PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the company's unaudited condensed consolidated financial statements as of June 30, 2022 [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to $27.7 million while total liabilities increased, resulting in lower stockholders' equity Condensed Consolidated Balance Sheet Data (Unaudited) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $13,465,538 | $15,766,703 | | Total Current Assets | $14,627,642 | $17,969,983 | | Goodwill | $2,626,399 | $2,626,399 | | Intangible assets, net | $5,678,589 | $6,387,464 | | **Total Assets** | **$27,672,627** | **$29,431,883** | | **Liabilities & Equity** | | | | Total Current Liabilities | $2,696,913 | $2,928,649 | | Total Liabilities | $6,873,296 | $5,038,616 | | Accumulated deficit | $(75,052,859) | $(71,369,837) | | **Total Stockholders' Equity** | **$20,799,331** | **$24,393,267** | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Revenues grew 46% to $5.85 million in H1 2022, though the Q2 net loss widened due to prior-year gains Q2 2022 vs Q2 2021 Operating Results (Unaudited) | Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Total Revenues | $2,929,384 | $2,704,856 | | Loss from Operations | $(1,738,420) | $(2,325,698) | | Net Loss | $(1,774,144) | $(1,122,201) | | Net Loss Per Share (Basic & Diluted) | $(0.06) | $(0.16) | Six Months Ended June 30, 2022 vs 2021 Operating Results (Unaudited) | Metric | H1 2022 | H1 2021 | | :--- | :--- | :--- | | Total Revenues | $5,849,842 | $4,004,539 | | Loss from Operations | $(3,725,393) | $(6,025,836) | | Net Loss | $(3,660,223) | $(4,833,885) | | Net Loss Per Share (Basic & Diluted) | $(0.13) | $(0.70) | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATMENTS%20OF%20CHANGES%20IN%20SHOCKHOLDERS'%20EQUITY) Stockholders' equity declined to $20.8 million, primarily driven by a net loss of $3.7 million for the period - The accumulated deficit increased from **$(71,369,837)** at the end of 2021 to **$(75,052,859)** as of June 30, 2022, reflecting ongoing net losses[13](index=13&type=chunk) - During the first six months of 2022, the company issued **2,409,604 shares** from the cashless exercise of pre-funded warrants and for other compensation purposes[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=UNAUDITED%20CONDENSED%20COLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash decreased by $2.3 million during H1 2022, driven by operating and investing activities Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(1,905,110) | $(3,700,395) | | Net Cash Used in Investing Activities | $(282,599) | $(3,412,847) | | Net Cash (Used in) Provided by Financing Activities | $(113,456) | $7,888,931 | | **Net (Decrease) Increase in Cash** | **$(2,301,165)** | **$775,689** | | **Cash - End of Period** | **$13,465,538** | **$4,971,621** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) The notes detail key accounting policies, segment operations, recent acquisitions, and regulatory matters - The company operates four segments: Muscle Maker Grill, Pokemoto Hawaiian Poke, Non-Traditional (Hybrid), and SuperFit Foods Meal Prep[26](index=26&type=chunk) - In 2021, the company acquired **SuperFit Foods** and **Pokemoto**, which are key drivers of current revenue growth[23](index=23&type=chunk)[24](index=24&type=chunk) - The company adopted lease accounting standard **Topic 842** on January 1, 2022, recognizing **$2.5 million** in right-of-use assets and **$2.7 million** in lease liabilities[70](index=70&type=chunk)[124](index=124&type=chunk) - The company received a notice from Nasdaq for failing to meet the **$1.00 minimum bid price requirement** and has until January 30, 2023, to regain compliance[143](index=143&type=chunk)[169](index=169&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=35&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management analyzes revenue growth from acquisitions, segment performance, and liquidity amid rising costs [Overview](index=35&type=section&id=MD&A%20Overview) The company operates and franchises three 'healthier for you' concepts across four operating segments - The company's portfolio consists of three main brands: Muscle Maker Grill, SuperFit Foods, and Pokemoto[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[178](index=178&type=chunk) - As of June 30, 2022, the company's system comprised **19 company-owned restaurants** and **18 franchise restaurants**[173](index=173&type=chunk) [Results of Operations](index=39&type=section&id=MD&A%20Results%20of%20Operations) H1 2022 revenue grew 46% to $5.8 million, with a narrowed operating loss despite higher food costs - Q2 2022 revenue increased by **$224,528** year-over-year, primarily due to sales from the acquired Pokemoto restaurants[198](index=198&type=chunk)[199](index=199&type=chunk) - Food and beverage costs rose to **40.6% of restaurant sales** in Q2 2022 from 34.7% in Q2 2021, attributed to inflationary pressures[203](index=203&type=chunk) - For the six months ended June 30, 2022, revenue increased by **$1.8 million (46%)** year-over-year, mainly from acquisitions[214](index=214&type=chunk)[215](index=215&type=chunk) - SG&A expenses for H1 2022 decreased by **$2.5 million** compared to 2021, primarily due to lower professional and consulting fees[225](index=225&type=chunk) [Segment Performance](index=45&type=section&id=MD&A%20Segment%20Performance) The Pokemoto and SuperFit Foods segments were profitable, partially offsetting losses in other segments Segment Operating (Loss) Income for Six Months Ended June 30, 2022 | Segment | Revenue | Operating (Loss) Income | | :--- | :--- | :--- | | Muscle Maker Grill Division | $2,412,657 | $(438,369) | | Pokemoto Division | $2,472,672 | $58,119 | | Non-Traditional (Hybrid) Division | $228,743 | $(269,439) | | SuperFit Foods Division | $735,770 | $84,504 | | Unallocated Corporate | N/A | $(3,160,208) | | **Total** | **$5,849,842** | **$(3,725,393)** | [Liquidity and Capital Resources](index=48&type=section&id=MD&A%20Liquidity%20and%20Capital%20Resources) The company maintains $13.5 million in cash, which management deems sufficient for the next 12 months Liquidity Metrics | Metric | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash | $13,465,538 | $15,766,703 | | Working Capital Surplus | $11,930,729 | $15,041,334 | - The company has an accumulated deficit of **$75,052,859** and used **$1,905,110** of cash in operating activities during H1 2022[242](index=242&type=chunk) - Management believes current cash is sufficient for the next twelve months but may need to raise additional capital[242](index=242&type=chunk)[243](index=243&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This disclosure is not applicable as the company is a smaller reporting company - The company has indicated that this item is not applicable[270](index=270&type=chunk) [Controls and Procedures](index=54&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2022 - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were **effective**[271](index=271&type=chunk) - **No material changes** to internal control over financial reporting were identified during the six months ended June 30, 2022[272](index=272&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=55&type=section&id=ITEM%201.%20LEGAL%20PROCEEDING) The company discloses several legal matters, including settlements and accrued liabilities - The company entered an agreement to repay a **$110,000** default judgment, with **$50,000** remaining accrued as of June 30, 2022[277](index=277&type=chunk) - The company has accrued for liabilities related to a contractor lawsuit (**$30,000**) and a judgment for a lease breach (**$130,185**)[278](index=278&type=chunk)[279](index=279&type=chunk) - Past due sales taxes from 2017 and 2018 have been **paid in full**, and the company is current on payments since January 1, 2018[280](index=280&type=chunk) [Risk Factors](index=55&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to the company's 2021 Annual Report for a discussion of risk factors - The company states this item is not applicable and refers to its **2021 Form 10-K** for risk factors[281](index=281&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=ITEM%202.%20UNGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company details unregistered issuances of common stock for warrant exercises and compensation - In January and February 2022, the company issued a total of **2,409,604 shares** of common stock upon the cashless exercise of pre-funded warrants[282](index=282&type=chunk)[285](index=285&type=chunk) - Shares were issued to board members and an executive team member as compensation[283](index=283&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) [Defaults Upon Senior Securities](index=56&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reports no defaults upon senior securities during the period - None reported[289](index=289&type=chunk) [Mine Safety Disclosures](index=56&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This disclosure is not applicable to the company's operations - Not applicable[290](index=290&type=chunk) [Other Information](index=56&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other material information was reported for the period [Exhibits](index=56&type=section&id=ITEM%206%20EXHIBITS) This section lists all exhibits filed with the report, including required certifications - Exhibits filed include CEO and CFO certifications and Inline XBRL documents[291](index=291&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Commission file number: 001-39223 Muscle Maker, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) Nevada 47-2555533 2600 South Shore Blvd., Suite 300, League City, Texas 77573 (Address of principal executive offices) Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ende ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39223 Muscle Maker, Inc. (Exact name of registrant as specified in its charter) Nevada 47-2555533 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 260 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39223 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) Nevada 47-2555533 (State or Other Jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39223 MUSCLE MAKER, INC. Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Na ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2021 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39223 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) Nevada 47-2555533 (State or Other Jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2020 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Muscle Maker, INC. Nevada 001-39223 47-2555533 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File No.) Identification No.) 2600 South Shore Blvd., Suite 300, League City, Texas ( ...

PART 1 – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements.) Unaudited financial statements for September 30, 2020, reflect increased assets and equity from financing, but continued net losses and a going concern warning [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights | Balance Sheet Highlights | Sep 30, 2020 (unaudited) | Dec 31, 2019 | | :--- | :--- | :--- | | Cash | $6,063,811 | $478,854 | | Total Current Assets | $6,453,677 | $780,529 | | Total Assets | $12,117,088 | $6,260,710 | | Total Current Liabilities | $3,394,253 | $4,488,070 | | Total Liabilities | $5,066,836 | $6,014,948 | | Total Stockholders' Equity | $7,050,252 | $245,762 | - The company's financial position improved significantly as of September 30, 2020, compared to year-end 2019, with cash increasing by over **$5.5 million** and total stockholders' equity turning positive from a surplus of **$245,762** to over **$7 million**, primarily driven by capital raised from stock offerings[11](index=11&type=chunk)[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Income Statement Highlights (unaudited) | Income Statement Highlights (unaudited) | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,152,545 | $1,113,458 | $3,400,690 | $3,681,248 | | Loss from Operations | ($736,592) | ($1,396,092) | ($7,487,081) | ($2,770,390) | | Net Loss | ($662,080) | ($2,348,829) | ($7,655,768) | ($5,374,914) | | Net Loss Per Share (Basic and Diluted) | ($0.09) | ($1.56) | ($1.06) | ($3.59) | - For the nine months ended September 30, 2020, the net loss widened to **$7.66 million** from **$5.37 million** in the prior year, driven by a significant increase in general and administrative expenses, which rose from **$3.58 million** to **$6.80 million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Highlights (unaudited) | Cash Flow Highlights (unaudited) | For the Nine Months Ended Sep 30, 2020 | For the Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($5,462,173) | ($3,296,114) | | Net Cash Used in Investing Activities | ($559,924) | ($932,422) | | Net Cash Provided by Financing Activities | $11,607,054 | $5,854,000 | | Net Increase in Cash | $5,584,957 | $1,625,464 | - The company's cash balance increased significantly due to financing activities, which provided **$11.6 million** in cash, including **$11.72 million** from stock offerings and **$866,300** from a PPP loan, offsetting the **$5.46 million** cash burn from operations[17](index=17&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - As of September 30, 2020, the company operated fifteen company-owned restaurants and eighteen franchise restaurants, with three company-owned locations being delivery-only[25](index=25&type=chunk) - The COVID-19 pandemic negatively impacted operations, leading to temporary store closures, limited hours, royalty relief for franchisees, and deferred executive salaries, with the full magnitude and duration of the impact remaining uncertain[27](index=27&type=chunk) - The financial statements were prepared with a going concern warning, citing a significant accumulated deficit of **$60.75 million** and a pre-tax net loss of **$7.66 million** for the nine months ended September 30, 2020, indicating substantial doubt about the company's ability to continue operations for at least one year[29](index=29&type=chunk) - The company recognized an impairment charge of **$100,000** on its franchise agreement intangible assets during the third quarter of 2020 due to failed recoverability tests based on projected future cash flows[81](index=81&type=chunk) - Subsequent to the quarter end, the company acquired two franchisee stores in New York and Pennsylvania, opened a new delivery-only location, and closed a public offering over-allotment for net proceeds of **$764,399**[139](index=139&type=chunk)[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q3 2020 revenue growth and widened nine-month operating losses due to increased G&A, noting improved liquidity from public offerings but reiterating going concern risks [Consolidated Results of Operations](index=37&type=section&id=Consolidated%20Results%20of%20Operations) Three Months Ended Sep 30, 2020 vs 2019 | Metric | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,152,545 | $1,113,458 | +$39,087 | | Loss from Operations | ($736,592) | ($1,396,092) | +$659,500 | | Net Loss | ($662,080) | ($2,348,829) | +$1,686,749 | - The decrease in Q3 2020 net loss was primarily due to a **$1.06 million** reduction in G&A expenses, largely from the reversal of stock-based compensation, and a **$1.03 million** positive swing in 'Other Income (Expense), Net' due to lower interest expense and amortization of debt discounts compared to the prior year[180](index=180&type=chunk)[182](index=182&type=chunk) Nine Months Ended Sep 30, 2020 vs 2019 | Metric | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $3,400,690 | $3,681,248 | -$280,558 | | Loss from Operations | ($7,487,081) | ($2,770,390) | -$4,716,691 | | Net Loss | ($7,655,768) | ($5,374,914) | -$2,280,854 | - For the nine-month period, the operating loss increased by **$4.7 million**, driven by a **$3.2 million** increase in G&A expenses, attributed to higher salaries and bonuses (~**$500k**), increased consulting expenses mainly from stock-based compensation (~**$2.1M**), and one-time professional fees related to offerings (~**$408k**)[198](index=198&type=chunk)[199](index=199&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Metric | Liquidity Metric | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | Cash | $6,063,811 | $478,854 | | Working Capital | $3,062,692 (Surplus) | ($3,707,541) (Deficiency) | - The company's liquidity position improved significantly, moving from a working capital deficiency to a surplus, primarily due to capital raised from public offerings and a PPP loan[203](index=203&type=chunk)[205](index=205&type=chunk) - Despite the improved cash position, management states there is substantial doubt about the company's ability to continue as a going concern due to an accumulated deficit of **$60.75 million** and cash used in operations of **$5.46 million** for the nine-month period[204](index=204&type=chunk) - On May 9, 2020, the company received a PPP Loan of **$866,300** under the CARES Act, and while the company has applied for forgiveness, there is no assurance it will be granted in whole or in part[207](index=207&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section is not applicable to the company for this reporting period - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable[238](index=238&type=chunk) [Controls and Procedures](index=48&type=section&id=ITEM%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2020, due to ongoing material weaknesses in internal control over financial reporting, with no material changes made during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were not effective as of September 30, 2020[240](index=240&type=chunk) - The ineffectiveness is due to ongoing material weaknesses, which include: lack of written documentation of internal control policies, insufficient resources and segregation of duties in the accounting function, inadequate controls for timely communication of financial information, and deficiencies in IT controls related to data center operations, access security, and change management[241](index=241&type=chunk) - No changes were made during the quarter ended September 30, 2020, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[243](index=243&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=50&type=section&id=ITEM%201.%20Legal%20Proceedings.) The company is involved in various legal proceedings, including a settled rent dispute, an outstanding default judgment for a convertible note, and accrued liabilities for liens, contract breaches, and unpaid taxes - A settlement agreement with Crownhall and Limestone regarding **$2.39 million** in past damages for rent has been paid in full[250](index=250&type=chunk) - A default judgment was entered against the company for **$171,035** related to a convertible note; as of September 30, 2020, a liability of **$100,000** plus accrued interest of **$22,039** remains[251](index=251&type=chunk) - The company has accrued for various other liabilities, including **$98,005** for mechanics liens, **$30,000** for a contractor dispute, and **$130,185** for a lease breach judgment[252](index=252&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - The company has accrued **$248,721** as of September 30, 2020, for past-due state and local sales taxes, including penalties and interest[257](index=257&type=chunk) [Risk Factors](index=51&type=section&id=ITEM%201A.%20Risk%20Factors.) The ongoing COVID-19 pandemic is a significant risk, negatively impacting business operations through closures, reduced capacity, and financial adjustments, with its full impact remaining uncertain - The COVID-19 pandemic is identified as a significant risk that has adversely affected business, financial condition, and results of operations[260](index=260&type=chunk) - Specific impacts from the pandemic include: limiting hours of operation and reducing capacity, temporarily closing five company-owned locations during Q2 2020, providing royalty relief to franchisees through July 2020, and executive team deferring a portion of their salaries[261](index=261&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company issued unregistered equity securities, including common stock and options, primarily for services to consultants and board members, notably settling a dispute by issuing **300,000** shares, all exempt from registration - The company issued **300,000** shares of common stock to a consultant as part of a settlement agreement after a previous issuance of stock and warrants was rescinded due to not having enough equity authorized under the 2019 Incentive Stock Plan[262](index=262&type=chunk) - Various issuances of common stock were made to consultants and board of directors for services, including **10,000** shares for investor relations, **51,105** shares for accrued interest, and **53,571** shares to various consultants[262](index=262&type=chunk)[264](index=264&type=chunk)[266](index=266&type=chunk) - The company agreed to issue **200,000** non-qualified stock options to a consultant for investor outreach services, exercisable at **$2.50** per share, upon shareholder approval of the 2020 Incentive Stock Plan[263](index=263&type=chunk) [Defaults Upon Senior Securities](index=54&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities during the period - None reported[268](index=268&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This section is not applicable to the company - Not applicable[269](index=269&type=chunk) [Other Information](index=54&type=section&id=ITEM%205.%20Other%20Information.) The company disclosed settling a consultant dispute by issuing **300,000** shares and **100,000** options, and the executive team's cancellation of **216,783** restricted common shares - The company entered into a settlement agreement on August 11, 2020, to resolve a dispute with a consultant, agreeing to issue **300,000** shares of common stock and **100,000** stock options[270](index=270&type=chunk) - On August 11, 2020, the executive team agreed to cancel **216,783** shares of restricted common stock that had been issued in the first quarter of 2020[271](index=271&type=chunk) [Exhibits](index=55&type=section&id=ITEM%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including the certificate of amendment to the Articles of Incorporation, CEO and CFO certifications, and XBRL data files

Revenue Performance - Total revenues for the three months ended June 30, 2020, were $834,686, a 39% decrease from $1,383,416 in the same period of 2019, primarily due to a decline in franchise royalties and temporary closures of corporate stores due to Covid-19 [154]. - Total revenues for the six months ended June 30, 2020, were $2,269,740, a decrease of 11.61% from $2,567,790 in the same period of 2019 [172]. - Restaurant sales, net of discounts, increased by $280,766, or 17.4%, to $1,897,366 for the six months ended June 30, 2020, compared to $1,616,600 in 2019 [173]. - Retail store revenues for the six months ended June 30, 2020 were $1,897,366, compared to $1,616,600 in 2019, indicating a growth of approximately 17.4% [207]. Franchise Performance - Franchise royalties and fees decreased to $142,293 for the three months ended June 30, 2020, from $529,085 in 2019, a decline of $386,792 attributed to fewer franchisee locations and lower sales volumes [156]. - Franchise royalties and fees decreased by $555,473 to $318,324 for the six months ended June 30, 2020, primarily due to fewer franchisee locations and lower sales [174]. - Franchise revenue from royalties for the six months ended June 30, 2020 was $173,779, down from $398,360 in 2019, representing a decline of approximately 56.3% [209]. - Franchise fee revenues for the six months ended June 30, 2020 were $89,630, compared to $326,517 in 2019, reflecting a decrease of approximately 72.6% [210]. - Contributions from franchisees to the advertising fund for the six months ended June 30, 2020 were $54,050, down from $77,393 in 2019, a decline of approximately 30.2% [214]. Operating Costs and Expenses - Total operating costs and expenses increased to $9,020,229 for the six months ended June 30, 2020, from $3,942,088 in 2019, resulting in a loss from operations of $6,750,489 [184]. - General and administrative expenses rose to $1,213,851, or 145.4% of total revenues, for the three months ended June 30, 2020, compared to $966,539, or 69.9% in 2019, an increase of $247,312 [166]. - General and administrative expenses surged to $6,343,254, or 279.5% of total revenues, compared to $2,070,575, or 80.6% of total revenues in 2019 [183]. Profitability and Losses - Loss from operations for the three months ended June 30, 2020, was $1,393,936, or 167% of total revenues, compared to a loss of $561,102, or 40.6% in 2019, reflecting an increase of $832,834 [167]. - Net loss for the three months ended June 30, 2020, was $1,501,425, a decrease of $41,181 from $1,542,606 in the same period of 2019, primarily due to a decrease in other expenses [169]. - Net loss for the six months ended June 30, 2020, increased by $3,967,603 to $6,993,688, compared to a net loss of $3,026,085 in 2019 [186]. Cash Flow and Financing - Cash balance as of June 30, 2020, was $3,161,195, up from $478,854 at the end of 2019 [187]. - The company utilized $3,834,131 of cash in operating activities during the six months ended June 30, 2020, indicating a need for additional financing [188]. - Net cash used in operating activities for the six months ended June 30, 2020 was $3,834,131, compared to $2,013,398 for the same period in 2019, reflecting a net loss of $6,993,688 [196]. - Net cash provided by financing activities for the six months ended June 30, 2020 was $6,680,057, an increase from $5,354,000 in 2019, primarily due to $6,780,000 from an offering [198]. - The company received a Paycheck Protection Program loan of $866,300 on May 9, 2020, with a fixed annual interest rate of 1.00% [191]. Financial Condition - The company had an accumulated deficit of $60,088,290 as of June 30, 2020, and expects to continue incurring operating and net losses for the foreseeable future [139]. - The company has an accumulated deficit of $60,088,290 as of June 30, 2020, raising substantial doubt about its ability to continue as a going concern [188]. - The adoption of Topic 606 resulted in an adjustment of $875,902 in accumulated deficit and deferred revenues [206]. - The company has no off-balance sheet arrangements that materially affect its financial condition [221].

(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2020 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) Nevada 47-2555533 (State or Other Jurisdiction of Incorporation or Organization) 308 East Renfro St ...