Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 11, 2022 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-39223 | |
Entity Registrant Name | Muscle Maker, Inc. | |
Entity Central Index Key | 0001701756 | |
Entity Tax Identification Number | 47-2555533 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1751 River Run, | |
Entity Address, Address Line Two | Suite 200, | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76107 | |
City Area Code | (832) | |
Local Phone Number | 604-9568 | |
Title of 12(b) Security | Common Stock, $0,0001 par value | |
Trading Symbol | GRIL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,773,335 | |
Former Address [Member] | ||
Entity Addresses [Line Items] | ||
Entity Address, Address Line One | 2600 South Shore Blvd., | |
Entity Address, Address Line Two | Suite 300, | |
Entity Address, City or Town | League City | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77573 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 13,465,538 | $ 15,766,703 |
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 | 213,549 | 258,785 |
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 | 595,440 | 1,789,328 |
Total Current Assets | 14,627,642 | 17,969,983 |
Right to use assets | 2,536,932 | |
Property and equipment, net | 2,023,787 | 2,280,267 |
Goodwill | 2,626,399 | 2,626,399 |
Intangible assets, net | 5,678,589 | 6,387,464 |
Security deposits and other assets | 179,278 | 167,770 |
Total Assets | 27,672,627 | 29,431,883 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 1,597,175 | 2,208,523 |
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 | 83,144 | 49,728 |
Deferred rent, current | 36,800 | |
Other current liabilities | 195,429 | 286,088 |
Total Current Liabilities | 2,696,913 | 2,928,649 |
Other notes payable, non-current | 838,260 | 1,005,027 |
Operating lease liability, non-current | 2,129,600 | |
Deferred revenue, non-current | 1,208,523 | 1,013,645 |
Deferred rent, non-current | 91,295 | |
Total Liabilities | 6,873,296 | 5,038,616 |
Commitments and Contingencies | ||
Stockholders’ Equity: | ||
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 | 95,849,320 | 95,760,493 |
Accumulated deficit | (75,052,859) | (71,369,837) |
Total Stockholders’ Equity | 20,799,331 | 24,393,267 |
Total Liabilities and Stockholders’ Equity | $ 27,672,627 | $ 29,431,883 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 8,230 | $ 23,693 |
Allowance for doubtful loans receivable | $ 4,032 | $ 71,184 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 28,699,316 | 26,110,268 |
Common stock, shares outstanding | 28,699,316 | 26,110,268 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues: | ||||
Total Revenues | $ 2,929,384 | $ 2,704,856 | $ 5,849,842 | $ 4,004,539 |
Restaurant operating expenses: | ||||
Total restaurant operating expenses | 3,035,123 | 2,747,163 | 6,124,225 | 4,586,147 |
Depreciation and amortization | 489,654 | 284,646 | 965,381 | 453,774 |
Franchise advertising fund expenses | 16,170 | 4,742 | 34,295 | 18,829 |
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 | 4,667,804 | 5,030,554 | 9,575,235 | 10,030,375 |
Loss from Operations | (1,738,420) | (2,325,698) | (3,725,393) | (6,025,836) |
Other Income (Expenses) : | ||||
Other income (expense) | (14,468) | 223,681 | (33,889) | 226,309 |
Interest expense, net | (9,945) | (22,596) | (28,437) | (36,770) |
Change in fair value of accrued compensation | 127,500 | 127,500 | ||
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 | (1,762,833) | (1,121,139) | (3,646,440) | (4,832,823) |
Income tax provision | (11,311) | (1,062) | (13,783) | (1,062) |
Net Loss | $ (1,774,144) | $ (1,122,201) | $ (3,660,223) | $ (4,833,885) |
Net Loss Per Share: | ||||
Basic and Diluted | $ (0.06) | $ (0.16) | $ (0.13) | $ (0.70) |
Weighted Average Number of Common Shares Outstanding: | ||||
Basic and Diluted | 28,668,116 | 6,916,218 | 28,235,052 | 6,916,218 |
Company Restaurant Net Sales [Member] | ||||
Revenues: | ||||
Total Revenues | $ 2,750,734 | $ 2,564,864 | $ 5,444,926 | $ 3,743,775 |
Franchise Royalties and Fees [Member] | ||||
Revenues: | ||||
Total Revenues | 162,480 | 135,250 | 370,621 | 241,935 |
Franchise Advertising Fund Contributions [Member] | ||||
Revenues: | ||||
Total Revenues | 16,170 | 4,742 | 34,295 | 18,829 |
Food and Beverage Costs [Member] | ||||
Restaurant operating expenses: | ||||
Total restaurant operating expenses | 1,117,419 | 886,392 | 2,143,354 | 1,362,198 |
Labor [Member] | ||||
Restaurant operating expenses: | ||||
Total restaurant operating expenses | 903,062 | 888,895 | 1,976,109 | 1,643,059 |
Rent [Member] | ||||
Restaurant operating expenses: | ||||
Total restaurant operating expenses | 326,819 | 304,930 | 667,215 | 561,121 |
Other Restaurant Operating Expenses [Member] | ||||
Restaurant operating expenses: | ||||
Total restaurant operating expenses | $ 687,823 | $ 666,946 | $ 1,337,547 | $ 1,019,769 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2020 | $ 1,172 | $ 68,987,663 | $ (63,193,707) | $ 5,795,128 |
Balance, shares at Dec. 31, 2020 | 11,725,764 | |||
Common stock issued as compensation to board of directors | $ 3 | 57,199 | 57,202 | |
Common stock issued as compensation to board of directors, shares | 28,837 | |||
Common stock issued as compensation for services | $ 30 | 676,670 | 676,700 | |
Common stock issued as compensation for services, shares | 300,000 | |||
Net loss | (3,711,684) | (3,711,684) | ||
Issuance of restricted stock | ||||
Issuance of restricted stock, shares | 1,200 | |||
Common stock issued as part of the acquisition | $ 27 | 624,973 | 625,000 | |
Common stock issued as part of the acquisition, shares | 268,240 | |||
Restricted common stock issued as compensation to executives and employees | $ 22 | 636,495 | 636,517 | |
Restricted common stock issued as compensation to executives and employees, shares | 221,783 | |||
Amortization of restricted common stock | 426 | 426 | ||
Balance at Mar. 31, 2021 | $ 1,254 | 70,983,426 | (66,905,391) | 4,079,289 |
Balance, shares at Mar. 31, 2021 | 12,545,824 | |||
Balance at Dec. 31, 2020 | $ 1,172 | 68,987,663 | (63,193,707) | 5,795,128 |
Balance, shares at Dec. 31, 2020 | 11,725,764 | |||
Net loss | (4,833,885) | |||
Balance at Jun. 30, 2021 | $ 1,769 | 81,572,113 | (68,027,592) | 13,546,290 |
Balance, shares at Jun. 30, 2021 | 17,689,454 | |||
Balance at Mar. 31, 2021 | $ 1,254 | 70,983,426 | (66,905,391) | 4,079,289 |
Balance, shares at Mar. 31, 2021 | 12,545,824 | |||
Common stock issued as compensation for services | $ 16 | 229,185 | 229,201 | |
Common stock issued as compensation for services, shares | 160,000 | |||
Net loss | (1,122,201) | (1,122,201) | ||
Common stock issued as part of the acquisition | $ 88 | 1,249,912 | 1,250,000 | |
Common stock issued as part of the acquisition, shares | 880,282 | |||
Common stock, pre-funded warrants and warrants issued in private placement on April 7, 2021, net of fees $790,000 | $ 125 | 9,181,224 | 9,181,349 | |
Common stock issued upon offering on February 12, 2020, net of underwriter's discount and offering costs, shares | 1,250,000 | |||
Exercise of pre-funding warrants | $ 287 | 28,365 | 28,652 | |
Exercise of pre-funding warrants, shares | 2,865,227 | |||
Cancellation of share per agreement with shareholder | $ (1) | (99,999) | (100,000) | |
Cancellation of share per agreement with shareholder,Shares | (11,879) | |||
Balance at Jun. 30, 2021 | $ 1,769 | 81,572,113 | (68,027,592) | 13,546,290 |
Balance, shares at Jun. 30, 2021 | 17,689,454 | |||
Balance at Dec. 31, 2021 | $ 2,611 | 95,760,493 | (71,369,837) | 24,393,267 |
Balance, shares at Dec. 31, 2021 | 26,110,268 | |||
Cumulative effect of change in accounting principal | (15,010) | (15,010) | ||
Cashless exercise of pre-funded warrants | $ 241 | (241) | ||
Cashless exercise of pre-funded warrants shares | 2,409,604 | |||
Common stock issued as compensation to board of directors | $ 9 | 56,975 | 56,984 | |
Common stock issued as compensation to board of directors, shares | 93,534 | |||
Common stock issued as compensation for services | $ 3 | 15,599 | 15,602 | |
Common stock issued as compensation for services, shares | 30,000 | |||
Net loss | (1,886,079) | (1,886,079) | ||
Balance at Mar. 31, 2022 | $ 2,864 | 95,832,826 | (73,270,926) | 22,564,764 |
Balance, shares at Mar. 31, 2022 | 28,643,406 | |||
Balance at Dec. 31, 2021 | $ 2,611 | 95,760,493 | (71,369,837) | 24,393,267 |
Balance, shares at Dec. 31, 2021 | 26,110,268 | |||
Net loss | (3,660,223) | |||
Balance at Jun. 30, 2022 | $ 2,870 | 95,849,320 | (75,052,859) | 20,799,331 |
Balance, shares at Jun. 30, 2022 | 28,699,316 | |||
Balance at Mar. 31, 2022 | $ 2,864 | 95,832,826 | (73,270,926) | 22,564,764 |
Balance, shares at Mar. 31, 2022 | 28,643,406 | |||
Cumulative effect of change in accounting principal | (7,789) | (7,789) | ||
Common stock issued as compensation for services | $ 1 | 1,949 | 1,950 | |
Common stock issued as compensation for services, shares | 5,000 | |||
Net loss | (1,774,144) | (1,774,144) | ||
Common stock issued as compensation for employment | $ 2 | 10,798 | 10,800 | |
Common stock issued as compensation to employment, shares | 20,000 | |||
Stock based compensation - options | 3,750 | 3,750 | ||
Reconciliation for shares outstanding per transfer agent | 3 | (3) | ||
Stock Issued During Period, Shares, Other | 30,910 | |||
Balance at Jun. 30, 2022 | $ 2,870 | $ 95,849,320 | $ (75,052,859) | $ 20,799,331 |
Balance, shares at Jun. 30, 2022 | 28,699,316 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) | 3 Months Ended |
Jun. 30, 2021 USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Offering costs | $ 790,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities | ||
Net loss | $ (3,660,223) | $ (4,833,885) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 965,381 | 453,774 |
Stock-based compensation | 89,086 | 1,727,545 |
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) | |
Bad debt expense | (58,692) | 18,676 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (123,256) | (102,563) |
Inventory | 45,236 | (35,779) |
Prepaid expenses and other current assets | 1,193,888 | (107,139) |
Security deposits and other assets | (11,508) | (6,000) |
Accounts payable and accrued expenses | (611,348) | 208,164 |
Deferred rent | (128,095) | (21,471) |
Operating right of use asset and lease liability, net | 131,492 | |
Deferred revenue | 228,294 | (45,803) |
Other current liabilities | (90,659) | 10,533 |
Total Adjustments | 1,755,113 | 1,133,490 |
Net Cash Used in Operating Activities | (1,905,110) | (3,700,395) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (282,999) | (98,257) |
Collections from loans receivable | 400 | 800 |
Net Cash Used in Investing Activities | (282,599) | (3,412,847) |
Cash Flows from Financing Activities | ||
Proceeds from Private Placement offering, net of offering cost | 9,181,350 | |
Proceeds from PPP loan | 28,652 | |
Cash paid in connection with the cancellation of shares | (100,000) | |
Repayments of convertible note | (50,000) | |
Repayments of other notes payables | (63,456) | (1,221,071) |
Net Cash (Used in) Provided by Financing Activities | (113,456) | 7,888,931 |
Net (Decrease) Increase in Cash | (2,301,165) | 775,689 |
Cash - Beginning of Period | 15,766,703 | 4,195,932 |
Cash - End of Period | 13,465,538 | 4,971,621 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 87,190 | 66,179 |
Supplemental Disclosures of non-cash investing and financing activities: | ||
Cashless exercise of pre-funded warrants | 241 | |
SuperFit Foods, LLC [Member] | ||
Cash Flows from Investing Activities | ||
Cash paid in connection with the acquisition of Pokemoto | (500,000) | |
Pokemoto, LLC [Member] | ||
Cash Flows from Investing Activities | ||
Cash paid in connection with the acquisition of Pokemoto | $ (2,815,390) |
BUSINESS ORGANIZATION AND NATUR
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS 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 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® 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® 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®. On March 25, 2021, MMI 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. 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 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, 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 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. MMI and its subsidiaries are hereinafter referred to as the “Company”. As of June 30, 2022, MMI consisted of four operating segments: ● Muscle Maker Grill Restaurant Division ● Pokemoto Hawaiian Poke Restaurant Division ● Non-Traditional (Hybrid) Division ● SuperFit Foods Meal Prep Division MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS, continued 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 Company operates under the name Muscle Maker Grill, Pokemoto and SuperFit Foods and is a franchisor and owner operator of Muscle Maker Grill and Pokemoto restaurants. As of June 30, 2022, the Company’s restaurant system included nineteen Company-owned restaurants, including the SuperFit Foods kitchen, and eighteen franchise restaurants. Liquidity Our primary source of liquidity is cash on hand. As of June 30, 2022, the Company had a cash balance, a working capital surplus and an accumulated deficit of $ 13,465,538 11,930,729 75,052,859 1,762,833 3,646,440 1,905,110 3,700,395 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation 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, 2022, and for the three and six months ended June 30, 2022, and 2021. The results of operations for the three and six months ended June 30, 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, 2021. The balance sheet as of December 31, 2021, has been derived from the Company’s audited financial statements. Principles of Consolidation 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. Reclassifications 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. MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Use of Estimates 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. 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: ● 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. 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. Cash and Cash Equivalents The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no Inventory 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. Property and Equipment 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: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT Furniture and equipment 3 7 years Leasehold improvements 1 11 years MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Intangible Assets The Company accounts for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, the Company does not amortize intangible assets having indefinite useful lives. 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 is accordingly 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. The other intangible assets estimated original useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF OTHER INTANGIBLE ASSETS Franchisee agreements 13 Franchise license 10 Trademark – Muscle Maker, SuperFit, and Pokemoto 3 5 Domain name, Customer list and Proprietary recipes 3 7 Non-compete agreement 2 3 Impairment of Long-Lived Assets When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs 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. 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 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 December 31, 2021, the Company deemed the conversion feature was not required to be bifurcated and recorded as a derivative liability. MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Revenue Recognition 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 guidance, revenue is recognized in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the 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 made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations. Restaurant Sales Retail store revenue at Company-operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, discounts and other sales related taxes. The Company recorded retail store revenues of $ 2,750,734 5,444,926 2,564,864 3,743,775 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 Royalties and Fees 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 $ 121,001 229,422 104,430 185,899 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 revenue from franchise fees of $ 15,315 64,206 12,352 22,138 MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Franchise Royalties and Fees, continued 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 $ 26,164 76,993 18,468 33,898 Franchise Advertising Fund Contributions 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 34,295 4,742 18,829 Other Revenues 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. Gift card liability is recorded in other current liabilities on the condensed consolidated balance sheet. For the three and six months ended June 30, 2022 and 2021, respectively, the Company did not record any gift card breakage. Deferred Revenue 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. Advertising Advertising costs are charged to expense as incurred. Advertising costs were approximately $ 750 101,146 34,152 58,203 MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Net Loss per Share 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, 2022 and 2021, respectively, because their inclusion would have been anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2022 2021 June 30, 2022 2021 Warrants 17,873,906 6,615,302 Options 412,500 100,000 Convertible debt 27,076 32,350 Total potentially dilutive shares 18,313,482 6,747,652 Major Vendor The Company engages various vendors to distribute food products to their Company-owned restaurants. Purchases from the Company’s largest supplier totaled 19% 30% 60.25 68.69 Fair Value of Financial Instruments 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: MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Fair Value of Financial Instruments, continued Level 1 — quoted prices in active markets for identical assets or liabilities 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 16– Equity – Warrant and Options Valuation for details related to accrued compensation liability being fair valued using Level 1 inputs. Leased Assets The Company adopted Topic 842 as of January 1, 2022 and recognized a cumulative-effect adjustment to the opening balance of accumulated deficit of $ 22,799 Income Taxes 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 impact on 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. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Stock-Based Compensation 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. Recent Accounting Pronouncements 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 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. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Subsequent Events 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. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 3 – ACQUISITIONS SuperFit Foods Acquisition On March 25, 2021, the Company entered into an asset purchase agreement with SuperFit Foods, LLC, a Florida limited liability company and SuperFit Foods, LLC, a Nevada limited liability company (the “SuperFit Acquisition”). The purchase price of the assets and rights was $ 1,150,000 500,000 25,000 625,000 268,240 The remaining $25,000, which was to be issued in the Company’s common stock, was forfeited as the Company and former owner agreed that not all obligations were met. The Company acquired the following assets as part of the purchase agreement, adjusted for purchase accounting adjustments to reflect the fair value of the net assets acquired during 2021: SCHEDULE OF ASSETS ACQUIRED IN BUSINESS COMBINATIONS Furniture and equipment $ 82,000 Vehicles 55,000 Tradename 45,000 Customer list 140,000 Domain name 125,000 Proprietary Recipes 160,000 Non-compete agreement 260,000 Intangible assets, net 260,000 Goodwill 258,000 Total assets acquired $ 1,125,000 The adjustment to the estimate identifiable net assets acquired resulted in a corresponding $ 25,000 25,000 The unaudited pro-forma financial information in the table below summarizes the condensed consolidated results of operations of the Company and SuperFit Foods, LLC as though the acquisition had occurred as of January 1, 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 BUSINESS ACQUISITION PRO FORMA INFORMATION 2022 2021 2022 2021 Pro Forma Pro Forma (Unaudited) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues $ 2,929,384 $ 2,739,155 $ 5,849,842 $ 4,574,993 Restaurant operating expenses 3,035,123 2,781,644 6,124,225 5,104,056 Total cost and expenses 4,667,804 5,066,351 9,575,235 10,549,600 Loss from Operations (1,738,420 ) (2,327,196 ) (3,725,393 ) (5,974,607 ) MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 3 – ACQUISITIONS, continued Pokemoto Acquisition 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 $ 4,000,000 730,000 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 $ 1,250,000 880,282 Poke Entities and Poke Entities II are 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, adjusted for purchase accounting adjustments to reflect our estimate of the fair value of the net assets acquired during 2021: SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATIONS Purchase Price $ 5,980,000 Assets Cash $ 1,184,610 Accounts Receivables - Inventory 19,500 Property and Equipment 297,529 Intangible assets, net 4,560,000 Operating lease right-of-use assets, net 719,941 Security deposits and other assets 35,580 $ 6,817,160 Liabilities Accounts payable and accrued expenses $ 296,224 Other notes payable 1,462,453 Deferred revenue 125,624 Operating lease liability 751,258 $ 2,635,559 Fair value of identifiable net assets acquired 4,181,601 Goodwill $ 1,798,399 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 3 – ACQUISITIONS, continued Pokemoto Acquisition, continued Identifiable intangible assets acquired include the following: SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS Fair Value Weighted average amortization period Tradename $ 175,000 5.00 Franchise License 2,775,000 10.00 Proprietary Recipes 1,130,000 7.00 Non-Compete 480,000 2.00 $ 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, 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 BUSINESS ACQUISITION PRO FORMA INFORMATION 2022 2021 2022 2021 Pro Forma Pro Forma (Unaudited) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues $ 2,929,384 $ 3,052,164 $ 5,849,842 $ 5,364,325 Restaurant operating expenses 3,035,123 2,926,106 6,124,225 5,514,292 Total cost and expenses 4,667,804 5,160,154 9,575,235 11,232,460 Loss from Operations (1,738,420 ) (2,107,990 ) (3,725,393 ) (5,868,135 ) |
LOANS RECEIVABLE
LOANS RECEIVABLE | 6 Months Ended |
Jun. 30, 2022 | |
Receivables [Abstract] | |
LOANS RECEIVABLE | NOTE 4 - LOANS RECEIVABLE At June 30, 2022 and December 31, 2021, the Company’s loans receivable balance was $ 0 Loans receivable includes loans to franchisees and a former franchisee totaling, in the aggregate, $ 0 0 4,032 71,184 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS At June 30, 2022 and December 31, 2021, the Company’s prepaid expenses and other current assets consisted of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, December 31, 2022 2021 Prepaid expenses $ 358,585 $ 83,975 Preopening expenses 50 602 Other receivables 236,805 1,704,751 Prepaid and Other Current Assets $ 595,440 $ 1,789,328 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 5 –PREPAID EXPENSES AND OTHER CURRENT ASSETS, continued Prepaid and other current assets, at June 30, 2022 and December 31, 2021 included a receivable of $ 236,805 1,704,751 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 6 – PROPERTY AND EQUIPMENT, NET As of June 30, 2022 and December 31, 2021, property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET June 30, December 31, 2022 2021 Furniture and equipment $ 1,321,638 $ 1,397,098 Vehicles 55,000 55,000 Leasehold improvements 1,918,104 1,981,019 Property and equipment, gross 3,294,742 3,433,117 Less: accumulated depreciation and amortization (1,270,955 ) (1,152,850 ) Property and equipment, net $ 2,023,787 $ 2,280,267 Depreciation expense amounted to $ 133,259 256,506 135,243 288,765 36,699 421,374 26,936 266,573 9,764 138,402 During the three and six months ended June 30, 2021, the Company wrote off property and equipment with an original cost value of $ 0 99,313 0 37,027 0 62,286 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS, NET Intangible Assets A summary of the intangible assets is presented below: SCHEDULE OF INTANGIBLE ASSETS 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, continued Amortization expense related to intangible assets was $ 356,395 708,875 149,403 165,009 The estimated future amortization expense is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 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 The Company determined that impairment testing of the Company’s intangible assets was not deemed necessary as of June 30, 2022. Therefore, no impairment charge is required. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS, NET, continued Goodwill A summary of the goodwill assets is presented below: SCHEDULE OF GOODWILL ASSETS 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 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. |
ACCOUNTS PAYABLES AND ACCRUED E
ACCOUNTS PAYABLES AND ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLES AND ACCRUED EXPENSES | NOTE 8 – ACCOUNTS PAYABLES AND ACCRUED EXPENSES Accounts payables and accrued expenses consist of the following: SCHEDULE OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES June 30, December 31, 2022 2021 Accounts payable $ 1,003,900 $ 734,688 Accrued payroll 157,122 758,732 Accrued professional fees 86,361 185,872 Accrued board members fees 28,496 57,573 Accrued rent expense 218,112 176,727 Accrued compensation expense - 36,600 Sales taxes payable (1) 56,184 125,550 Accrued interest - 28,426 Other accrued expenses 47,000 104,355 Total Accounts Payable and Accrued Expenses $ 1,597,175 $ 2,208,523 (1) See Note 14 – Commitments and Contingencies –Taxes for detailed related to delinquent sales taxes. |
CONVERTIBLE NOTE PAYABLE TO FOR
CONVERTIBLE NOTE PAYABLE TO FORMER PARENT | 6 Months Ended |
Jun. 30, 2022 | |
Convertible Note Payable To Former Parent | |
CONVERTIBLE NOTE PAYABLE TO FORMER PARENT | NOTE 9 – CONVERTIBLE NOTE PAYABLE TO FORMER PARENT On April 6, 2018, the Company issued a $ 475,000 3.50 On April 11, 2018, the Former Parent elected to partially convert the 2018 ARH Note for the principal of $ 392,542 112,154 The Company had an aggregate gross amount of $ 82,458 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 10 – NOTES PAYABLE Convertible Notes As of June 30, 2022 and December 31, 2021, the Company has convertible note payable in the amount of $ 50,000 100,000 Other Notes 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 8 5 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 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 $ 875,974 866,300 9,674 875,974 During the year ended December 31, 2021, as part of the Pokemoto acquisition, the Company acquired $ 1,171,400 During the year ended December 31, 2021, as part of the Pokemoto acquisition the Company acquired $ 291,053 0 139,877 0 1,402 During the six months ended June 30, 2022 and 2021, the Company repaid a total amount of $ 63,456 1,221,071 As of June 30, 2022, the Company had an aggregate amount of $ 965,344 1 8 The maturities of other notes payable as of June 30, 2022, are as follows: SCHEDULE OF MATURITIES OF OTHER NOTES PAYABLE 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 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 11 – LEASES 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 $ 242,263 483,851 As of June 30, 2022, assets and liabilities related to the Company’s leases were as follows: SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES June 30, 2022 Assets Right to use asset $ 2,536,932 Total lease assets $ 2,536,932 Liabilities Current: Operating leases $ 561,623 Noncurrent: Operating leases 2,129,600 Total Lease liabilities $ 2,691,223 As of June 30, 2022, the Company’s lease liabilities mature as follows: SCHEDULE OF OPERATING LEASE LIABILITY MATURITY 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 The Company’s lease term and discount rates were as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE June 30, 2022 Weighted-average remaining lease term (in year) Operating leases 5.2 Weighted-average discount rate Operating leases 12 % MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements |
DEFERRED REVENUE
DEFERRED REVENUE | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED REVENUE | NOTE 12 – DEFERRED REVENUE At June 30, 2022 and December 31, 2021, deferred revenue consists of the following: SCHEDULE OF DEFERRED REVENUE June 30, December 31, 2022 2021 Deferred revenues, net $ 1,291,668 $ 1,063,373 Less: Deferred revenues, current (83,114 ) (49,728 ) Deferred revenues, non-current $ 1,208,524 $ 1,013,645 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 13 – OTHER CURRENT LIABILITIES Other current liabilities consist of the following: SCHEDULE OF OTHER CURRENT LIABILITIES June 30, December 31, 2022 2021 Gift card liability $ 27,999 $ 27,633 Co-op advertising fund liability 69,185 126,564 Advertising fund liability 98,245 131,891 Other current liabilities $ 195,429 $ 286,088 See Note 2 – Significant Accounting Policies – Revenue Recognition for details related to the gift card liability and advertising fund liability. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES Franchising During the three and six months ended June 30, 2022, the Company entered into a various franchise agreement for a total of four and seventeen potentially new Pokemoto locations with various franchisees. The franchisees paid the Company an aggregate of $ 52,500 292,500 Litigations, Claims and Assessments On April 24, 2022, the Company and a convertible note holder entered into an agreement in which the Company will repay a total of $ 110,000 100,000 171,035 40,000 10,000 50,000 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 in El Paso County #2019DCV0824. The contractor is claiming a breach of contract and is seeking approximately $ 32,809 30,000 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 14 – COMMITMENTS AND CONTINGENCIES, continued Litigations, Claims and Assessments, continued On January 23, 2020, the Company was served a judgment issued by the Judicial Council of California in the amount of $ 130,185 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 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. Employment Agreements On January 2, 2022, the Company appointed Jennifer Black as Chief Financial Officer of the Company and entered into an Offer Letter with Ms. Black. Pursuant to the Offer Letter, Ms. Black will be employed as Chief Financial Officer of the Company on an at-will basis. Ms. Black is entitled to a base salary at the annualized rate of $ 190,000 20,000 20,000 On February 10, 2022, the Company entered into an Employment Agreement with Michael Roper effective February 14, 2022, which replaced his prior employment agreement. Pursuant to the Employment Agreement, Mr. Roper will continue to be employed as Chief Executive Officer of the Company on an at will basis. During the term of the Employment Agreement, Mr. Roper is entitled to a base salary at the annualized rate of $ 350,000 375,000 100,000 five years See Note 16 – Equity – Options for details related to the issuance of the stock options. 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 75 75,000 five years See Note 16 – Equity – Options for details related to the issuance of the stock options. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 14 – COMMITMENTS AND CONTINGENCIES, continued Employment Agreements, continued On February 9, 2022, the Company and Kenn Miller, Chief Operations Officer, entered a letter agreement 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 75 50,000 five years 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 25 42,500 five years 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 25 25,000 five years See Note 16 – Equity – Options for details related to the issuance of the stock options. Departure of Officer 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 Mr. Groenewald dated February 9, 2022. Nasdaq Notice On February 1, 2022, the Company received notice from The Nasdaq Stock Market (“Nasdaq”) that the closing bid price for the Company’s common stock had been below $ 1.00 Nasdaq’s notice has no immediate effect on the listing or trading of the Company’s common stock on The Nasdaq Capital Market. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 14 – COMMITMENTS AND CONTINGENCIES, continued Nasdaq Notice, continued The notice indicates that the Company will have 180 calendar days, until August 1, 2022, to regain compliance with this requirement. The Company can regain compliance with the $ 1.00 1.00 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. Taxes 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 has been paid in full. The Company had accrued a sales tax liability for approximately $ 56,184 125,550 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements |
REPORTABLE OPERATING SEGMENTS
REPORTABLE OPERATING SEGMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
REPORTABLE OPERATING SEGMENTS | NOTE 15 – REPORTABLE OPERATING SEGMENTS See Note 1 – Business Organization and Nature of Operations for descriptions of our operating segments. SUMMARY OF OPERATING SEGMENTS 2022 2021 2022 2021 For The Three Months Ended For The Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues Muscle Maker Grill Division $ 1,140,721 $ 1,436,779 $ 2,412,657 $ 2,600,455 Pokemoto Division 1,313,737 571,026 2,472,672 579,878 Non-traditional (Hybrid) Division 100,042 152,515 228,743 279,671 SuperFit Foods Division 374,884 544,536 735,770 544,535 Revenues $ 2,929,384 $ 2,704,856 $ 5,849,842 $ 4,004,539 Operating Loss Muscle Maker Grill Division $ (134,654 ) $ (124,997 ) $ (438,369 ) $ (472,765 ) Pokemoto Division 36,327 141,755 58,119 88,908 Non-Traditional (Hybrid) Division (224,781 ) (187,409 ) (269,439 ) (482,496 ) SuperFit Division 67,940 (11,641 ) 84,504 (33,835 ) Corporate and unallocated G&A expenses (a) (1,126,857 ) (1,994,003 ) (2,451,334 ) (4,960,639 ) Unallocated operating other income (expense) (b) (356,395 ) (149,403 ) (708,874 ) (165,009 ) Operating Loss $ (1,738,420 ) $ (2,325,698 ) $ (3,725,393 ) $ (6,025,836 ) Gain in debt extinguishment - 875,974 141,279 875,974 Interest expense, net (14,468 ) (22,596 ) (28,437 ) (36,770 ) Other non-operating income (expense) (9,945 ) 351,181 (33,889 ) 353,809 Loss before income taxes $ (1,762,833 ) $ (1,121,139 ) $ (3,646,440 ) $ (4,832,823 ) (a) Includes charges related to corporate expense that the Company does not allocate to the respective divisions. For the three months ended June 30, 2022 and 2021, largest portion of this expense relates to payroll, benefits and other compensation expense of $ 752,416 618,482 143,136 1,146,072 55,005 44,849 1,532,134 1,826,218 241,099 1,577,237 63,650 1,082,549 (b) This includes amortization of intangible assets. See Note 7. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
EQUITY | NOTE 16 – EQUITY Common Stock On January 3, 2022, the Company authorized the issuance of an aggregate of 1,200,000 1,200,215 On January 6, 2022, the Company authorized the issuance of an aggregate of 39,573 The Company accrued for the liability as of December 31, 2021. On January 18, 2022, the Company issued an aggregate of 30,000 15,600 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 16 – EQUITY, continued Common Stock On February 24, 2022, the Company authorized the issuance of an aggregate of 1,209,604 1,210,110 On March 31, 2022, the Company authorized the issuance of an aggregate of 53,961 On April 4, 2022, the Company authorized the issuance of 20,000 The stock was not fully earned until April 4, 2022. On June 8, 2022, the Company authorized the issuance of 5,000 On June 30, 2022, the Company recognized 30,910 Options On May 2, 2022, the Company, pursuant to the employment agreements, issued options to purchase an aggregate of 312,500 0.41 A summary of options activity during the three months ended June 30, 2022 is presented below: SCHEDULE OF OPTION ACTIVITY 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 MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 16 – EQUITY, continued Warrants A summary of warrants activity during the three months ended June 30, 2022 is presented below: SCHEDULE OF WARRANTS ACTIVITY Weighted Weighted Average Average Remaining Number of Exercise Life Warrants Price In Years Outstanding, December 31, 2021 20,284,016 $ 1.66 3.99 Issued - - Exercised (2,410,110 ) 0.01 Forfeited - - Outstanding, June 30, 2022 17,873,906 $ 1.89 4.03 Exercisable, June 30, 2022 17,873,906 $ 1.89 4.03 Stock-Based Compensation Expense Stock-based compensation related to restricted stock issued to employees, directors and consultants, warrants and warrants to consultants amounted to $ 44,996 117,582 44,996 117,334 0 248 14,700 1,727,545 14,700 1,727,297 0 248 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS Common Stock On July 14, 2022, the Company authorized the issuance of an aggregate of 72,091 Operating Lease On July 7, 2022, the Company entered into sublease agreement with a sublessor in Wichita, KS for a new Company owned location. The term of the sublease is from August 1, 2022, through Augusts 31, 2024 1,815 3,850 5 years Forfeiture of Stock Option On July 29, 2022, Ferdinand Groenewald employment was terminated with the company, which resulted in the forfeiture of 23,750 1,250 Nasdaq Notice 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. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation 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, 2022, and for the three and six months ended June 30, 2022, and 2021. The results of operations for the three and six months ended June 30, 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, 2021. The balance sheet as of December 31, 2021, has been derived from the Company’s audited financial statements. |
Principles of Consolidation | Principles of Consolidation 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. |
Reclassifications | Reclassifications 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. MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued |
Use of Estimates | Use of Estimates 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. 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: ● 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. 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no |
Inventory | Inventory 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. |
Property and Equipment | Property and Equipment 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: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT Furniture and equipment 3 7 years Leasehold improvements 1 11 years MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued |
Intangible Assets | Intangible Assets The Company accounts for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, the Company does not amortize intangible assets having indefinite useful lives. 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 is accordingly 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. The other intangible assets estimated original useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF OTHER INTANGIBLE ASSETS Franchisee agreements 13 Franchise license 10 Trademark – Muscle Maker, SuperFit, and Pokemoto 3 5 Domain name, Customer list and Proprietary recipes 3 7 Non-compete agreement 2 3 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs 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. |
Convertible Instruments | 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 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 December 31, 2021, the Company deemed the conversion feature was not required to be bifurcated and recorded as a derivative liability. MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued |
Revenue Recognition | Revenue Recognition 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 guidance, revenue is recognized in accordance with a five-step revenue model, as follows: (1) identifying the contract with the customer; (2) identifying the performance obligations in the 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 made significant judgments in identifying the promised goods or services in our contracts with franchisees that are distinct, and which represent separate performance obligations. Restaurant Sales Retail store revenue at Company-operated restaurants is recognized when payment is tendered at the point of sale, net of sales tax, discounts and other sales related taxes. The Company recorded retail store revenues of $ 2,750,734 5,444,926 2,564,864 3,743,775 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 Royalties and Fees 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 $ 121,001 229,422 104,430 185,899 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 revenue from franchise fees of $ 15,315 64,206 12,352 22,138 MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Franchise Royalties and Fees, continued 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 $ 26,164 76,993 18,468 33,898 Franchise Advertising Fund Contributions 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 34,295 4,742 18,829 Other Revenues 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. Gift card liability is recorded in other current liabilities on the condensed consolidated balance sheet. For the three and six months ended June 30, 2022 and 2021, respectively, the Company did not record any gift card breakage. Deferred Revenue 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. |
Advertising | Advertising Advertising costs are charged to expense as incurred. Advertising costs were approximately $ 750 101,146 34,152 58,203 MUSCLE MAKER, INC. AND SUBSIDIARIES Notes to Unaudited Condensed Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued |
Net Loss per Share | Net Loss per Share 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, 2022 and 2021, respectively, because their inclusion would have been anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2022 2021 June 30, 2022 2021 Warrants 17,873,906 6,615,302 Options 412,500 100,000 Convertible debt 27,076 32,350 Total potentially dilutive shares 18,313,482 6,747,652 |
Major Vendor | Major Vendor The Company engages various vendors to distribute food products to their Company-owned restaurants. Purchases from the Company’s largest supplier totaled 19% 30% 60.25 68.69 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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: MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued Fair Value of Financial Instruments, continued Level 1 — quoted prices in active markets for identical assets or liabilities 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 16– Equity – Warrant and Options Valuation for details related to accrued compensation liability being fair valued using Level 1 inputs. |
Leased Assets | Leased Assets The Company adopted Topic 842 as of January 1, 2022 and recognized a cumulative-effect adjustment to the opening balance of accumulated deficit of $ 22,799 |
Income Taxes | Income Taxes 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 impact on 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. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued |
Stock-Based Compensation | Stock-Based Compensation 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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 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. MUSCLE MAKER, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES, continued |
Subsequent Events | Subsequent Events 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. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT | SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT Furniture and equipment 3 7 years Leasehold improvements 1 11 years |
SCHEDULE OF ESTIMATED USEFUL LIVES OF OTHER INTANGIBLE ASSETS | The other intangible assets estimated original useful lives are as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF OTHER INTANGIBLE ASSETS Franchisee agreements 13 Franchise license 10 Trademark – Muscle Maker, SuperFit, and Pokemoto 3 5 Domain name, Customer list and Proprietary recipes 3 7 Non-compete agreement 2 3 |
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE | The following securities are excluded from the calculation of weighted average diluted common shares at June 30, 2022 and 2021, respectively, because their inclusion would have been anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2022 2021 June 30, 2022 2021 Warrants 17,873,906 6,615,302 Options 412,500 100,000 Convertible debt 27,076 32,350 Total potentially dilutive shares 18,313,482 6,747,652 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SuperFit Foods, LLC [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATIONS | The Company acquired the following assets as part of the purchase agreement, adjusted for purchase accounting adjustments to reflect the fair value of the net assets acquired during 2021: SCHEDULE OF ASSETS ACQUIRED IN BUSINESS COMBINATIONS Furniture and equipment $ 82,000 Vehicles 55,000 Tradename 45,000 Customer list 140,000 Domain name 125,000 Proprietary Recipes 160,000 Non-compete agreement 260,000 Intangible assets, net 260,000 Goodwill 258,000 Total assets acquired $ 1,125,000 |
SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION | SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION 2022 2021 2022 2021 Pro Forma Pro Forma (Unaudited) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues $ 2,929,384 $ 2,739,155 $ 5,849,842 $ 4,574,993 Restaurant operating expenses 3,035,123 2,781,644 6,124,225 5,104,056 Total cost and expenses 4,667,804 5,066,351 9,575,235 10,549,600 Loss from Operations (1,738,420 ) (2,327,196 ) (3,725,393 ) (5,974,607 ) |
Pokemoto Acquisition [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATIONS | The Company acquired the following assets as part of the purchase agreement, adjusted for purchase accounting adjustments to reflect our estimate of the fair value of the net assets acquired during 2021: SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATIONS Purchase Price $ 5,980,000 Assets Cash $ 1,184,610 Accounts Receivables - Inventory 19,500 Property and Equipment 297,529 Intangible assets, net 4,560,000 Operating lease right-of-use assets, net 719,941 Security deposits and other assets 35,580 $ 6,817,160 Liabilities Accounts payable and accrued expenses $ 296,224 Other notes payable 1,462,453 Deferred revenue 125,624 Operating lease liability 751,258 $ 2,635,559 Fair value of identifiable net assets acquired 4,181,601 Goodwill $ 1,798,399 |
SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION | SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION 2022 2021 2022 2021 Pro Forma Pro Forma (Unaudited) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues $ 2,929,384 $ 3,052,164 $ 5,849,842 $ 5,364,325 Restaurant operating expenses 3,035,123 2,926,106 6,124,225 5,514,292 Total cost and expenses 4,667,804 5,160,154 9,575,235 11,232,460 Loss from Operations (1,738,420 ) (2,107,990 ) (3,725,393 ) (5,868,135 ) |
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS | Identifiable intangible assets acquired include the following: SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS Fair Value Weighted average amortization period Tradename $ 175,000 5.00 Franchise License 2,775,000 10.00 Proprietary Recipes 1,130,000 7.00 Non-Compete 480,000 2.00 $ 4,560,000 8.22 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | At June 30, 2022 and December 31, 2021, the Company’s prepaid expenses and other current assets consisted of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS June 30, December 31, 2022 2021 Prepaid expenses $ 358,585 $ 83,975 Preopening expenses 50 602 Other receivables 236,805 1,704,751 Prepaid and Other Current Assets $ 595,440 $ 1,789,328 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET | As of June 30, 2022 and December 31, 2021, property and equipment consist of the following: SCHEDULE OF PROPERTY AND EQUIPMENT, NET June 30, December 31, 2022 2021 Furniture and equipment $ 1,321,638 $ 1,397,098 Vehicles 55,000 55,000 Leasehold improvements 1,918,104 1,981,019 Property and equipment, gross 3,294,742 3,433,117 Less: accumulated depreciation and amortization (1,270,955 ) (1,152,850 ) Property and equipment, net $ 2,023,787 $ 2,280,267 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | A summary of the intangible assets is presented below: SCHEDULE OF INTANGIBLE ASSETS 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 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | The estimated future amortization expense is as follows: SCHEDULE OF FUTURE AMORTIZATION EXPENSE 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 |
SCHEDULE OF GOODWILL ASSETS | A summary of the goodwill assets is presented below: SCHEDULE OF GOODWILL ASSETS 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 |
ACCOUNTS PAYABLES AND ACCRUED_2
ACCOUNTS PAYABLES AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES | Accounts payables and accrued expenses consist of the following: SCHEDULE OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES June 30, December 31, 2022 2021 Accounts payable $ 1,003,900 $ 734,688 Accrued payroll 157,122 758,732 Accrued professional fees 86,361 185,872 Accrued board members fees 28,496 57,573 Accrued rent expense 218,112 176,727 Accrued compensation expense - 36,600 Sales taxes payable (1) 56,184 125,550 Accrued interest - 28,426 Other accrued expenses 47,000 104,355 Total Accounts Payable and Accrued Expenses $ 1,597,175 $ 2,208,523 (1) See Note 14 – Commitments and Contingencies –Taxes for detailed related to delinquent sales taxes. |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF MATURITIES OF OTHER NOTES PAYABLE | The maturities of other notes payable as of June 30, 2022, are as follows: SCHEDULE OF MATURITIES OF OTHER NOTES PAYABLE 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 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES | As of June 30, 2022, assets and liabilities related to the Company’s leases were as follows: SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES June 30, 2022 Assets Right to use asset $ 2,536,932 Total lease assets $ 2,536,932 Liabilities Current: Operating leases $ 561,623 Noncurrent: Operating leases 2,129,600 Total Lease liabilities $ 2,691,223 |
SCHEDULE OF OPERATING LEASE LIABILITY MATURITY | As of June 30, 2022, the Company’s lease liabilities mature as follows: SCHEDULE OF OPERATING LEASE LIABILITY MATURITY 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 |
SCHEDULE OF LEASE TERM AND DISCOUNT RATE | The Company’s lease term and discount rates were as follows: SCHEDULE OF LEASE TERM AND DISCOUNT RATE June 30, 2022 Weighted-average remaining lease term (in year) Operating leases 5.2 Weighted-average discount rate Operating leases 12 % |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF DEFERRED REVENUE | At June 30, 2022 and December 31, 2021, deferred revenue consists of the following: SCHEDULE OF DEFERRED REVENUE June 30, December 31, 2022 2021 Deferred revenues, net $ 1,291,668 $ 1,063,373 Less: Deferred revenues, current (83,114 ) (49,728 ) Deferred revenues, non-current $ 1,208,524 $ 1,013,645 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
SCHEDULE OF OTHER CURRENT LIABILITIES | Other current liabilities consist of the following: SCHEDULE OF OTHER CURRENT LIABILITIES June 30, December 31, 2022 2021 Gift card liability $ 27,999 $ 27,633 Co-op advertising fund liability 69,185 126,564 Advertising fund liability 98,245 131,891 Other current liabilities $ 195,429 $ 286,088 |
REPORTABLE OPERATING SEGMENTS (
REPORTABLE OPERATING SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SUMMARY OF OPERATING SEGMENTS | SUMMARY OF OPERATING SEGMENTS 2022 2021 2022 2021 For The Three Months Ended For The Six Months Ended June 30, June 30, 2022 2021 2022 2021 Revenues Muscle Maker Grill Division $ 1,140,721 $ 1,436,779 $ 2,412,657 $ 2,600,455 Pokemoto Division 1,313,737 571,026 2,472,672 579,878 Non-traditional (Hybrid) Division 100,042 152,515 228,743 279,671 SuperFit Foods Division 374,884 544,536 735,770 544,535 Revenues $ 2,929,384 $ 2,704,856 $ 5,849,842 $ 4,004,539 Operating Loss Muscle Maker Grill Division $ (134,654 ) $ (124,997 ) $ (438,369 ) $ (472,765 ) Pokemoto Division 36,327 141,755 58,119 88,908 Non-Traditional (Hybrid) Division (224,781 ) (187,409 ) (269,439 ) (482,496 ) SuperFit Division 67,940 (11,641 ) 84,504 (33,835 ) Corporate and unallocated G&A expenses (a) (1,126,857 ) (1,994,003 ) (2,451,334 ) (4,960,639 ) Unallocated operating other income (expense) (b) (356,395 ) (149,403 ) (708,874 ) (165,009 ) Operating Loss $ (1,738,420 ) $ (2,325,698 ) $ (3,725,393 ) $ (6,025,836 ) Gain in debt extinguishment - 875,974 141,279 875,974 Interest expense, net (14,468 ) (22,596 ) (28,437 ) (36,770 ) Other non-operating income (expense) (9,945 ) 351,181 (33,889 ) 353,809 Loss before income taxes $ (1,762,833 ) $ (1,121,139 ) $ (3,646,440 ) $ (4,832,823 ) (a) Includes charges related to corporate expense that the Company does not allocate to the respective divisions. For the three months ended June 30, 2022 and 2021, largest portion of this expense relates to payroll, benefits and other compensation expense of $ 752,416 618,482 143,136 1,146,072 55,005 44,849 1,532,134 1,826,218 241,099 1,577,237 63,650 1,082,549 (b) This includes amortization of intangible assets. See Note 7. |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
SCHEDULE OF OPTION ACTIVITY | A summary of options activity during the three months ended June 30, 2022 is presented below: SCHEDULE OF OPTION ACTIVITY 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 |
SCHEDULE OF WARRANTS ACTIVITY | A summary of warrants activity during the three months ended June 30, 2022 is presented below: SCHEDULE OF WARRANTS ACTIVITY Weighted Weighted Average Average Remaining Number of Exercise Life Warrants Price In Years Outstanding, December 31, 2021 20,284,016 $ 1.66 3.99 Issued - - Exercised (2,410,110 ) 0.01 Forfeited - - Outstanding, June 30, 2022 17,873,906 $ 1.89 4.03 Exercisable, June 30, 2022 17,873,906 $ 1.89 4.03 |
BUSINESS ORGANIZATION AND NAT_2
BUSINESS ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jan. 02, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Cash | $ 13,465,538 | $ 13,465,538 | $ 15,766,703 | |||
Working capital deficit | 11,930,729 | 11,930,729 | ||||
Accumulated deficit | 75,052,859 | 75,052,859 | $ (15,010) | $ 71,369,837 | ||
Pre-tax net loss | $ 1,762,833 | $ 1,121,139 | 3,646,440 | $ 4,832,823 | ||
Net cash used in operations | $ 1,905,110 | $ 3,700,395 |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Furniture and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Furniture and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 7 years |
Leaseholds and Leasehold Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 1 year |
Leaseholds and Leasehold Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 11 years |
SCHEDULE OF ESTIMATED USEFUL _2
SCHEDULE OF ESTIMATED USEFUL LIVES OF OTHER INTANGIBLE ASSETS (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Franchisee Agreements [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 13 years |
Franchise License [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Trademarks [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Trademarks [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Domain Name, Customer List and Proprietary Recipes [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Domain Name, Customer List and Proprietary Recipes [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 7 years |
Noncompete Agreements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Noncompete Agreements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
SCHEDULE OF ANTIDILUTIVE SECURI
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE (Details) - shares | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 18,313,482 | 6,747,652 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 17,873,906 | 6,615,302 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 412,500 | 100,000 |
Convertible Debt Securities [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 27,076 | 32,350 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jan. 02, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||||
Cash equivalents | $ 0 | $ 0 | $ 0 | |||
Revenues | 2,929,384 | $ 2,704,856 | 5,849,842 | $ 4,004,539 | ||
Advertising Expense | 750 | $ 34,152 | 101,146 | $ 58,203 | ||
Accumulated deficit | $ (75,052,859) | $ (75,052,859) | $ 15,010 | $ (71,369,837) | ||
Accounting Standards Update 2016-02 [Member] | ||||||
Product Information [Line Items] | ||||||
Accumulated deficit | $ 22,799 | |||||
Supplier Concentration Risk [Member] | Cost of Goods and Service, Product and Service Benchmark [Member] | Supplier [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration Risk, Percentage | 19% | 60.25% | 30% | 68.69% | ||
Company Restaurant Net Sales [Member] | ||||||
Product Information [Line Items] | ||||||
Revenues | $ 2,750,734 | $ 2,564,864 | $ 5,444,926 | $ 3,743,775 | ||
Royalty [Member] | ||||||
Product Information [Line Items] | ||||||
Revenues | 121,001 | 104,430 | 229,422 | 185,899 | ||
Franchise Fees [Member] | ||||||
Product Information [Line Items] | ||||||
Revenues | 15,315 | 12,352 | 64,206 | 22,138 | ||
Rebates [Member] | ||||||
Product Information [Line Items] | ||||||
Revenues | 26,164 | 18,468 | 76,993 | 33,898 | ||
Franchise Advertising Fund Contributions [Member] | ||||||
Product Information [Line Items] | ||||||
Revenues | $ 16,170 | $ 4,742 | $ 34,295 | $ 18,829 |
SCHEDULE OF ASSETS ACQUIRED IN
SCHEDULE OF ASSETS ACQUIRED IN BUSINESS COMBINATIONS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Goodwill | $ 2,626,399 | $ 2,626,399 |
SuperFit Foods, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Goodwill | 258,000 | |
Total assets acquired | 1,125,000 | |
SuperFit Foods, LLC [Member] | Trade Names [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | 45,000 | |
SuperFit Foods, LLC [Member] | Customer List [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | 140,000 | |
SuperFit Foods, LLC [Member] | Domain Name [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | 125,000 | |
SuperFit Foods, LLC [Member] | Proprietary Recipes [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | 160,000 | |
SuperFit Foods, LLC [Member] | Non-compete Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, net | 260,000 | |
SuperFit Foods, LLC [Member] | Furniture and Equipment [Member] | ||
Business Acquisition [Line Items] | ||
Vehicles | 82,000 | |
SuperFit Foods, LLC [Member] | Vehicles [Member] | ||
Business Acquisition [Line Items] | ||
Vehicles | $ 55,000 |
SCHEDULE OF BUSINESS ACQUISITIO
SCHEDULE OF BUSINESS ACQUISITION PRO FORMA INFORMATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
SuperFit Foods, LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | $ 2,929,384 | $ 2,739,155 | $ 5,849,842 | $ 4,574,993 |
Restaurant operating expenses | 3,035,123 | 2,781,644 | 6,124,225 | 5,104,056 |
Total cost and expenses | 4,667,804 | 5,066,351 | 9,575,235 | 10,549,600 |
Loss from Operations | (1,738,420) | (2,327,196) | (3,725,393) | (5,974,607) |
Pokemoto Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | 2,929,384 | 3,052,164 | 5,849,842 | 5,364,325 |
Restaurant operating expenses | 3,035,123 | 2,926,106 | 6,124,225 | 5,514,292 |
Total cost and expenses | 4,667,804 | 5,160,154 | 9,575,235 | 11,232,460 |
Loss from Operations | $ (1,738,420) | $ (2,107,990) | $ (3,725,393) | $ (5,868,135) |
SCHEDULE OF ASSETS AND LIABILIT
SCHEDULE OF ASSETS AND LIABILITIES ACQUIRED IN BUSINESS COMBINATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Jun. 30, 2022 | |
Liabilities | ||
Goodwill | $ 2,626,399 | $ 2,626,399 |
Pokemoto Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Purchase Price | 5,980,000 | |
Assets | ||
Cash | 1,184,610 | |
Accounts Receivables | ||
Inventory | 19,500 | |
Property and Equipment | 297,529 | |
Intangible assets, net | 4,560,000 | |
Operating lease right-of-use assets, net | 719,941 | |
Security deposits and other assets | 35,580 | |
Total assets acquired | 6,817,160 | |
Liabilities | ||
Accounts payable and accrued expenses | 296,224 | |
Other notes payable | 1,462,453 | |
Deferred revenue | 125,624 | |
Operating lease liability | 751,258 | |
Total liabilities acquired | 2,635,559 | |
Fair value of identifiable net assets acquired | 4,181,601 | |
Goodwill | $ 1,798,399 |
SCHEDULE OF IDENTIFIABLE INTANG
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Intangible Assets, Fair Value | ||
Pokemoto Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Intangible Assets, Fair Value | $ 4,560,000 | |
Intangible Assets, Weighted average amortization period | 8 years 2 months 19 days | |
Pokemoto Acquisition [Member] | Trade Names [Member] | ||
Business Acquisition [Line Items] | ||
Intangible Assets, Fair Value | $ 175,000 | |
Intangible Assets, Weighted average amortization period | 5 years | |
Pokemoto Acquisition [Member] | Franchise License [Member] | ||
Business Acquisition [Line Items] | ||
Intangible Assets, Fair Value | $ 2,775,000 | |
Intangible Assets, Weighted average amortization period | 10 years | |
Pokemoto Acquisition [Member] | Proprietary Recipes [Member] | ||
Business Acquisition [Line Items] | ||
Intangible Assets, Fair Value | $ 1,130,000 | |
Intangible Assets, Weighted average amortization period | 7 years | |
Pokemoto Acquisition [Member] | Non Compete [Member] | ||
Business Acquisition [Line Items] | ||
Intangible Assets, Fair Value | $ 480,000 | |
Intangible Assets, Weighted average amortization period | 2 years |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | 6 Months Ended | |||
May 14, 2021 | Mar. 25, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
SuperFit Foods, LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 1,150,000 | |||
Payments to acquire businesses, gross | 500,000 | $ 500,000 | ||
Business combinations escrow account held amount | 25,000 | |||
Business combination, consideration transferred, equity interests issued and issuable | $ 625,000 | |||
Business acquisition, equity interest issued or issuable, shares issued | 268,240 | |||
Business combination, consideration transferred, equity interests issued and issuable fair value method | The remaining $25,000, which was to be issued in the Company’s common stock, was forfeited as the Company and former owner agreed that not all obligations were met. | |||
Change in goodwill | $ 25,000 | |||
Business acquisition, other liability | $ 25,000 | |||
Poke Entities [Member] | Members Interest Purchase Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 4,000,000 | |||
Notes payable | $ 730,000 | |||
Poke Entities II [Member] | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, equity interest issued or issuable, shares issued | 880,282 | |||
Business acquisition, equity interest issued or issuable, value assigned | $ 1,250,000 |
LOANS RECEIVABLE (Details Narra
LOANS RECEIVABLE (Details Narrative) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Loans receivable, non-current | $ 0 | $ 0 |
Financing receivable, after allowance for credit loss | 0 | 0 |
Reserves for uncollectible loans | $ 4,032 | $ 71,184 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 358,585 | $ 83,975 |
Preopening expenses | 50 | 602 |
Other receivables | 236,805 | 1,704,751 |
Prepaid and Other Current Assets | $ 595,440 | $ 1,789,328 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Prepaid and other current assets | $ 595,440 | $ 1,789,328 |
Employee Retention Tax Credits Receivable [Member] | ||
Prepaid and other current assets | $ 236,805 | $ 1,704,751 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Abstract] | ||
Furniture and equipment | $ 1,321,638 | $ 1,397,098 |
Vehicles | 55,000 | 55,000 |
Leasehold improvements | 1,918,104 | 1,981,019 |
Property and equipment, gross | 3,294,742 | 3,433,117 |
Less: accumulated depreciation and amortization | (1,270,955) | (1,152,850) |
Property and equipment, net | $ 2,023,787 | $ 2,280,267 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 133,259 | $ 135,243 | $ 256,506 | $ 288,765 |
Property, plant and equipment, disposals | 36,699 | 0 | 421,374 | 99,313 |
Gain (loss) on disposition of property plant equipment | 26,936 | 0 | 266,573 | 37,027 |
Property and Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation, depletion and amortization, property, plant, and equipment | $ 9,764 | $ 0 | $ 138,402 | $ 62,286 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | $ 6,387,464 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | $ (356,395) | $ (149,403) | (708,875) | $ (165,009) |
Intangible assets, net, ending balance | 5,678,589 | 5,678,589 | ||
Trademark Muscle Maker Grill [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 1,525,653 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (252,186) | |||
Intangible assets, net, ending balance | 1,273,467 | 1,273,467 | ||
Franchise Agreements [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 162,439 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (13,280) | |||
Intangible assets, net, ending balance | 149,159 | 149,159 | ||
Trademark SuperFit [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 38,075 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (4,461) | |||
Intangible assets, net, ending balance | 33,614 | 33,614 | ||
Domain Name SuperFit [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 105,764 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (12,390) | |||
Intangible assets, net, ending balance | 93,374 | 93,374 | ||
Customer List SuperFit [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 118,455 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (13,877) | |||
Intangible assets, net, ending balance | 104,578 | 104,578 | ||
Proprietary Recipes SuperFit [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 135,378 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (15,860) | |||
Intangible assets, net, ending balance | 119,518 | 119,518 | ||
Non-Compete Agreement SuperFit [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 193,339 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (42,938) | |||
Intangible assets, net, ending balance | 150,401 | 150,401 | ||
Trademark Pokemoto [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 152,862 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (17,347) | |||
Intangible assets, net, ending balance | 135,515 | 135,515 | ||
Franchisee License Pokemoto [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 2,599,473 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (137,534) | |||
Intangible assets, net, ending balance | 2,461,939 | 2,461,939 | ||
Proprietary Recipes Pokemoto [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 1,027,916 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (79,988) | |||
Intangible assets, net, ending balance | 947,928 | 947,928 | ||
Non-Compete Agreement Pokemoto [Member] | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net, beginning balance | 328,110 | |||
Acquisitions | ||||
Impairment of intangible assets | ||||
Amortization expense | (119,014) | |||
Intangible assets, net, ending balance | $ 209,096 | $ 209,096 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Jun. 30, 2022 USD ($) |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | $ 1,398,594 |
2024 | 1,169,745 |
2025 | 849,331 |
2026 | 564,888 |
2027 | 465,430 |
Thereafter | 1,230,601 |
Total | 5,678,589 |
Trademark Muscle Maker Grill [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 508,551 |
2024 | 509,944 |
2025 | 254,972 |
2026 | |
2027 | |
Thereafter | |
Total | 1,273,467 |
Franchise Agreements [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 26,780 |
2024 | 26,853 |
2025 | 26,780 |
2026 | 26,780 |
2027 | 26,780 |
Thereafter | 15,186 |
Total | 149,159 |
Trademark SuperFit [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 8,995 |
2024 | 9,020 |
2025 | 8,995 |
2026 | 6,604 |
2027 | |
Thereafter | |
Total | 33,614 |
Domain Name SuperFit [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 24,986 |
2024 | 25,055 |
2025 | 24,986 |
2026 | 18,347 |
2027 | |
Thereafter | |
Total | 93,374 |
Customer List SuperFit [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 27,985 |
2024 | 28,061 |
2025 | 27,985 |
2026 | 20,547 |
2027 | |
Thereafter | |
Total | 104,578 |
Proprietary Recipes SuperFit [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 31,982 |
2024 | 32,070 |
2025 | 31,982 |
2026 | 23,484 |
2027 | |
Thereafter | |
Total | 119,518 |
Non-Compete Agreement SuperFit [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 86,588 |
2024 | 63,813 |
2025 | |
2026 | |
2027 | |
Thereafter | |
Total | 150,401 |
Trademark Pokemoto [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 34,981 |
2024 | 35,077 |
2025 | 34,981 |
2026 | 30,476 |
2027 | |
Thereafter | |
Total | 135,515 |
Franchisee License Pokemoto [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 277,348 |
2024 | 278,108 |
2025 | 277,348 |
2026 | 277,348 |
2027 | 277,348 |
Thereafter | 1,074,439 |
Total | 2,461,939 |
Proprietary Recipes Pokemoto [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 161,302 |
2024 | 161,744 |
2025 | 161,302 |
2026 | 161,302 |
2027 | 161,302 |
Thereafter | 140,974 |
Total | 947,928 |
Non-Compete Agreement Pokemoto [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 209,096 |
2024 | |
2025 | |
2026 | |
2027 | |
Thereafter | |
Total | $ 209,096 |
SCHEDULE OF GOODWILL ASSETS (De
SCHEDULE OF GOODWILL ASSETS (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill, net, beginning balance | $ 2,626,399 |
Impairment of goodwill | |
Goodwill, net, ending balance | 2,626,399 |
Muscle Maker Grill [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill, net, beginning balance | 570,000 |
Impairment of goodwill | |
Goodwill, net, ending balance | 570,000 |
Pokemoto [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill, net, beginning balance | 1,798,399 |
Impairment of goodwill | |
Goodwill, net, ending balance | 1,798,399 |
SuperFit Food [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill, net, beginning balance | 258,000 |
Impairment of goodwill | |
Goodwill, net, ending balance | $ 258,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 356,395 | $ 149,403 | $ 708,875 | $ 165,009 |
SCHEDULE OF ACCOUNTS PAYABLES A
SCHEDULE OF ACCOUNTS PAYABLES AND ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 1,003,900 | $ 734,688 | |
Accrued payroll | 157,122 | 758,732 | |
Accrued professional fees | 86,361 | 185,872 | |
Accrued board members fees | 28,496 | 57,573 | |
Accrued rent expense | 218,112 | 176,727 | |
Accrued compensation expense | 36,600 | ||
Sales taxes payable | [1] | 56,184 | 125,550 |
Accrued interest | 28,426 | ||
Other accrued expenses | 47,000 | 104,355 | |
Total Accounts Payable and Accrued Expenses | $ 1,597,175 | $ 2,208,523 | |
[1]See Note 14 – Commitments and Contingencies –Taxes for detailed related to delinquent sales taxes. |
CONVERTIBLE NOTE PAYABLE TO F_2
CONVERTIBLE NOTE PAYABLE TO FORMER PARENT (Details Narrative) - USD ($) | Apr. 11, 2018 | Jun. 30, 2022 | Dec. 31, 2021 | Apr. 06, 2018 |
Short-Term Debt [Line Items] | ||||
Convertible note payable | $ 82,458 | $ 82,458 | ||
2018 ARH Note [Member] | Former Parent [Member] | ||||
Short-Term Debt [Line Items] | ||||
Debt principal amount | $ 475,000 | |||
Conversion price per share | $ 3.50 | |||
Debt conversion, converted instrument, amount | $ 392,542 | |||
Debt conversion, converted instrument, shares issued | 112,154 |
SCHEDULE OF MATURITIES OF OTHER
SCHEDULE OF MATURITIES OF OTHER NOTES PAYABLE (Details) | Jun. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
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 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 21, 2021 | May 09, 2020 | Oct. 10, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Apr. 24, 2022 | |
Short-Term Debt [Line Items] | |||||||||
Convertible notes payable | $ 100,000 | ||||||||
Gain on debt extinguishment | $ 875,974 | $ 141,279 | $ 875,974 | ||||||
Repayments of convertible debt | 63,456 | 1,221,071 | |||||||
Pokemoto Acquisition [Member] | Economic Injury Disaster Loans [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Proceeds from loan | $ 1,171,400 | ||||||||
Paycheck Protection Program [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Proceeds from loan | $ 866,300 | ||||||||
Convertible Note Payable [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Convertible notes payable | 50,000 | 50,000 | 100,000 | ||||||
Promissory Note [Member] | Former Franchisee [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Proceeds from promissory notes | $ 300,000 | ||||||||
Interest rate | 8% | ||||||||
Debt instrument, term | 5 years | ||||||||
PPP Loan [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt forgiveness | $ 875,974 | ||||||||
Debt forgiveness, principal amount | 866,300 | ||||||||
Debt forgiveness, debt interest | 9,674 | ||||||||
Gain on debt extinguishment | $ 875,974 | ||||||||
PPP 2 Loan [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt forgiveness | $ 291,053 | ||||||||
Debt payment, principal amount | 0 | 139,877 | |||||||
Debt payment, debt interest | 0 | 1,402 | |||||||
Other Notes Payable [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Repayments of convertible debt | 63,456 | $ 1,221,071 | |||||||
Notes payable | $ 965,344 | $ 965,344 | |||||||
Other Notes Payable [Member] | Minimum [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Interest rate | 1% | 1% | |||||||
Other Notes Payable [Member] | Maximum [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Interest rate | 8% | 8% |
SCHEDULE OF OPERATING LEASE ASS
SCHEDULE OF OPERATING LEASE ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Total lease assets | $ 2,536,932 | |
Liabilities | ||
Operating leases | 561,623 | |
Operating leases | 2,129,600 | |
Total Lease liabilities | $ 2,691,223 |
SCHEDULE OF OPERATING LEASE LIA
SCHEDULE OF OPERATING LEASE LIABILITY MATURITY (Details) | Jun. 30, 2022 USD ($) |
Leases [Abstract] | |
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) |
Total Lease liabilities | $ 2,691,223 |
SCHEDULE OF LEASE TERM AND DISC
SCHEDULE OF LEASE TERM AND DISCOUNT RATE (Details) | Jun. 30, 2022 |
Leases [Abstract] | |
Weighted-average remaining operating lease term (in year) | 5 years 2 months 12 days |
Weighted-average operating leases discount rate | 12% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jan. 02, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | |
Leases [Abstract] | |||
Operating lease, description | 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. | ||
Operating lease cost | $ 242,263 | $ 483,851 |
SCHEDULE OF DEFERRED REVENUE (D
SCHEDULE OF DEFERRED REVENUE (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenues, net | $ 1,291,668 | $ 1,063,373 |
Less: Deferred revenues, current | (83,114) | (49,728) |
Deferred revenues, non-current | $ 1,208,524 | $ 1,013,645 |
SCHEDULE OF OTHER CURRENT LIABI
SCHEDULE OF OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Other current liabilities | $ 195,429 | $ 286,088 |
Gift Card Liability [Member] | ||
Other current liabilities | 27,999 | 27,633 |
Co-op Advertising Fund Liability [Member] | ||
Other current liabilities | 69,185 | 126,564 |
Advertising Fund Liability [Member] | ||
Other current liabilities | $ 98,245 | $ 131,891 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||||||
Jun. 30, 2022 | Apr. 24, 2022 | Apr. 04, 2022 | Feb. 10, 2022 | Feb. 09, 2022 | Jan. 02, 2022 | May 01, 2020 | Jan. 23, 2020 | Mar. 07, 2019 | Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Feb. 01, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Repayment of debt | $ 110,000 | |||||||||||||
Convertible Notes Payable | 100,000 | |||||||||||||
Payments of fees | $ 171,035 | |||||||||||||
Debt payment | $ 10,000 | |||||||||||||
Number of shares issued | 30,910 | 20,000 | ||||||||||||
Shares issued price per share | $ 1 | |||||||||||||
Sales Taxes [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Accrued for sales tax payable includes interest payable, amount | $ 56,184 | $ 56,184 | 56,184 | $ 125,550 | ||||||||||
Note Holder [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Convertible Notes Payable | $ 50,000 | 50,000 | 50,000 | |||||||||||
Chief Financial Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 190,000 | |||||||||||||
Shares issued to acquire common stock | 20,000 | |||||||||||||
Chief Executive Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 350,000 | |||||||||||||
Options to recieve common stock | 100,000 | |||||||||||||
Stock option vesting term | 5 years | |||||||||||||
Chief Executive Officer [Member] | One Year Anniversary [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 375,000 | |||||||||||||
Chief Investment Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 200,000 | |||||||||||||
Options to recieve common stock | 75,000 | |||||||||||||
Stock option vesting term | 5 years | |||||||||||||
Salary Percentage | 75% | |||||||||||||
Chief Operating Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 275,000 | |||||||||||||
Options to recieve common stock | 50,000 | |||||||||||||
Stock option vesting term | 5 years | |||||||||||||
Salary Percentage | 75% | |||||||||||||
Chief Marketing Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 175,000 | |||||||||||||
Options to recieve common stock | 42,500 | |||||||||||||
Stock option vesting term | 5 years | |||||||||||||
Salary Percentage | 25% | |||||||||||||
Chief Accounting Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Base salary | $ 175,000 | |||||||||||||
Options to recieve common stock | 25,000 | |||||||||||||
Stock option vesting term | 5 years | |||||||||||||
Salary Percentage | 25% | |||||||||||||
Seven Installment [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Debt payment | $ 40,000 | |||||||||||||
Restricted Stock Units (RSUs) [Member] | Chief Financial Officer [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Number of shares issued | 20,000 | |||||||||||||
Franchise Agreement [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Deferred Revenue | $ 52,500 | $ 292,500 | ||||||||||||
Litigations, Claims and Assessments [Member] | ||||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||||
Loss contingency, damages sought, value | $ 32,809 | |||||||||||||
Accounts payable and accrued liabilities | $ 30,000 | |||||||||||||
Litigation Settlement, Amount Awarded to Other Party | $ 130,185 |
SUMMARY OF OPERATING SEGMENTS (
SUMMARY OF OPERATING SEGMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 2,929,384 | $ 2,704,856 | $ 5,849,842 | $ 4,004,539 | |
Operating Loss | (1,738,420) | (2,325,698) | (3,725,393) | (6,025,836) | |
Gain in debt extinguishment | 875,974 | 141,279 | 875,974 | ||
Interest expense, net | (14,468) | (22,596) | (28,437) | (36,770) | |
Other non-operating income (expense) | (9,945) | 351,181 | (33,889) | 353,809 | |
Loss before income taxes | (1,762,833) | (1,121,139) | (3,646,440) | (4,832,823) | |
Muscle Maker Grill Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,140,721 | 1,436,779 | 2,412,657 | 2,600,455 | |
Operating Loss | (134,654) | (124,997) | (438,369) | (472,765) | |
Pokemoto Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,313,737 | 571,026 | 2,472,672 | 579,878 | |
Operating Loss | 36,327 | 141,755 | 58,119 | 88,908 | |
Non-Traditional (Hybrid) Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 100,042 | 152,515 | 228,743 | 279,671 | |
Operating Loss | (224,781) | (187,409) | (269,439) | (482,496) | |
Super Fit Foods Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 374,884 | 544,536 | 735,770 | 544,535 | |
Operating Loss | 67,940 | (11,641) | 84,504 | (33,835) | |
Corporate and Unallocated Expenses [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Loss | [1] | (1,126,857) | (1,994,003) | (2,451,334) | (4,960,639) |
Unallocated Operating Other Income Expense [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Loss | [2] | $ (356,395) | $ (149,403) | $ (708,874) | $ (165,009) |
[1]Includes charges related to corporate expense that the Company does not allocate to the respective divisions. For the three months ended June 30, 2022 and 2021, largest portion of this expense relates to payroll, benefits and other compensation expense of $ 752,416 618,482 143,136 1,146,072 55,005 44,849 1,532,134 1,826,218 241,099 1,577,237 63,650 1,082,549 |
SUMMARY OF OPERATING SEGMENTS_2
SUMMARY OF OPERATING SEGMENTS (Details) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Other compensation expense | $ 752,416 | $ 618,482 | $ 1,532,134 | $ 1,826,218 |
Professional fees | 143,136 | 1,146,072 | 241,099 | 1,577,237 |
Consulting fees | $ 55,005 | $ 44,849 | $ 63,650 | $ 1,082,549 |
SCHEDULE OF OPTION ACTIVITY (De
SCHEDULE OF OPTION ACTIVITY (Details) - Share-Based Payment Arrangement, Option [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Options, Outstanding Beginning | 100,000 | |
Number of Options, Weighted Average Exercise Price, Outstanding Beginning | $ 5 | |
Number of Options, Weighted Average Remaining Life In Years, Outstanding Ending | 4 years 14 days | 1 year 11 months 1 day |
Number of Options, Issued | 312,500 | |
Number of Options, Weighted Average Exercise Price, Issued | $ 0.41 | |
Number of Options, Exercised | ||
Number of Options, Weighted Average Exercise Price, Exercised | ||
Number of Options, Weighted Average Exercise Price, Forfeited | ||
Number of Options, Outstanding Ending | 412,500 | 100,000 |
Number of Options, Weighted Average Exercise Price, Outstanding Ending | $ 1.21 | $ 5 |
Number of Options, Exercisable | 115,625 | |
Number of Options, Weighted Average Exercise Price, Exercisable | $ 4.38 | |
Number of Options, Weighted Average Remaining Life In Years, Exercisable | 1 year 10 months 20 days |
SCHEDULE OF WARRANTS ACTIVITY (
SCHEDULE OF WARRANTS ACTIVITY (Details) - Warrant [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Number of Warrants, Outstanding Beginning | 20,284,016 | |
Weighted Average Exercise Price, Outstanding Beginning | $ 1.66 | |
Weighted Average Remaining Life In Years, Outstanding Ending | 4 years 10 days | 3 years 11 months 26 days |
Number of Warrants, Issued | ||
Weighted Average Exercise Price, Issued | ||
Number of Warrants, Exercised | (2,410,110) | |
Weighted Average Exercise Price, Exercised | $ 0.01 | |
Number of Warrants, Forfeited | ||
Weighted Average Exercise Price, Forfeited | ||
Number of Warrants, Outstanding Ending | 17,873,906 | 20,284,016 |
Weighted Average Exercise Price, Outstanding Ending | $ 1.89 | $ 1.66 |
Number of Warrants, Exercisable | 17,873,906 | |
Weighted Average Exercise Price, Exercisable | $ 1.89 | |
Weighted Average Remaining Life In Years, Exercisable | 4 years 10 days |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||||||
Jul. 08, 2022 | Jun. 30, 2022 | May 03, 2022 | Apr. 04, 2022 | Mar. 31, 2022 | Feb. 24, 2022 | Jan. 18, 2022 | Jan. 06, 2022 | Jan. 03, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Shares issued of common stock | 30,910 | 20,000 | ||||||||||||
Value of shares issued for acquisition | $ 1,250,000 | $ 625,000 | ||||||||||||
Share based compensation | $ 89,086 | $ 1,727,545 | ||||||||||||
Employement Agreement [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Shares issued to purchase common stock | 312,500 | |||||||||||||
Stock option exercise price | $ 0.41 | |||||||||||||
Board of Directors [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Shares issued for compensation | 53,961 | 39,573 | ||||||||||||
Consultant [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Shares issued for acquisition | 30,000 | |||||||||||||
Value of shares issued for acquisition | $ 15,600 | |||||||||||||
Contractor [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Shares issued of common stock | 5,000 | |||||||||||||
Pre-Funded Warrant [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Shares issued of common stock | 1,209,604 | 1,200,000 | ||||||||||||
Warrants exercised | $ 1,210,110 | $ 1,200,215 | ||||||||||||
Warrant [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Share based compensation | $ 44,996 | 14,700 | 117,582 | 1,727,545 | ||||||||||
Warrant [Member] | General and Administrative Expense [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Share based compensation | 44,996 | 14,700 | 117,334 | 1,727,297 | ||||||||||
Warrant [Member] | Operating Expense [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Share based compensation | $ 0 | $ 0 | $ 248 | $ 248 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 29, 2022 | Jul. 14, 2022 | Jul. 07, 2022 | Mar. 31, 2022 | Jan. 06, 2022 | Jan. 02, 2022 | Aug. 31, 2022 |
Subsequent Event [Line Items] | |||||||
Lease term description | 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. | ||||||
Board of Directors [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued for compensation | 53,961 | 39,573 | |||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Lease term description | August 1, 2022, through Augusts 31, 2024 | ||||||
Rent payments | $ 1,815 | ||||||
Security deposits | $ 3,850 | ||||||
Lease term | 5 years | ||||||
Subsequent Event [Member] | Board of Directors [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Shares issued for compensation | 72,091 | ||||||
Subsequent Event [Member] | Mr. Groenewald [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Number of forfeiture shares, unvested stock options | 23,750 | ||||||
Number of forfeiture shares, vested stock options | 1,250 |