of intangible assets. See Note 7.

	(c)	Included in other income is the revitalization fund grant of approximately $240,000 that was granted to one of our company owned location.

	Franchisee agreements		13 years

Franchise license		10 years

Trademark – Muscle Maker, SuperFit, ~~Trademark –~~and Pokemoto ~~domain name, customer list and proprietary recipes~~		3 – 5 ~~- 7~~ years
	Domain name, Customer list and Proprietary recipes		3 – 7 years
	Non-compete agreement		2 -– 3 years

	●	The Company does not have sufficient resources in its accounting function, which restricts the Company’s 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.

	●	The Company has 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.

	●	The Company has significant deficiencies in the design and implementation of IT controls, specifically in the following areas: data center and network operations, access security and change management.

Exhibit No.		Exhibit Description

~~4.1+~~		~~Promissory Note in the principal amount of $730,000 dated May 14, 2021 (Incorporated by reference to Exhibit 4.1 to the Registrant’s current report on Form 8-K filed on May 14, 2021)~~

~~10.1+~~		Asset Purchase Agreement dated March 25, 2021 between Muscle Maker, Inc and SuperFit Foods, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s current report on Form 10-Q filed on May 21, 2021)

~~10.2+~~		Membership Interest Purchase Agreement dated May 14, 2021 between Muscle Maker, Inc. and Thienson Nguyen, Dennis Bok, William Bok, Lisa Bok and Gladys Longwa for the purchase of PKM Stamford, LLC, Poke Co., LLC, LB Holdings LLC, and TNB Holdings, LLC (Incorporated by reference to Exhibit 10.1 to the Registrant’s current report on Form 8-K filed on May 14, 2021)

~~10.3+~~		Membership Interest Exchange Agreement dated May 14, 2021 between Muscle Maker, Inc. and Thienson Nguyen, Dennis Bok, William Bok, Lisa Bok and Gladys Longwa for the purchase of Poke Co Holdings LLC, GLL Enterprises, LLC, and TNB Holdings II, LLC (Incorporated by reference to Exhibit 10.2 to the Registrant’s current report on Form 8-K filed on May 14, 2021)

~~10.4+~~		Intellectual Property License Agreement by and between Saladco Holdings, LLC and Poke Co Holdings, LLC dated May 14, 2021 (Incorporated by reference to Exhibit 10.3.1 to the Registrant’s current report on Form 8-K filed on May 14, 2021)

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		Inline XBRL Instance Document*
101.SCH		Inline XBRL Schema Document*
101.CAL		Inline XBRL Calculation Linkbase Document*
101.DEF		Inline XBRL Definition Linkbase Document*
101.LAB		Inline XBRL Label Linkbase Document*
101.PRE		Inline XBRL Presentation Linkbase Document*
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

Date: August ~~16, 2021~~11, 2022	MUSCLE MAKER, INC.

	By:	/s/ Michael J. Roper
		Michael J. Roper
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ ~~Ferdinand Groenewald~~Jennifer Black
		~~Ferdinand Groenewald~~Jennifer Black
		Chief Financial Officer
		(Principal Financial and Accounting Officer)