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ACQUISITIONS

9 Months Ended

Sep. 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. The purchase price was 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. 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 decrease in estimated goodwill due to the Company having no further obligation to issue the $25,000 shares of common stock as mentioned above.

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 3 – ACQUISITIONS, continued

SuperFit Foods Acquisition, continued

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 Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Revenues		$	2,823,559			$	3,301,679			$	8,673,401			$	7,876,672
Restaurant operating expenses			2,710,547				3,390,442				8,834,772				8,508,874
Total cost and expenses			4,785,269				4,921,156				14,360,505				15,487,578
Loss from Operations			(1,961,710	)			(1,619,477	)			(5,687,104	)			(7,610,906	)

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”).

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 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.

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.

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 3 – ACQUISITIONS, continued

Pokemoto Acquisition, continued

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 2022:

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
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

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

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

Pokemoto Acquisition, continued

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 Nine Months Ended
		September 30,								September 30,
		2022				2021				2022				2021
Revenues		$	2,823,559			$	3,301,679			$	8,673,401			$	8,666,004
Restaurant operating expenses			2,710,547				3,390,442				8,834,772				8,919,110
Total cost and expenses			4,785,269				4,921,156				14,360,505				16,170,438
Loss from Operations			(1,961,710	)			(1,619,477	)			(5,687,104	)			(7,504,434	)

X

- References

No definition available.

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X

- 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 https://asc.fasb.org/topic&trid=2303972

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472

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