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ACQUISITIONS

9 Months Ended

Sep. 30, 2021

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. The purchase price is payable as follows: $500,000 that was paid at closing, of which $25,000 was released from an escrow account held by our attorney, and $625,000 paid in 268,240 shares of common stock to be held for six months before being registered. The remaining $25,000 shall be paid in shares of common stock provided that the seller meets various obligation, within 60 days, as outline in the purchase agreement. As of September 30, 2021, the Company and former owner agreed that not all obligations were met, and we have no further obligation to issue the $25,000 shares of common stock. As of September 30, 2021, the Company has accrued for the liability in accounts payable and accrued expenses.

The Company acquired the following assets as part of the purchase agreement:

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
Goodwill			283,000
Total assets acquired		$	1,150,000

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

 SCHEDULE OF SUPPLEMENTAL PROFORMA ACQUIRED FRANCHISEE STORE

		2021				2020				2021				2020
		Pro Forma								Pro Forma
		(Unaudited)								(Unaudited)
		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Revenues		$	3,350,105			$	2,014,395			$	7,876,672			$	4,262,540
Restaurant operating expenses			3,453,244				2,010,918				8,508,874				4,378,577
Total cost and expenses			4,986,404				2,661,445				15,487,578				11,660,079
Loss from Operations			(1,636,299	)			(647,050	)			(7,610,906	)			(7,397,539	)

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 in cash and $730,000 payable in the form of a promissory note (the “Poke Note”).

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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

Poke Entities and Poke Entities II are hereinafter referred to as “Pokemoto”.

The Company acquired the following assets as part of the purchase agreement:

 SCHEDULE OF ASSETS ACQUIRED IN BUSINESS COMBINATIONS

Purchase Price		$	5,980,000
Assets
Cash		$	1,184,610
Accounts Receivables			60,208
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
		$	6,877,368
Liabilities
Accounts payable and accrued expenses		$	282,457
Other notes payable			1,462,453
Deferred revenue			123,416
Operating lease liability			751,258
		$	2,619,584
Fair value of identifiable net assets acquired			4,257,784
Goodwill		$	1,722,216

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

 SCHEDULE OF SUPPLEMENTAL PROFORMA ACQUIRED FRANCHISEE STORE

		2021				2020				2021				2020
		Pro Forma								Pro Forma
		(Unaudited)								(Unaudited)
		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Revenues		$	3,350,105			$	2,025,219			$	8,666,00			$	5,227,429
Restaurant operating expenses			3,453,244				1,855,289				8,919,110				4,940,589
Total cost and expenses			4,986,404				2,632,971				16,170,438				12,510,336
Loss from Operations			(1,636,299	)			(607,752	)			(7,504,434	)			(7,282,907	)

Combined Results

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

 SCHEDULE OF SUPPLEMENTAL PROFORMA ACQUIRED FRANCHISEE STORE

		2021				2020				2021				2020
		Pro Forma								Pro Forma
		(Unaudited)								(Unaudited)
		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
Revenues		$	3,350,105			$	2,887,069			$	9,173504			$	6,089,279
Restaurant operating expenses			3,453,244				2,627,597				9,373,883				5,712,897
Total cost and expenses			4,986,404				3,405,279				16,625,211				13,282,644
Loss from Operations			(1,636,299	)			(518,210	)			(7,451,707	)			(7,193,365	)

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

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- References

No definition available.

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- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-URI http://asc.fasb.org/topic&trid=2303972

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