Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Muscle Maker operates 38 healthy-inspired restaurants, reported a **$28.4 million net loss** in 2019, and faces a going concern warning, focusing on non-traditional expansion - The company operates **38 Muscle Maker Grill restaurants**, with **10 company-owned** and **28 franchised**, located across 15 states and Kuwait as of December 31, 2019[18](index=18&type=chunk) Financial Performance (Fiscal Years 2019 vs. 2018) | Metric | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Total Revenues | $4,959,005 | $6,022,669 | | Company-Operated Revenue | $3,466,553 | $3,869,758 | | Net Loss | ($28,385,044) | ($7,204,540) | | Negative Cash Flow (Operating) | ($4,504,226) | ($2,726,737) | | Accumulated Deficit (as of Dec 31) | ($53,094,602) | - | - The company's independent auditors issued an opinion expressing substantial doubt about its ability to continue as a going concern due to significant net losses and cash flow deficits[18](index=18&type=chunk) - The company's growth strategy includes expanding company-operated restaurants in non-traditional locations like universities and military bases, and growing its franchise base, particularly in the Northeast[26](index=26&type=chunk) - In November 2019, the company launched a new concept, 'Healthy Joe's', by converting an existing Muscle Maker Grill location, featuring a broader menu to attract a wider audience[26](index=26&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including COVID-19 disruption, a **$3.7 million working capital deficit**, and a **going concern warning** due to historical losses, alongside intense competition and execution challenges - The COVID-19 pandemic has significantly disrupted business by forcing dining room closures, modifying work hours, and pausing new restaurant construction, with the full financial impact remaining uncertain[78](index=78&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - The company has a history of significant operating losses, with a **net loss of $28.4 million in 2019** and an **accumulated deficit of $53.1 million**, leading auditors to express substantial doubt about its ability to continue as a going concern[86](index=86&type=chunk) - As of December 31, 2019, the company had a **working capital deficit of approximately $3.7 million** and requires additional capital to fund operations, despite raising **$6.78 million** in a February 2020 public offering[89](index=89&type=chunk) - The company's system is geographically concentrated, with approximately **42% of its restaurants in the Northeastern U.S.** and **34% in New Jersey and New York**, making it vulnerable to regional conditions[119](index=119&type=chunk) - Management identified material weaknesses in internal control over financial reporting, including a lack of written policies, insufficient accounting resources leading to inadequate segregation of duties, and deficient IT controls[183](index=183&type=chunk)[184](index=184&type=chunk) [Item 1B. Unresolved Staff Comments](index=40&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments - There are no unresolved staff comments[203](index=203&type=chunk) [Item 2. Properties](index=40&type=section&id=Item%202.%20Properties) The company's executive office is in Burleson, Texas, with 38 restaurants (10 company-owned, 28 franchised) across 15 states and Kuwait as of May 29, 2020, concentrated in New Jersey and New York - The company's principal executive office is located in Burleson, Texas[204](index=204&type=chunk) System-Wide Restaurant Count by Jurisdiction (as of May 29, 2020) | State/Country | Company-Owned | Franchised | Total | | :--- | :--- | :--- | :--- | | New Jersey | 1 | 7 | 8 | | New York | 3 | 2 | 5 | | Texas | 1 | 3 | 4 | | Florida | - | 3 | 3 | | California | 1 | 1 | 2 | | Georgia | 2 | - | 2 | | Illinois | - | 2 | 2 | | North Carolina | - | 2 | 2 | | Pennsylvania | - | 2 | 2 | | Kuwait | - | 2 | 2 | | Other States (6) | 2 | 4 | 6 | | **TOTAL** | **10** | **28** | **38** | [Item 3. Legal Proceedings](index=41&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in several legal actions, primarily related to past lease obligations and vendor payments, including settlements with landlords, a default judgment on a convertible note, and accrued unpaid sales taxes - Settled litigation with landlords Crownhall and Limestone regarding two closed locations for a total of **$200,000** to be paid over 20 months, avoiding potential damages of **$2.39 million**; **$52,500** remained accrued as of Dec 31, 2019[207](index=207&type=chunk) - A default judgment was entered against the company for **$171,035** related to a convertible note; **$100,000** in principal and **$18,045** in accrued interest remained outstanding as of Dec 31, 2019[208](index=208&type=chunk) - The company has accrued approximately **$329,089** as of December 31, 2019, for past-due state and local sales taxes from 2018 and 2019 and is in discussions for payment plans[217](index=217&type=chunk) - Mechanics liens totaling **$98,005** were filed by various contractors for labor and materials, with the company accruing for this liability and intending to set up payment plans[212](index=212&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[218](index=218&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=43&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'GRIL', with 652 holders as of May 29, 2020, and no cash dividends paid or intended, while significant unregistered sales of convertible notes were converted to common stock in 2019 - The company's common stock is traded on the NASDAQ market under the symbol **"GRIL"**; as of May 29, 2020, there were **652 holders of record**[220](index=220&type=chunk)[222](index=222&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future, intending to retain earnings for business expansion[223](index=223&type=chunk) - In December 2019, the company converted a significant amount of its outstanding convertible notes into common stock, including **$4.69 million of 15% Notes** and **$3.43 million of 12% Notes**[227](index=227&type=chunk)[231](index=231&type=chunk) Outstanding Warrants (as of Dec 31) | Year | Warrants Outstanding | Weighted-Average Exercise Price ($) | | :--- | :--- | :--- | | 2019 | 2,450,287 | $5.51 | | 2018 | 312,078 | $23.66 | [Item 6. Selected Financial Data](index=46&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, Muscle Maker, Inc. is not required to provide selected financial data - The company is a smaller reporting company and is therefore not required to provide the information for this item[246](index=246&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, total revenues decreased by **17.7% to $5.0 million**, with net loss widening to **$28.4 million** due to non-cash expenses, resulting in a **$3.7 million working capital deficiency** and a **$53.1 million accumulated deficit**, though subsequent IPO proceeds and a PPP loan are expected to fund operations through Q4 2020 Consolidated Results of Operations (2019 vs. 2018) | Metric | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Total Revenues | $4,959,005 | $6,022,669 | | Loss from Operations | ($3,654,005) | ($3,585,846) | | Total Other Expense, net | ($24,731,039) | ($3,618,694) | | Net Loss | ($28,385,044) | ($7,204,540) | - Total revenues decreased by **17.66%** in 2019, primarily due to a **$555,334 decrease in franchise royalties and fees** and a **$403,205 (10.4%) decrease in company restaurant sales**[265](index=265&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk) - The significant increase in net loss for 2019 was mainly driven by non-cash expenses, including a **$15.1 million inducement expense** and a **$5.4 million warrant modification expense**, incurred to convert approximately **$9.5 million of debt** into common stock[280](index=280&type=chunk) - The company had a **working capital deficiency of $3.7 million** and an **accumulated deficit of $53.1 million** as of Dec 31, 2019, raising substantial doubt about its ability to continue as a going concern[283](index=283&type=chunk) - Subsequent to year-end, the company raised net proceeds of **$6.78 million** from its IPO in February 2020 and received an **$866,300 PPP loan** in May 2020, with management believing this capital will fund operations through Q4 2020[284](index=284&type=chunk)[287](index=287&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - Not applicable[319](index=319&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's financial statements are included in the Annual Report following Item 16, with supplementary financial information not required as a smaller reporting company - The required financial statements are included later in the report; supplementary data is not required as the company is a smaller reporting company[320](index=320&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=59&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on accounting and financial disclosure - None[321](index=321&type=chunk) [Item 9A. Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2019, due to material weaknesses in internal control over financial reporting, including lack of policies, insufficient resources, and inadequate IT controls, though financial statements are believed to be fairly presented - Management concluded that disclosure controls and procedures were not effective as of December 31, 2019[322](index=322&type=chunk) - Management identified several material weaknesses in internal control over financial reporting as of December 31, 2019[328](index=328&type=chunk) - The identified material weaknesses are: lack of written documentation of internal control policies; insufficient accounting resources and segregation of duties; inadequate controls for timely communication of transactions; and significant deficiencies in IT controls[329](index=329&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of 2019 that materially affected, or are reasonably likely to materially affect, internal controls[331](index=331&type=chunk) [Item 9B. Other Information](index=61&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[332](index=332&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=62&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes CEO Michael J. Roper and CFO Ferdinand Groenewald, with an eight-member Board of Directors, seven of whom are independent, overseeing Audit, Compensation, and Nominating committees, and adhering to a code of business conduct - The executive team is led by **Michael J. Roper (CEO)**, **Kevin Mohan (Chief Investment Officer and Chairman)**, **Kenneth Miller (COO)**, and **Ferdinand Groenewald (CFO)**[335](index=335&type=chunk) - The Board of Directors consists of **eight members**, with **seven qualifying as independent directors** under Nasdaq listing requirements[364](index=364&type=chunk) - The Board has established three key committees: Audit, Compensation, and Nominating and Corporate Governance, each chaired by an independent director[368](index=368&type=chunk) - The Audit Committee is chaired by **Stephen Spanos**, who qualifies as an "audit committee financial expert"[369](index=369&type=chunk) [Item 11. Executive Compensation](index=68&type=section&id=Item%2011.%20Executive%20Compensation) For 2019, CEO Michael J. Roper's total compensation was **$271,946**, with executive compensation primarily base salary and potential bonuses tied to a successful public offering, while non-executive directors receive cash fees and stock awards 2019 Named Executive Officer Compensation | Name and Principal Position | Year | Salary ($) | Bonus ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Michael J. Roper, CEO | 2019 | $271,946 | - | $271,946 | | Ferdinand Groenewald, CFO | 2019 | $151,749 | $10,000 | $161,749 | | Kenneth Miller, COO | 2019 | $202,298 | - | $202,298 | - Employment agreements for key executives include base salaries with provisions for increases and bonuses tied to the successful completion of a public offering and listing on a national exchange[381](index=381&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk) - The company established a 2019 Equity Incentive Plan with **214,286 shares of common stock** reserved for issuance, though no shares had been issued under this plan as of the report date[391](index=391&type=chunk) - Non-executive directors receive an annual cash fee of **$9,000**, plus annual stock awards for board and committee service, and also received stock compensation for past services rendered in 2017, 2018, and 2019[401](index=401&type=chunk)[402](index=402&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=75&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of May 29, 2020, the company had **7,941,304 shares of common stock outstanding**, with Catalytic Holdings 1 LLC and Thoroughbred Diagnostics, LLC as key beneficial owners, and all executive officers and directors collectively owning **8.05%** - As of May 29, 2020, there were **7,941,304 shares of common stock outstanding**[412](index=412&type=chunk) Beneficial Ownership of Major Stockholders and Management (as of May 29, 2020) | Name of Beneficial Owner | Percentage of Shares Outstanding | | :--- | :--- | | **5% Stockholders:** | | | Catalytic Holdings 1 LLC | 29.21% | | Thoroughbred Diagnostics, LLC | 21.07% | | Greentree Financial Group, Inc | 5.29% | | **Management:** | | | All executive officers and directors as a group (13 persons) | 8.05% | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=77&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company details numerous related party transactions, primarily with its former parent ARH involving debt-to-equity conversions, and employment agreements with officers and directors for performance-based stock awards, all subject to Audit Committee review - The Audit Committee is responsible for reviewing and approving all related party transactions to manage potential conflicts of interest[415](index=415&type=chunk) - The company engaged in extensive financial transactions with its former parent, American Restaurant Holdings (ARH), including issuing multiple convertible promissory notes between 2015 and 2018, which were subsequently converted into common stock[421](index=421&type=chunk)[422](index=422&type=chunk)[425](index=425&type=chunk)[429](index=429&type=chunk) - Key executives, including CEO Michael Roper and CIO Kevin Mohan, have employment agreements that entitle them to significant restricted stock awards contingent upon the successful completion of an initial public offering[432](index=432&type=chunk)[435](index=435&type=chunk)[439](index=439&type=chunk)[440](index=440&type=chunk) - In April 2019, the company repaid **$435,000** in notes payable to related parties and issued **84,427 shares of common stock** to settle accrued interest[433](index=433&type=chunk) [Item 14. Principal Accountant Fees and Services](index=81&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Marcum LLP served as the company's independent registered public accountants for fiscal years 2019 and 2018, with total audit fees of **$238,075** and **$142,695** respectively, all pre-approved by the Audit Committee Accountant Fees (Marcum LLP) | Fee Type | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Audit fees | $238,075 | $142,695 | | Audit-related fees | - | - | | Tax fees | - | - | | All other fees | - | - | | **Total** | **$238,075** | **$142,695** | - Audit fees consist of services for the audit of consolidated financial statements and services in connection with Form 1-A filings[446](index=446&type=chunk) - All fees were pre-approved by the company's Board or Audit Committee, which is responsible for the appointment, compensation, and oversight of the independent accountants[445](index=445&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=82&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including corporate governance documents, financing agreements, material contracts like employment agreements and the Sysco distribution agreement, and CEO/CFO certifications - Lists corporate governance documents, including Articles of Incorporation (3.1) and Bylaws (3.2)[448](index=448&type=chunk) - Includes forms of various financing agreements, such as the 15% Senior Secured Convertible Promissory Notes (4.7) and 12% Senior Secured Convertible Promissory Notes (4.10)[448](index=448&type=chunk) - Contains material contracts, including the 2019 Equity Incentive Plan (4.17), employment agreements for CEO Michael Roper (10.7) and other executives, and the Master Distribution Agreement with Sysco Corporation (10.11)[449](index=449&type=chunk)[451](index=451&type=chunk) - Includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[451](index=451&type=chunk) [Item 16. Form 10-K Summary](index=85&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[452](index=452&type=chunk) Consolidated Financial Statements [Report of Independent Registered Public Accounting Firm](index=88&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor, Marcum LLP, issued a fair presentation opinion but included an explanatory paragraph expressing substantial doubt about the company's going concern ability due to significant working capital deficiency and recurring losses, also noting a change in revenue recognition accounting principle - The auditor's report contains an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to significant working capital deficiency and incurred losses[460](index=460&type=chunk) - The Company changed its method of accounting for revenue recognition in 2019 with the adoption of ASU No. 2014-09 (Topic 606), using the modified retrospective approach[459](index=459&type=chunk) - The financial statements are the responsibility of the Company's management, and the auditor's responsibility is to express an opinion on them based on the audit[461](index=461&type=chunk) [Financial Statements Data](index=89&type=section&id=Financial%20Statements%20Data) The consolidated financial statements show a deteriorating position with a **$3.7 million working capital deficiency** and a **$53.1 million accumulated deficit** as of December 31, 2019, a **net loss of $28.4 million** on **$5.0 million revenues** in 2019, and **$4.5 million cash used in operations** Consolidated Balance Sheet Highlights (As of December 31) | Metric | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Total Current Assets | $780,529 | $637,894 | | Total Assets | $6,260,710 | $4,487,090 | | Total Current Liabilities | $4,488,070 | $4,556,337 | | Total Liabilities | $6,014,948 | $7,330,225 | | Accumulated Deficit | ($53,094,602) | ($23,833,656) | | Total Stockholders' Equity (Deficit) | $245,762 | ($2,843,135) | Consolidated Statement of Operations Highlights (Year Ended December 31) | Metric | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Total Revenues | $4,959,005 | $6,022,669 | | Total Costs and Expenses | $8,613,010 | $9,608,515 | | Loss from Operations | ($3,654,005) | ($3,585,846) | | Net Loss | ($28,385,044) | ($7,204,540) | | Net Loss Per Share (Basic & Diluted) | ($17.58) | ($5.66) | Consolidated Statement of Cash Flows Highlights (Year Ended December 31) | Metric | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($4,504,226) | ($2,726,737) | | Net Cash Used in Investing Activities | ($1,520,569) | ($188,221) | | Net Cash Provided by Financing Activities | $6,145,807 | $3,194,117 | | Net Increase in Cash | $121,012 | $279,159 | | Cash - End of Period | $478,854 | $357,842 | [Notes to Consolidated Financial Statements](index=96&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the **going concern uncertainty**, the **$875,902 adjustment to retained earnings** from adopting Topic 606, the acquisition of two franchisee stores, the conversion of nearly **$9.5 million in convertible debt** triggering large non-cash expenses, and subsequent events including the **$6.78 million IPO proceeds** and **$866,300 PPP loan** - The company's ability to continue as a going concern is in substantial doubt; management's plans rely on capital raised subsequent to Dec 31, 2019, including **$6.78 million net from its IPO** and a **$150,000 note**[491](index=491&type=chunk)[492](index=492&type=chunk) - The company adopted revenue recognition standard Topic 606 in 2019, which primarily impacted the timing of franchise fee recognition, resulting in a cumulative adjustment that decreased opening retained earnings by **$875,902**[517](index=517&type=chunk) - In 2019, the company acquired two franchisee stores (Midtown and Bronx) for a combined purchase price of **$721,464**, which included **$656,348 in goodwill**[562](index=562&type=chunk)[565](index=565&type=chunk) - In December 2019, various convertible notes were amended and converted, resulting in a non-cash inducement expense of **$15.1 million** and a warrant modification expense of **$5.4 million**[623](index=623&type=chunk)[624](index=624&type=chunk) - Subsequent to year-end, the company closed its IPO in February 2020, yielding net proceeds of **$6.78 million**, and in May 2020, received an **$866,300 PPP loan** under the CARES Act[727](index=727&type=chunk)[742](index=742&type=chunk)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) For the Quarterly Period Ended September 30, 2019 [ ] 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: 000-55918 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) California 47-2555533 (State or Other Juri ...

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 June 30, 2019 [ ] 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: 000-55918 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) California 47-2555533 (State or Other Jurisdict ...

PART 1 – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements.) The company presents its unaudited Q1 2019 financial statements, noting a significant net loss and a going concern warning [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202019%20(unaudited)%20and%20December%2031%2C%202018) The balance sheet shows increased total assets and liabilities, widening the total stockholders' deficit to $4.15 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | $5,074 | $4,487 | | Cash | $843 | $358 | | **Total Liabilities** | $9,229 | $7,330 | | Total Current Liabilities | $6,416 | $4,556 | | **Total Stockholders' Deficit** | $(4,155) | $(2,843) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202019%20and%202018) Revenues decreased to $1.18 million in Q1 2019, though the net loss improved to $1.48 million from the prior year Statement of Operations Summary (in thousands) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | **Total Revenues** | $1,184 | $2,038 | | Company restaurant sales | $801 | $1,584 | | Franchise royalties and fees | $345 | $303 | | **Loss from Operations** | $(813) | $(1,550) | | **Net Loss** | $(1,483) | $(3,191) | | **Net Loss Per Share (Basic & Diluted)** | $(0.14) | $(0.41) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202019%20and%202018) Financing activities provided $1.24 million in cash, offsetting operational use and increasing the cash balance Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(640) | $(595) | | Net Cash Used in Investing Activities | $(110) | $(21) | | Net Cash Provided by Financing Activities | $1,235 | $600 | | **Net Increase (Decrease) in Cash** | $485 | $(16) | | **Cash - End of Period** | $843 | $63 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes disclose a 'Going Concern' warning, adoption of ASC 606, and significant debt financing activities - The company's financial statements were prepared with the assumption of it continuing as a 'going concern', but management notes there is substantial doubt about this ability due to a **working capital deficiency of $5,239,742** and an **accumulated deficit of $25,885,675** as of March 31, 2019[32](index=32&type=chunk) - The company adopted the new revenue recognition standard (Topic 606) in Q1 2019, applying it retrospectively, which resulted in a cumulative adjustment that **increased the accumulated deficit by $568,540** as of January 1, 2019[61](index=61&type=chunk)[75](index=75&type=chunk) - Between January 1 and March 31, 2019, the company **raised $1,235,000** through the sale of 15% Senior Secured Convertible Promissory Notes[97](index=97&type=chunk) - Subsequent to the quarter's end, the company raised an **additional $1,738,000 from 15% SPA Notes** and entered into agreements for another **$3,175,000 from 12% Secured Convertible Notes**, highlighting its continued reliance on external financing[149](index=149&type=chunk)[156](index=156&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=36&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes a 41.9% revenue decrease to store closures but notes improved operating loss due to cost cuts [Overview](index=36&type=section&id=Overview) The company operates a fast-casual restaurant system while facing a precarious financial position and a going concern warning - As of March 31, 2019, the restaurant system included **seven Company-owned restaurants** and **thirty-three franchised restaurants**[182](index=182&type=chunk) - The company had an **accumulated deficit of $25,885,675** as of March 31, 2019, and its independent auditor's report for fiscal year 2018 included a **going concern explanatory paragraph**[185](index=185&type=chunk) [Consolidated Results of Operations](index=39&type=section&id=Consolidated%20Results%20of%20Operations) Q1 2019 saw a 41.9% revenue decline due to store closures, but cost reductions led to a smaller net loss - **Total revenues for Q1 2019 decreased by 41.9%** to $1,184,374 compared to Q1 2018, primarily due to four store closures and the sale of the CTI subsidiary in May 2018[200](index=200&type=chunk) - Restaurant labor costs decreased to **34.8% of restaurant sales** in Q1 2019 from 48.2% in Q1 2018, reflecting improved efficiencies and store closures[205](index=205&type=chunk) - **Loss from operations improved**, decreasing by $736,457 to $813,196 in Q1 2019[212](index=212&type=chunk) - **Net loss decreased by $1,707,504** to $1,483,479 in Q1 2019 compared to $3,190,983 in Q1 2018[214](index=214&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company's critical liquidity position, with a $5.24 million working capital deficiency, raises going concern doubts Liquidity Metrics (in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash | $843 | $358 | | Working Capital Deficiency | $(5,240) | $(3,918) | - Management states that the company's working capital deficiency, accumulated deficit, and cash used in operations **raise substantial doubt about its ability to continue as a going concern** for at least one year[216](index=216&type=chunk) - The company has been funded through proceeds from 15% and 12% secured debt offerings, **raising approximately $7.68 million** as of the filing date of this report[217](index=217&type=chunk) [Critical Accounting Policies](index=44&type=section&id=Critical%20Accounting%20Policies) Key policies involve significant estimates for asset valuation, impairment testing, and revenue recognition under ASC 606 - The company's critical accounting policies involve **significant estimates** regarding asset valuations, useful lives, revenue recognition, and income taxes[227](index=227&type=chunk)[231](index=231&type=chunk) - **Goodwill and trademarks** are considered to have indefinite useful lives and are tested for impairment annually rather than being amortized[228](index=228&type=chunk) - Under the newly adopted ASC 606, the company recognizes franchise fee revenue on a **straight-line basis over the life of the franchise agreement**, rather than upon store opening[234](index=234&type=chunk)[238](index=238&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, this section is not applicable and no disclosures are provided - This section is marked as **'Not applicable'**[247](index=247&type=chunk) [Controls and Procedures](index=46&type=section&id=ITEM%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls were ineffective as of March 31, 2019, due to several material weaknesses - Management concluded that **disclosure controls and procedures were not effective** as of March 31, 2019[250](index=250&type=chunk) - **Material weaknesses were identified** in internal controls, including: lack of written policies, insufficient accounting resources, inadequate communication for financial reporting, and deficient IT controls[256](index=256&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=ITEM%201.%20Legal%20Proceedings.) The company faces legal actions for non-payment of rent and notes, with significant settlements and accrued liabilities - The company settled litigation with Crownhall and Limestone for past damages of $2,391,330 by agreeing to pay **$25,000 upfront and an additional $175,000 over 20 months**[261](index=261&type=chunk) - A **default judgment of $171,035** was entered against the company for failure to pay a $100,000 promissory note[262](index=262&type=chunk) - The company has accrued a **liability of $289,170** as of March 31, 2019, for unpaid state and local sales taxes collected from customers[273](index=273&type=chunk) [Risk Factors](index=49&type=section&id=ITEM%201A.%20Risk%20Factors.) This section is not applicable and refers to the risk factors detailed in the 2018 Form 10-K - This section is marked as **'Not applicable'** and refers to the company's 2018 Form 10-K[274](index=274&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company lists numerous unregistered equity issuances for cash and services, all claimed as exempt from registration - On March 31, 2019, the company issued **140,000 shares of common stock** to a consultant for services[288](index=288&type=chunk) - Subsequent to the quarter, the company issued **290,000 restricted shares** to a consultant in July 2019 and authorized **119,046 shares for board members** in August 2019[288](index=288&type=chunk) - All listed sales and issuances of securities were deemed **exempt from registration** under Section 4(a)(2) of the Securities Act or Regulation D[288](index=288&type=chunk) [Defaults Upon Senior Securities](index=51&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities.) The company reports no defaults upon its senior securities during the period - The company reports **'None'**[289](index=289&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This section is not applicable to the company's operations - This section is marked as **'Not applicable'**[290](index=290&type=chunk) [Other Information](index=51&type=section&id=ITEM%205.%20Other%20Information.) The company reports no other material information for the period - The company reports **'None'**[291](index=291&type=chunk) [Exhibits](index=52&type=section&id=ITEM%206.%20Exhibits.) This section lists filed exhibits, including Sarbanes-Oxley certifications and XBRL data files - The report includes **CEO and CFO certifications** pursuant to Sarbanes-Oxley Sections 302 and 906[293](index=293&type=chunk) - **Interactive Data Files (XBRL documents)** are also filed as exhibits[293](index=293&type=chunk)

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, 2018 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Muscle Maker, INC. (Exact name of registrant as specified in its charter) California 000-55918 47-2555533 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File No.) Identification N ...

PART 1 – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements.) The company's September 30, 2018 financial statements indicate a significant net loss, working capital deficiency, and accumulated deficit, raising substantial doubt about going concern [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2018, the company reported total assets of $4.78 million, liabilities of $8.58 million, and a stockholders' deficit of $3.80 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | September 30, 2018 | December 31, 2017 | | :--- | :--- | :--- | | **Total Assets** | $4,776,906 | $4,247,649 | | **Total Liabilities** | $8,579,250 | $7,449,444 | | **Total Stockholders' Deficit** | $(3,802,344) | $(3,201,795) | | Cash | $766,801 | $78,683 | | Total Current Assets | $1,017,079 | $376,844 | | Total Current Liabilities | $5,426,265 | $4,683,791 | [Unaudited Condensed Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company reported significant net losses for Q3 and nine months ended September 30, 2018, with declining revenues but improved loss from operations due to lower impairment charges Statement of Operations Summary (Unaudited) | Metric | Q3 2018 | Q3 2017 | Nine Months 2018 | Nine Months 2017 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,045,380 | $2,355,233 | $4,620,646 | $6,246,055 | | Loss from Operations | $(848,388) | $(5,164,151) | $(3,563,227) | $(8,418,564) | | **Net Loss** | $(1,144,468) | $(5,382,484) | $(6,699,275) | $(12,375,639) | | Net Loss Attributable to Controlling Interest | $(1,144,468) | $(4,863,934) | $(6,697,204) | $(10,039,025) | | Basic and Diluted EPS | $(0.14) | $(0.84) | $(0.81) | $(1.81) | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Deficit) The stockholders' deficit increased to $3.80 million by September 30, 2018, driven by net losses, partially offset by capital-raising activities - The accumulated deficit grew from **$(17,052,086)** at the end of 2017 to **$(23,328,391)** by September 30, 2018, reflecting the ongoing net losses[16](index=16&type=chunk) - The company raised capital through various means, including issuing **180,000 shares** for **$180,000**, recognizing a **$2.7 million** beneficial conversion feature on convertible notes, and converting **$899,340** of convertible notes into common stock[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2018, net cash used in operations was $1.75 million, offset by $2.47 million from financing activities, increasing the cash balance Cash Flow Summary (Nine Months Ended September 30) | Cash Flow Activity | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(1,752,878) | $(2,639,623) | | Net Cash Used in Investing Activities | $(33,121) | $(529,496) | | Net Cash Provided by Financing Activities | $2,474,117 | $2,976,796 | | **Net Increase (Decrease) in Cash** | **$688,118** | **$(192,323)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes disclose a 'going concern' warning, CTI subsidiary sale, extensive financing activities, ongoing legal proceedings, and subsequent capital raises - The company's financial condition raises substantial doubt about its ability to continue as a going concern, with a working capital deficiency of **$4.4 million** and an accumulated deficit of **$23.3 million** as of September 30, 2018[36](index=36&type=chunk) - On May 24, 2018, the company sold its **70% ownership** in its technology subsidiary, CTI, for **$1.00**, resulting in a recorded loss of **$456,169**[30](index=30&type=chunk)[88](index=88&type=chunk) - The company is involved in numerous litigation claims, primarily with landlords for unpaid rent, and has entered into several settlement agreements[125](index=125&type=chunk)[126](index=126&type=chunk)[129](index=129&type=chunk) - Subsequent to the reporting period, the company raised an additional **$4.3 million** through **15% Senior Secured Convertible Notes** and **$3.0 million** through **12% Secured Convertible Notes** to fund operations[174](index=174&type=chunk)[185](index=185&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses significant revenue decline due to store closures and subsidiary sale, improved operating loss, and critical liquidity issues raising going concern doubts [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Revenues significantly declined for Q3 and nine months ended September 30, 2018, due to store closures and subsidiary sale, while loss from operations improved due to reduced expenses and absence of impairment charges Q3 Revenue Comparison (in thousands) | Revenue Source | Q3 2018 | Q3 2017 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Company restaurant sales | $721.3 | $1,300.6 | $(579.3) | -44.5% | | Franchise royalties and fees | $324.1 | $791.7 | $(467.6) | -59.1% | | Other revenues | $0.0 | $262.9 | $(262.9) | -100.0% | | **Total Revenues** | **$1,045.4** | **$2,355.2** | **$(1,309.8)** | **-55.6%** | Nine-Month Revenue Comparison (in thousands) | Revenue Source | Nine Months 2018 | Nine Months 2017 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Company restaurant sales | $3,246.0 | $3,958.7 | $(712.7) | -18.0% | | Franchise royalties and fees | $1,130.0 | $1,728.9 | $(598.9) | -34.6% | | Other revenues | $244.6 | $558.5 | $(313.9) | -56.2% | | **Total Revenues** | **$4,620.6** | **$6,246.1** | **$(1,625.5)** | **-26.0%** | - The decrease in loss from operations for the nine months ended Sep 30, 2018 was primarily due to a **$2.1 million** reduction in G&A expenses and the absence of **$2.9 million** in impairment charges that were recorded in the prior year[250](index=250&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces severe liquidity constraints with a $4.4 million working capital deficiency and $23.3 million accumulated deficit, necessitating additional financing Liquidity Metrics | Metric | September 30, 2018 | December 31, 2017 | | :--- | :--- | :--- | | Cash | $766,801 | $78,683 | | Working Capital Deficiency | $(4,409,186) | $(4,306,947) | - The company's financial state raises substantial doubt about its ability to continue as a going concern for at least one year from the filing date[255](index=255&type=chunk) - Net cash provided by financing activities for the nine months ended Sep 30, 2018 was **$2.47 million**, primarily from the issuance of convertible notes and common stock[264](index=264&type=chunk) [Critical Accounting Policies](index=49&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant estimates for intangible asset valuation, long-lived asset impairment, revenue recognition, and income tax accounting - The company's goodwill and trademarks are deemed to have indefinite lives and are not amortized but are tested for impairment at least annually[268](index=268&type=chunk) - Revenue recognition involves multiple streams: restaurant sales are recognized at the point of sale, initial franchise fees are recognized upon store opening, and royalties are based on franchisee sales[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section is not applicable for the current reporting period - The company has indicated that this item is not applicable[285](index=285&type=chunk) [Controls and Procedures](index=51&type=section&id=ITEM%204.%20Controls%20and%20Procedures.) Disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of September 30, 2018[287](index=287&type=chunk) - Material weaknesses identified include: lack of written internal control policies, insufficient accounting resources restricting timely analysis and proper segregation of duties, and inadequate controls for timely communication of financial information[291](index=291&type=chunk)[293](index=293&type=chunk) - Remediation plans involve appointing new financial leadership, implementing standardized accounting policies, restructuring processes, and strengthening financial review controls[292](index=292&type=chunk)[293](index=293&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=53&type=section&id=ITEM%201.%20Legal%20Proceedings.) The company is involved in various legal actions, primarily rent disputes, with several settlements reached and a liability accrued for unpaid sales taxes - The company settled litigation with Crownhall Realty and Limestone Associates, who were seeking a total of **$2,391,330**, by agreeing to pay **$200,000** over **20 months** plus forfeiture of security deposits[299](index=299&type=chunk)[300](index=300&type=chunk) - A lawsuit from a California landlord seeking **$531,594** was settled with a payment plan[296](index=296&type=chunk) - The company accrued a liability of **$322,573** as of September 30, 2018, for unpaid past state and local sales taxes[312](index=312&type=chunk) [Risk Factors](index=54&type=section&id=ITEM%201A.%20Risk%20Factors.) This section is not applicable for this quarterly report, with risk factors detailed in the Annual Report on Form 10-K - This item is not applicable. The company directs readers to its 10-K filing from February 27, 2019 for risk factors[313](index=313&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company details numerous unregistered equity sales from 2015 through September 2018, including common stock issuances for cash, services, and debt conversions - During the nine months ended September 30, 2018, the company issued **553,425 shares** of common stock upon automatic conversion of convertible notes with a principal amount of **$899,340**[324](index=324&type=chunk) - During the same period, the company sold **180,000 shares** of common stock to various investors at **$1.00 per share**, raising **$180,000**[324](index=324&type=chunk) - All described offers and sales of securities were deemed exempt from registration under the Securities Act, relying on Section 4(a)(2) or Regulation D[325](index=325&type=chunk) [Defaults Upon Senior Securities](index=56&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities during the period - None[326](index=326&type=chunk) [Mine Safety Disclosures](index=56&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures.) This section is not applicable to the company - Not applicable[327](index=327&type=chunk) [Other Information](index=56&type=section&id=ITEM%205.%20Other%20Information.) The company reported no other information for this period - None[328](index=328&type=chunk) [Exhibits](index=57&type=section&id=ITEM%206.%20Exhibits.) This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications and XBRL interactive data files[330](index=330&type=chunk)

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 June 30, 2018 [ ] 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: 000-55918 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation o ...

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, 2018 [ ] 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: 000-55918 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation ...

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, 2017 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Muscle Maker, INC. (Exact name of registrant as specified in its charter) California 000-55918 47-2555533 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation) File No.) Identification N ...

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 September 30, 2017 [ ] 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: 000-55918 MUSCLE MAKER, INC. (Exact name of registrant as specified in its charter) California 47-2555533 (State or Other Juri ...