PART II AND III

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 1-A

REGULATION A OFFERING CIRCULAR

UNDER THE SECURITIES ACT OF 1933

MUSCLE MAKER, INC

(Exact name of issuer as specified in its charter)

California

(State of other jurisdiction of incorporation or organization)

2200 Space Park Drive, Suite 310

Houston, Texas 77058

Phone: (732) 669-1200

(Address, including zip code, and telephone number,

including area code of issuer’s principal executive office)

Robert E. Morgan

Chief Executive Officer

Muscle Maker, Inc

2200 Space Park Drive, Suite 310

Houston, Texas 77058

Phone: (732) 669-1200

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copy to:

Laura Anthony, Esq.

Legal & Compliance, LLC

330 Clematis Street, Suite 217

West Palm Beach, FL 33401

Phone: 561-514-0936

Fax: 561-514-0832

5810	47-2555533
(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Preliminary Offering Circular

March 30, 2017

Subject to Completion

An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. Information contained in this Preliminary Offering Circular is subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted before the offering statement filed with the Commission is qualified. This Preliminary Offering Circular shall not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sales of these securities in any state in which such offer, solicitation or sale would be unlawful before registration or qualification under the laws of any such state. We may elect to satisfy our obligation to deliver a Final Offering Circular by sending you a notice within two business days after the completion of our sale to you that contains the URL where the Offering Circular was filed may be obtained.

MUSCLE MAKER, INC

10,000,000 Shares of Common Stock

Minimum Purchase: 125 shares of Common Stock ($250.00)

MUSCLE MAKER, INC, a California corporation (the “Company”), is offering up to 10,000,000 shares (“Shares”) of its common stock, no par value per share (“Common Stock”), at a fixed price of $2.00 per share of Common Stock, with an aggregate amount of $20,000,000, in a “Tier 2 Offering” under Regulation A (the “Offering”). There is no minimum number of Shares that needs to be sold in order for funds to be released to the Company and for this Offering to close. The minimum investment amount per investor is $250 (125 shares of Common Stock); however, we can waive the minimum purchase requirement on a case to case basis in our sole discretion. The subscriptions, once received, are irrevocable. This Offering is being conducted on a “best efforts” basis, which means that there is no guarantee that any minimum amount will be sold, through our placement agent Wellington Shields & Co., LLC (the “Placement Agent” or the “Underwriter”), a registered broker-dealer and a member of the Financial Industry Regulatory Authority (“FINRA”). The Placement Agent is not purchasing or selling any securities pursuant to this Offering. The Placement Agent and other broker dealers will receive compensation for sales of the securities offered hereby at a fixed commission rate of 6% of the gross proceeds of the Offering. See “Plan of Distribution” in this Offering Circular. None of the Shares offered are being sold by present security holders of the Company.

We expect to commence the sale of the Shares as of the date on which the Offering Statement of which this Offering Circular is a part is declared qualified by the United States Securities and Exchange Commission (“SEC”). The Offering is expected to expire on the first of: (i) all of the Shares offered are sold; or (ii) the close of business six (6) months after the date that this Offering is deemed qualified by the SEC, unless sooner terminated or extended up to no more than an additional six (6) months by the Company.

The Company has engaged Direct Transfer, LLC (“Direct Transfer”), a wholly owned subsidiary of Issuer Direct Corp., to provide certain technology and administrative services in connection with the Offering, including the online platform of Direct Transfer by which, after the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, investors of Muscle Maker will receive, review, execute and deliver subscription agreements electronically. After the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, payment of the purchase price by ACH debit transfer, wire transfer or by major credit card shall be made through the online platform of Direct Transfer to Regions Bank (the “Escrow Agent”) and received and held by Escrow Agent in a non-interest bearing escrow account (“Escrow Account”) in compliance with SEC Rule 15c2-4, with funds released to the Company only after we closed on the subscription as described in this Offering Circular. Payments made by major credit card shall be limited to $300 per Subscriber. The Company may close on investments on a “rolling” basis (so not all investors will receive their Shares on the same date). Funds will be promptly refunded without interest, for sales that are not consummated. Upon closing under the terms as set out in this Offering Circular, funds will be immediately transferred to the Company (where the funds will be available for use in the operations of the Company’s business in a manner consistent with the “Use of Proceeds” in this Offering Circular) and the Shares for such closing will be issued to investors.

No public market currently exists for our shares of Common Stock. We intend to apply to list our common stock on the NYSE MKT (“NYSE MKT”) or the NASDAQ Capital Market (“NASDAQ”) under the symbol “MMG” after we register our common stock under the Securities Exchange Act of 1934, as amended (“Exchange Act”), following the termination of this offering. There is no assurance that our common stock will be registered under the Exchange Act or, if registered under the Exchange Act, that the application will be approved by the NYSE MKT or the NASDAQ. If not approved by the NYSE MKT or NASDAQ, we intend to apply for quotation of our common stock on the OTCQX Marketplace under the symbol “MMG” after the termination of this offering.

We are an “emerging growth company,” as such term is defined in Section 2(a)(19) of the Securities Act of 1933, as amended, and we will be subject to reduced public reporting requirements. See “Emerging Growth Company Status.”

	Price to Public		Underwriting Discounts and Commissions(1) (2)		Proceeds, Before Expenses, to Company(3)
Per Share	$	2.00	$	0.12	$	1.88
Total (4)	$	20,000,000	$	1,200,000	$	18,800,000

(1) This table depicts broker-dealer commissions of 6% of the gross offering proceeds. Please refer to the section entitled “Plan of Distribution” beginning on page 53 of this Offering Circular for additional information regarding total underwriter compensation. In addition, we have agreed to reimburse the Placement Agent for its reasonable out-of-pocket expenses subject to our prior written consent. We paid the Placement Agent a non-refundable retainer fee of $25,000.

(2) In addition to the broker-dealer discounts and commissions included in the above table, our Placement Agent will have the right to acquire warrants to purchase shares of our common stock equal to 3% of the aggregate shares sold in this offering (“Placement Agent Warrants”). The Placement Agent Warrants have an exercise price of $2.20 per share.

(3) Does not include estimated offering expenses including, without limitation, legal, accounting, auditing, escrow agent, transfer agent, other professional, printing, advertising, travel, marketing, blue-sky compliance and other expenses of this Offering. We estimate the total expenses of this Offering, excluding the Placement Agent’s commissions and expenses, will be approximately $900,000.

(4) Assumes that the maximum aggregate offering amount of $20,000,000 is received by us.

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

An investment in the Shares is subject to certain risks and should be made only by persons or entities able to bear the risk of and to withstand the total loss of their investment. Prospective investors should carefully consider and review the RISK FACTORS beginning on page 20.

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, OR THE COMMISSION, DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION.

This Offering Circular follows the disclosure format of Part I of Form S-1 pursuant to the general instructions of Part II(a)(1)(ii) of Form 1-A.

WELLINGTON SHIELDS & CO., LLC

The date of this Offering Circular is __________, 2017.

TABLE OF CONTENTS 

Market and Industry Data and Forecasts	1
Basis of Presentation	1
Trademarks and Copyrights	3
Cautionary Statement Regarding Forward-Looking Statements	4
Offering Circular Summary	4
The Offering	15
Summary Historical Consolidated Financial Data	19
Risk Factors	21
Use of Proceeds	48
Capitalization	49
Determination of Offering Price	50
Dilution	50
Plan of Distribution	54
Dividend Policy	68
Description of Business	68
Management’s Discussion and Analysis of Financial Condition and Results of Operations	92
Management	113
Executive Compensation	123
Security Ownership of Certain Beneficial Owners and Management	126
Certain Relationships and Related Party Transactions	127
Description of Capital Stock	130
Shares Eligible for Future Sale	133
Certain United States Federal Income Tax Consequences to Non-U.S. Holders	134
Additional Requirements and Restrictions	137
ERISA Considerations	138
Legal Matters	140
Experts	140
Appointment of Auditor	140
Where You Can Find More Information	140
Index to Consolidated Financial Statements

We have not, and the Underwriter has not, authorized anyone to provide any information other than that contained or incorporated by reference in this Offering Circular prepared by us or to which we have referred you. Neither we nor the Underwriter take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This Offering Circular is an offer to sell only the Common Stock offered hereby but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this Offering Circular is current only as of its date, regardless of the time of delivery of this Offering Circular or any sale of Common Stock.

For investors outside the United States: We have not done anything that would permit this Offering or possession or distribution of this Offering Circular in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this Offering and the distribution of this Offering Circular.

MARKET AND INDUSTRY DATA AND FORECASTS

Certain market and industry data included in this Offering Circular is derived from information provided by third-party market research firms, or third-party financial or analytics firms, that we believe to be reliable. Market estimates are calculated by using independent industry publications, government publications and third-party forecasts in conjunction with our assumptions about our markets. We have not independently verified such third-party information. The market data used in this Offering Circular involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and are subject to change based on various factors, including those discussed under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in this Offering Circular. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

Certain data are also based on our good faith estimates, which are derived from management’s knowledge of the industry and independent sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of included information. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our market position are based on market data currently available to us. While we are not aware of any misstatements regarding the industry data presented herein, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” in this Offering Circular. Similarly, we believe our internal research is reliable, even though such research has not been verified by any independent sources.

BASIS OF PRESENTATION

In this Offering Circular, unless the context otherwise requires:

● “we,” “us,” “our,” the “company” or “Muscle Maker,” refers collectively to Muscle Maker, Inc, a California corporation, incorporated in December 2014, the issuer of the common stock in this offering, and its subsidiaries;

● “Common Stock” refers to common stock, no par value per share, of Muscle Maker, Inc

● “CTI” refers to Custom Technology, Inc., a California corporation, formed in July 2015, which is Muscle Maker Brands’ direct, wholly-owned subsidiary;

● “MMF Members” refers to Robert E. Morgan, Membership, LLC and P. John, LLC, who own collectively the remaining 26% of Muscle Maker Brands;

● “Muscle Maker Brands” refers to Muscle Maker Brands, LLC, a California limited liability company, formed in December 2014, which is Muscle Maker’s direct, 74% owned subsidiary;

● “Muscle Maker Franchising” refers to Muscle Maker Franchising, LLC, a New Jersey limited liability company;

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● “Muscle Maker Grill” refers to the name under which our corporate and franchised restaurants do business;

● “NASDAQ” refers to Nasdaq Capital Markets of The NASDAQ Stock Market;

● “NYSE MKT” refers to the NYSE MKT;

● “Offered Shares” or “Shares” refers to the 10,000,000 shares of common stock, no par value per share, of Muscle Maker, Inc which are being offered in this offering under Regulation A;

● “OTCQX” refers to the OTCQX Marketplace by the OTC Markets Group;

● “our restaurant system” or “our system” refers to both company-operated and franchised restaurants, and the number of restaurants presented in our restaurant system, unless otherwise indicated, is as of December 31, 2015;

● “our restaurants,” or results or statistics attributable to one or more restaurants without expressly identifying them as company-operated, franchised or both, refers to our company-operated restaurants only;

● when referring to “system-wide” financial metrics, we are referring to such financial metrics at the restaurant-level for company-operated restaurants plus those reported to us by our franchisees;

● “average check” refers to company restaurant revenues from company-operated restaurants divided by company-operated restaurant transactions;

● “dayparts” refers to five dayparts consisting of lunch as 10:00 a.m. to 2:00 p.m., snack as 2:00 p.m. to 5:00 p.m., dinner as 5:00 p.m. to 8:00 p.m., and after dinner as 8:00 p.m. to close; and

● “aided brand awareness” refers to when a survey respondent indicates recognition of a specific brand from a list of possible names presented by those conducting the survey instead of indicating recognition of a specific brand without being offered a list of potential responses.

We use a twelve-month fiscal year ending on December 31^st of each calendar year. Fiscal 2014 and fiscal 2015 ended on December 31, 2014 and December 31, 2015, respectively.

In a twelve-month fiscal year, each quarter includes three-months of operations; the first, second, third and fourth quarters end on March 31^st, June 30^th, September 30^th, and December 31^st, respectively.

Comparable restaurant sales growth reflects the change in year-over-year sales for the comparable restaurant base (as applicable, system-wide, franchised or company-operated restaurants). A new restaurant enters our comparable restaurant base on the first full day of the month after being open for 15 months using a mid-month convention.

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System-wide comparable restaurant sales include restaurant sales at all comparable company-operated restaurants and at all comparable franchised restaurants, as reported by franchisees. While we do not record franchised restaurant sales as revenues, our royalty revenues are calculated based on a percentage of franchised restaurant sales.

We measure system-wide, franchised and company-operated average unit volumes, or AUVs, on a fiscal year basis. Annual AUVs are calculated using the following methodology: first, we determine the restaurants that have been open for a full 15-month period; and second, we calculate the revenues for these restaurants and divide by the number of restaurants in that base to arrive at our AUV calculation.

The restaurant industry is divided into two segments: full service and limited service. Full service is comprised of the casual dining, mid-scale and fine dining sub-segments. Limited service, or LSR, is comprised of the quick-service restaurant, or QSR, and fast-casual sub-segments. “QSRs” are defined by Technomic as traditional “fast-food” restaurants with average check sizes of $3.00-$8.00. “Fast-casual” is defined by Technomic as a limited or self-service format with average check sizes of $8.00-$12.00 that offers food prepared to order within a generally more upscale and developed establishment. Our restaurants combine elements of both QSRs and fast-casual restaurants. Our restaurants’ convenient locations and format and average check are attributes that we share with QSRs (rather than with the fast-casual segment generally), while the quality of our food, the freshness of our ingredients and our traditional cooking methods are attributes that we generally share with fast-casual restaurants.

Certain monetary amounts, percentages and other figures included in this Offering Circular have been subject to rounding adjustments. Percentage amounts included in this Offering Circular have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Offering Circular may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements. Certain other amounts that appear in this Offering Circular may not sum due to rounding.

Unless otherwise indicated, all references to “dollars” and “$” in this Offering Circular are to, and amounts are presented in, U.S. dollars.

Unless otherwise indicated or the context otherwise requires, financial and operating data in this offering circular reflect the consolidated business and operations of Muscle Maker and its subsidiaries.

TRADEMARKS AND COPYRIGHTS

We own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, logos and website names. In addition, we own or have the rights to copyrights, trade secrets and other proprietary rights that protect the content of our products and the formulations for such products. This Offering Circular may also contain trademarks, service marks and trade names of other companies, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this Offering Circular is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this Offering Circular are listed without their ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks. All other trademarks are the property of their respective owners.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Offering Circular contains certain forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “outlook,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward-looking information. Our ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth or anticipated in our forward-looking statements. Factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, funds derived from operations, cash available for dividends, cash flows, liquidity and prospects include, but are not limited to, the factors referenced in this Offering Circular, including those set forth below.

When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this Offering Circular. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Offering Circular. The matters summarized below and elsewhere in this Offering Circular could cause our actual results and performance to differ materially from those set forth or anticipated in forward-looking statements. Accordingly, we cannot guarantee future results or performance. Furthermore, except as required by law, we are under no duty to, and we do not intend to, update any of our forward-looking statements after the date of this Offering Circular, whether as a result of new information, future events or otherwise.

OFFERING CIRCULAR SUMMARY

This summary of the Offering Circular highlights material information concerning our business and this offering. This summary does not contain all of the information that you should consider before making your investment decision. You should carefully read the entire Offering Circular, including the information presented under the section entitled “Risk Factors” and the financial data and related notes, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from future results contemplated in the forward-looking statements as a result of factors such as those set forth in “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

In this Offering Circular, unless the context indicates otherwise, “Muscle Maker,” the “Company,” “we,” “our,” “ours” or “us” refer to Muscle Maker, Inc, a California corporation, and its subsidiaries.

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Our Company

The Muscle Maker Grill is a high-growth, fast casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based meals featuring chicken, seafood, pasta, burgers, wraps and flat breads. In addition, we feature freshly prepared entrée salads and an appealing selection of sides, protein shakes and fruit smoothies. We operate in the approximately $34.5 billion fast casual restaurant segment, which we believe has created significant recent disruption in the restaurant industry and is rapidly gaining market share from adjacent restaurant segments, resulting in significant growth opportunities for restaurant concepts such as Muscle Maker Grill.

We believe our restaurant concept delivers a highly differentiated customer experience by combining the quality and hospitality that customers commonly associate with our full service and fast casual restaurant competitors with the convenience and value customers generally expect from traditional fast food restaurants. The following core values form the foundation of our brand:

● Quality. Commitment to provide the highest quality, healthy-inspired food for a wonderful experience.

● Empowerment and Respect. We seek to empower our employees to take initiative and give their best while respecting themselves and others to maintain an environment for team work and growth.

● Service. Provide world class service to achieve excellence each passing day.

● Value. Our combination of high-quality, healthy-inspired food, empowerment of our employees, world class service, all delivered at a low price, strengthens the value proposition for our customers.

In striving for these goals, we aspire to connect with our target market and create a great brand with a strong and loyal customer base.

As of June 30, 2016, Muscle Maker and its subsidiaries and franchisees operate 48 Muscle Maker Grill restaurants located in 10 states, 5 of which are owned and operated by Muscle Maker, and 43 are franchise restaurants.

Our restaurants generated company-operated restaurant revenue of $1,032,558 and $875,566 for the year ended December 31, 2015, and the six-months ended June 30, 2016, respectively. Total company revenues were $3,124,823 and $1,917,540, and net losses of $1,021,641 and $1,203,627 for the year ended December 31, 2015, and the six-months ended June 30, 2016, respectively.

We are the owner of the trade name and service mark Muscle Maker Grill® and other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill® restaurants. We license the right to use the Muscle Maker Grill® trademarks and intellectual property to our wholly-owned subsidiary, Muscle Maker Brands, and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill® restaurants.

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Seasonal factors and the timing of holidays cause our revenue to fluctuate from quarter to quarter. Our revenue per restaurant is typically lower in the fourth quarter due to reduced December traffic and higher traffic in the first, second, and third quarters.

Our healthy-inspired menu, value proposition, and culture have helped us to deliver strong and consistent financial and operating performance, as illustrated by the following:

● our company-owned annual average unit volumes, or AUVs, grew from $600,000 in fiscal year 2014 to $625,000 in fiscal year 2015; and

● from fiscal year 2014 to fiscal year 2015, we increased our total revenue by 4.83% from $2,980,877 to $3,124,823.

Our Industry

We operate within the LSR segment of the U.S. restaurant industry, which includes QSR and fast-casual restaurants. According to Technomic, 2015 sales for the total LSR category increased 5.2% from 2014 to $255 billion. We offer fast-casual quality food combined with quick-service speed, convenience and value across multiple dayparts. According to Technomic, sales for the total QSR segment grew 4.1% from 2014 to $212 billion in 2015, and are projected to grow to $254 billion by 2019, representing a compounded annual growth rate, or CAGR, of 4.6%. Total sales in the fast-casual segment grew 11.3% from 2014 to $43 billion in 2015, and are projected to grow to $64 billion by 2019, representing a CAGR of 10.2%. We believe our differentiated, high-quality menu delivers great value all day, every day, positions us to compete successfully against both QSR and fast-casual concepts, providing us with a large addressable market.

We expect that the trend towards healthier eating will attract and increase consumer demand for fresh and hand-prepared dishes, leading to a positive impact on our sales.

Our Strengths

Compelling Speed Using Cook to Order Preparation: Our guests can expect to enjoy their meals in eight minutes or less. While this service time may be slightly higher than the QSR segment, it fits well within the range of the fast casual segment. Our meals are prepared from a cook to order method using only the freshest, all natural ingredients.

Daypart Mix and Revenue Streams: Standard operating hours for a Muscle Maker Grill are from 10:30 AM to 8:30 PM, Monday through Friday, 11:00 AM to 6 PM, Saturday, and closed on Sunday. While our daypart mix is typical to the QSR fast casual segment which is 5% pre-lunch, 45% lunch, 35% dinner and 15% late evening. We have multiple revenue streams that allow for greater efficiencies and operations and ultimately higher profitability. A typical QSR fast casual brand has two to three revenue streams: dine-in, take-out and delivery. Muscle Maker Grill executes on eight different revenue streams; including: dine-in, take-out, delivery, catering, meal plans, retail and grab and go kiosks and food trucks.

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Attractive Price Point and Perceived Value: Muscle Maker Grill offers meals with ‘power sides’ beginning at $8.99, using only the highest quality ingredients such as grass-fed beef, all natural chicken, whole wheat pastas, brown rice and a power blend of kale, romaine and spinach. Our cook to order method, speed of service, hospitality and the experience of our exhibition style kitchen creates a great value perception for our customers. Meal Plan meals begin at $8 a meal making them not only convenient but affordable too. Muscle Maker Grill also offers a boxed lunch program for schools and other organizations starting at $10 a box. These lunches include a wrap, salad or entrée, and a side and a drink. We not only reward our guests with a great value and guest experience, we reward them for their loyalty as well. Frequent Muscle Maker Grill guests can take advantage of its loyalty program, Muscle Maker Grill Rewards, where points are awarded for every dollar spent towards free or discounted menu items. Cards are not required to participate as members can provide their phone number or use the mobile app, Muscle Maker Grill Rewards, to receive notifications announcing new menu items, special events and more. The program is enjoyed by thousands or guests!

Muscle Maker Grill Business Facts:

● Largest protein based QSR fast casual in the united states.

● Established in 1995 in Colonia, NJ.

● Muscle Maker Grill currently operates 51 restaurants, 39 franchised and 12 company as of March 30, 2017 with system-wide sales exceeding 24 million in 2016.

● Ranked in the future 50 list of the fastest growing small chains in America and achieved a spot on Fastcasual.com’s top 100 Movers and Shakers in 2016 and expecting a top five ranking in 2017.

● National footprint in 12 states as of March 30, 2017 and soon to be 18 states in 2017.

● Multiple International expansion opportunities including: Kuwait, Dubai and India.

● Currently a preferred vendor for the US military with restaurants in development in GA, KY, MA, NY, NC, SC, VA, TX and WA.

Restaurant Level Profitability and Unit Economics: We believe our brand position in a segment with limited competition, strong value perception and multiple revenue streams provides a great opportunity for continued corporate and franchise growth. Our low cost of entry and real estate strategy allows for greater operating efficiencies and higher profitability. See below for corporate store economics. We primarily operate in urban and suburban markets using in line locations and targeting second generation restaurants. Typical capital investment is $180,000 for buildout and equipment. Expected annual venues to achieve a 10% operating profit should be approximately $800,000 providing a payback period of 27 months. Other company venue sources include a franchise fee of $35,000 per unit on a sliding scale for multi-unit development. Franchisees currently pay 5% off gross sales in royalties and 3% of gross sales for marketing and advertising.

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Leveraging Non-Traditional Revenue Streams:

Delivery: A significant differentiator is that Muscle Maker Grill offers delivery at every location nation-wide. Delivery is an option through our mobile app, online ordering platform making it easy and convenient for our guests. Delivery percentages range from 10% up to 56% of sales. We strongly believe this segment will continue to grow as our core demographic has demonstrated the need for online ordering and delivery versus dine-in and take-out.

Catering: Our diverse menus items are also offered through our catering program making it easy and affordable to feed a group. We can feed a group ranging from 10 or 5,000. Muscle Maker Grill has secured large catering contracts with multi-national corporations, universities as well as professional and college athletic programs. Our boxed lunch program, which includes a wrap, salad, or entrée, a side and a drink for a set price is widely popular within schools and other organizations.

Meal Plans: To make healthy eating even easier, Muscle Maker Grill’s signature nutritionally-focused menu items are available through its new Meal Plan program, allowing pre-orders of meals that taste great via phone, online or in-store, available for pick up or delivered right to their door. Available as five, 10, 15 or 20 meals, guests can choose from 28 Muscle Maker Grill menu items, including the Hollywood Salad, Turkey Meatball Wrap, Arizona and many more.

Retail: All Muscle Maker Grill locations participate in our retail merchandising and supplement program. This is a unique revenue stream specific to the Muscle Maker Grill brand and is atypical in the QSR fast casual segment. Guests can purchase our propriety protein in bulk, supplements, boosters, protein and meal replacement bars and cookies. This program gives our guests the opportunity to manage their healthy lifestyle beyond the four walls of our restaurants.

Grab and Go Kiosks: Muscle Maker Grill offers grab and go kiosks both in the restaurants and non-traditional locations. The kiosks are comprised of 10 to 12 core meal plan menu items. We have positioned the kiosks so that guests can grab a meal on the run. These meals are convenient to guests that chose not to dine in or want additional meals for themselves or family members.

Food Trucks: Food trucks have become a more main stream point of destination for restaurant goers and we strongly believe the growth trend in the segment will continue. Muscle Maker Grill wants to make our healthy options available to all consumers and will continue to develop and grow this revenue stream. Muscle Maker Grill currently has one food truck in operation in Dallas, TX and three to five in the pipeline for US military bases such as Hans comb Airforce Base, Quantico Marine Base and West Point Military Academy.

Strategy

We plan to pursue the following strategies to continue to grow our revenues and profits.

Expand Our System-Wide Restaurant Base.  We believe we are in the early stages of our growth story with 48 current locations in 10 states, as of June 30, 2016, and estimate, based on internal analysis and a study prepared by ESRI, a long-term total restaurant potential in the United States of approximately 3,000 to 5,000 locations. For the year ended December 31, 2014, we opened 12 new franchised restaurants and no new company-operated restaurants. For the year ended December 31, 2015, we opened one new company-operated and seven new franchised restaurants. For the year ended December 31, 2016, we opened six new company-operated and four new franchised restaurants. In 2017, we intend to open 15 to 20 new company-operated and 15 new franchised restaurants, including military bases, across Arizona, California, Florida, Georgia, Illinois, Louisiana, Kansas, Massachusetts, Nebraska, New Jersey, New York, Nevada, North Carolina, Pennsylvania, Texas, Washington and Internationally. Over the long term, we plan to grow the number Muscle Maker Grill restaurants by 30% to 50% annually. There is no guarantee that we will be able to increase the number of our restaurants. We may be unsuccessful in expanding within our existing or into new markets for a variety of reasons described herein under “Risk Factors” above, including competition for customers, sites, franchisees, employees, licenses and financing.

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Drive Comparable Restaurant Sales. We plan to continue delivering comparable restaurant sales growth through the following strategies:

● Menu Strategy and Evolution. We will continue to adapt our menu to create entrees that complement our health-inspired offerings and that reinforce our differentiated fast casual positioning. We believe we have opportunities for menu innovation as we look to provide customers more choices through customization and limited time alternative proteins. Our marketing and operations teams collaborate to ensure that the items developed in our test kitchen can be executed to our high standards in our restaurants with the speed and value that our customers have come to expect. To provide added variety, from time to time we introduce limited time offerings such as our fish tacos and shish-k-bobs. Some of these items have been permanently added to the menu.

● Attract New Customers Through Expanded Brand Awareness: We expect to attract new customers as Muscle Maker Grill becomes more widely known due to new restaurant openings and marketing efforts focused on broadening the reach and appeal of our brand. We expect consumers will become more familiar with Muscle Maker Grill as we continue to penetrate our markets, which we believe will benefit our existing restaurant base. Our marketing strategy centers on our “Great Food with Your Health in Mind” campaign, which highlights the desirability of healthy-inspired food and made-from-scratch quality of our food. We also utilize social media community engagement and public relations to increase the reach of our brand. Additionally, our system will benefit from increased contributions to our marketing and various advertising funds as we continue to grow our restaurant base.

● Increase Existing Customer Frequency: We are striving to increase customer frequency by providing a service experience and environment that “compliments” the quality of our food and models our culture. We expect to accomplish this by enhancing customer engagement, while also improving throughput, order execution and quality. Additionally, we have recently implemented a customer experience measurement system, which provides us with real-time feedback and customers’ insights to enhance our service experience. We believe that always striving for excellent customer service will create an experience and environment that will support increased existing customer visits.

● Continue to Grow Dayparts: We expect to drive growth across these dayparts through optimized labor and management allocation, enhanced menu offerings, innovative merchandising and marketing campaigns, which have successfully driven growth in our dayparts. We plan to continue introducing and marketing limited time offers to increase occasions across our dayparts as well as to educate customers on our lunch and dinner offerings.

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Continue to Enhance Profitability. We focus on expanding our profitability while also investing in personnel and infrastructure to support our future growth. We will seek to further enhance margins over the long-term by maintaining fiscal discipline and leveraging fixed costs. We constantly focus on restaurant-level operations, including cost controls, while ensuring that we do not sacrifice the quality and service for which we are known. Additionally, as our restaurant base grows, we believe we will be able to leverage support costs as general and administrative expenses grow at a slower rate than our revenues.

Corporate History

Muscle Maker, Inc. (“Muscle Maker”), was incorporated by American Restaurant Holdings (“American Restaurant Holdings”) in California on December 8, 2014, and is a majority owner of Muscle Maker Brands, LLC (“Muscle Maker Brands”). Muscle Maker Brands’ subsidiaries include company owned restaurants as well as Custom Technology, Inc, (“CTI”) a technology and point of sale (“POS”) systems dealer and technology consultant (Muscle Maker together with Muscle Maker Brands and its subsidiaries are referred to herein collectively as the “Company”). Muscle Maker Brands was formed on December 22, 2014 in the state of California for the purpose of acquiring and operating company owned restaurants, as well as franchising its name and business system to qualified franchisees. Muscle Maker Franchising, LLC (“Muscle Maker Franchising”) was founded in 1995 in order to develop a brand of healthy-option fast food restaurants.

Formation

On December 22, 2014, Muscle Maker issued 100,000 shares of its common stock to the Chief Executive Officer of American Restaurant Holdings as founder shares for cash proceeds of $10.

Acquisition of 74% of Muscle Maker Brands

On January 23, 2015, Muscle Maker, Muscle Maker Brands and Muscle Maker Franchising entered into a Unit Purchase Agreement whereby Muscle Maker Brands purchased substantially all of the assets and liabilities of Muscle Maker Franchising, Muscle Maker acquired 7,400 membership units of Muscle Maker Brands (representing 74% of the membership units of Muscle Maker Brands), and certain members of Muscle Maker Franchising (“MMF Members”) acquired 2,600 membership units of Muscle Maker Brands (representing 26% of the membership units of Muscle Maker Brands). (the “MMG Acquisition”). The aggregate purchase consideration for Muscle Maker’s membership interest in Muscle Maker Brands was $4,244,000 and consisted of $3,570,000 in cash, $604,000 of promissory notes (consisting of a $400,000 promissory note (“MM Note”) from Muscle Maker and a $204,000 promissory note (“MMB Note”) from Muscle Maker Brands) and 500,000 shares of common stock of Muscle Maker valued at $0.14 per share or $70,000 issued. On January 23, 2015, American Restaurant Holdings provided cash of $3,645,000 and an obligation to repay an aggregate of $604,000 of principal due under MM Note and MMB Note issued to Muscle Maker Franchising in order to facilitate the Muscle Maker Brands acquisition. Pursuant to the terms of the Unit Purchase Agreement, the MMF Members shall convert their non-controlling interest in Muscle Maker Brands into an aggregate of 14,475,676 shares of Muscle Maker common stock prior to the Company going public.

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On January 24, 2015, Muscle Maker granted 200,000 shares of its common stock valued at $0.14 per share to its Director of Brand Development, in connection with an employment agreement with the Director of Brand Development.

On January 24, 2015, the Company issued 428,571 shares of its common stock to the Director of Brand Development in exchange for cash proceeds of $0.14 per share, or $60,000.

On July 23, 2015 and August 28, 2015, the Company issued 750,000 and 500,000 shares of its common stock, and 5-year warrants for the purchase of 375,000 and 250,000 shares of common stock respectively, for aggregate cash proceeds of $750,000. The warrants are exercisable at $0.75 per share.

Springfield Acquisition

On May 4, 2015, Muscle Maker Brands acquired a business in Springfield, New Jersey, as a corporate store (the “Springfield Acquisition”). The purchase price of the store was $30,060, of which $8,670 related to equipment purchased and the remaining $21,390 was accounted for as goodwill.

CTI Acquisition

On August 1, 2015, the Company acquired 70% of the shares of Custom Technology, Inc. (“CTI”), a technology and point of sale (“POS”) systems dealer and technology consultant, in exchange for $70,000 in cash (the “CTI Acquisition”). CTI was formed on July 29, 2015 and entered into an asset purchase agreement on August 1, 2015 pursuant to which CTI purchased POS computer systems, cash registers, camera systems and related inventory and supplies from its predecessor entity.

Repayment of Promissory Notes regarding MMG Acquisition

The MMB Note was completely repaid on March 9, 2015. On July 21, 2015, January 23, 2016 and July 23, 2016, installments of $100,000, $150,000 and $150,000 were repaid on the balance of the MM Note. As of July 23, 2016, there is no balance outstanding related to MM Note.

Spin-Off of Muscle Maker by American Restaurant Holdings

On March 23, 2017, American Restaurant Holdings authorized and facilitated the distribution of 51,672,217 shares of Common Stock of Muscle Maker held by American Restaurants, LLC, the wholly owned subsidiary of American Restaurant Holdings, to the shareholders of American Restaurant Holdings (the “Spin-Off”). As a result of the Spin-Off on March 23, 2017, American Restaurant Holdings is no longer a majority owner of Muscle Maker.

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Recent Advances, Exchange of Advances for Convertible Notes, and Conversion of Convertible Notes to Shares of Common Stock

On December 31, 2015, Muscle Maker issued a promissory note in the amount of $1,082,620 (the “2015 ARH Note”) to American Restaurant Holdings. The 2015 ARH Note had no stated interest rate and was convertible into 2,165,240 shares of the Company’s stock at $0.50 per share.

During the period from July 1, 2016 through December 31, 2016, American Restaurant Holdings provided $1,364,842 of advances to Muscle Maker. These advances, combined with the $1,257,000 payable to American Restaurant Holdings as June 30, 2016 were exchanged for a convertible note in the amount of $2,621,842 (the “2016 ARH Note”). The 2016 ARH Note had no stated interest rate or maturity date and was convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the American Restaurant Holdings.

During the period from December 31, 2016 through February 15, 2017, American Restaurant Holdings provided $980,949 of advances to the Company. The payable due to American Restaurant Holdings as a result of these advances was exchanged for a convertible promissory note in the amount of $980,949 (the “2017 ARH Note”). The 2017 ARH Note has no stated interest rate or maturity date and is convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the lender.

On March 14, 2017, American Restaurant Holdings elected to convert: (a) the 2015 ARH Note in the principal amount of $1,082,620 into 2,165,240 shares of Common Stock of Muscle Maker at a conversion price of $0.50 per share; (b) the 2016 ARH Note in the principal amount of $2,621,842 into 6,554,604 shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share; and (c) the 2017 ARH Note in the principal amount of $980,949 into 2,452,373 shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share.

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Issuances of Warrants

The Company issued the following warrants to purchase an aggregate of 3,827,442 shares of Common Stock of Muscle Maker: (a) a 5-year warrant to Dean Miles to purchase 625,000 shares of Common Stock of Muscle Maker at an exercise price of $0.75 per share, in connection with two private placements to Mr. Miles in 2015; (b) a 3-year warrant to American Restaurant Holdings to purchase of 2,294,112 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share, in connection with the exchange of advances for the 2016 ARH Note in 2016; (c) a 3-year warrant to American Restaurant Holdings to purchase of 858,330 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share, in connection with the exchange of advances for the 2017 ARH Note in 2017; and (d) a 3-year warrant to Prashant Shah to purchase of 50,000 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share.

Anticipated Exchange of Shares of Common Stock for Units of Muscle Maker Brands

Pursuant to the terms of the Unit Purchase Agreement, Muscle Maker anticipates engaging in a share exchange with the MMF Members prior to the Offering, pursuant to which Muscle Maker will issue an aggregate of 14,475,676 shares of its common stock to the MMF Members in exchange for the 2,600 membership units of Muscle Maker Brands owned by the MMF Members which were initially recorded at $1,466,541, representing 26% ownership interest in Muscle Maker Brands, in a tax-free exchange (“Anticipated Exchange”). As a result of this Anticipated Exchange, Muscle Maker Brands will become a wholly owned subsidiary of Muscle Maker. Pursuant to the terms of the Operating Agreement of Muscle Maker Brands, Muscle Maker operates and controls all of the business and affairs of Muscle Maker Brands and, through Muscle Maker Brands and its subsidiaries, conducts our business. Muscle Maker consolidates the financial results of Muscle Maker Brands in its consolidated financial statements.

Anticipated Grant of Shares of Common Stock to Employees and Consultants

Muscle Maker anticipates granting 1,115,000 shares of its common stock to its employees and consultants prior to this Offering.

Risk Factors

Before you invest in our common stock, you should carefully consider all of the information in this Offering Circular, including matters set forth under the heading “Risk Factors.” Risks relating to our business include the following, among others:

● our vulnerability to changes in consumer preferences and economic conditions;

● our ability to open new restaurants in new and existing markets and expand our franchise system;

● our ability to generate comparable restaurant sales growth;

● our restaurants and our franchisees’ restaurants may close due to financial or other difficulties;

● new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits;

● anticipated future restaurant openings may be delayed or cancelled;

● increases in the cost of food supplies and other products;

● our ability to compete successfully with other quick-service and fast-casual restaurants; and

● our reliance on our franchisees, who may be adversely impacted by economic conditions and who may incur financial hardships, be unable to obtain credit, need to close their restaurants or declare bankruptcy.

Emerging Growth Company Status

We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of all of these exemptions.

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In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected to take advantage of the benefits of this extended transition period.

We could be an emerging growth company until the last day of the first fiscal year following the fifth anniversary of our first common equity offering, although circumstances could cause us to lose that status earlier if our annual revenues exceed $1.0 billion, if we issue more than $1.0 billion in non-convertible debt in any three-year period or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.

Company Information

Our principal office is located at 2200 Space Park Drive, Suite 310, Houston, Texas 77058 and our phone number is (732) 669-1200. Our corporate website address is www.musclemakergrill.com. Information contained on, or accessible through, our website is not a part of, and is not incorporated by reference into, this Offering Circular.

Muscle Maker Grill, the logos of Muscle Maker Grill, and other trade names, trademarks or service marks of Muscle Maker appearing in this Offering Circular are the property of Muscle Maker. Trade names, trademarks and service marks of other organizations appearing in this Offering Circular are the property of their respective holders.

The diagram below depicts our organizational structure after this Offering:

This diagram assumes that (1) an aggregate of 14,475,676 shares of Common Stock have been issued by Muscle Maker to the MMF Members in exchange for their membership units of Muscle Maker Brands prior to this Offering and (2) an aggregate of 1,115,000 shares of Common Stock have been granted by Muscle Maker to employees and consultants of Muscle Maker prior to this Offering.

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THE OFFERING

Securities Being Offered by the Company	10,000,000 shares of common stock, no par value per share (the “Common Stock”), on a “best efforts” basis for up to $20,000,000 of gross proceeds. Purchasers of the Shares will become our common stockholders.
Offering Price per Common Stock by the Company	$2.00 per share of Common Stock.
Underwriter	Wellington Shields & Co., LLC shall serve as our Placement Agent along with participating broker-dealers.
Subscribing Online	We have engaged Direct Transfer, LLC (“Direct Transfer”), a wholly owned subsidiary of Issuer Direct Corp., to provide certain technology and administrative services in connection with the Offering, including the online platform of Direct Transfer by which, after the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, investors of Muscle Maker will receive, review, execute and deliver subscription agreements electronically.

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Escrow Agent	Regions Bank shall serve as our Escrow Agent.
Escrow Account	After the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, payment of the purchase price by ACH debit transfer, wire transfer or by major credit card shall be made through the online platform of Direct Transfer to Regions Bank (the “Escrow Agent”) and received and held by Escrow Agent in a non-interest bearing escrow account (“Escrow Account”) in compliance with SEC Rule 15c2-4, with funds released to the Company only after we closed on the subscription as described in this Offering Circular. Funds will be promptly refunded without interest, for sales that are not consummated. Payments made by major credit card shall be limited to $300 per subscriber. Upon each closing, the proceeds collected for such closing will be disbursed to the Company and the Shares for such closing will be issued to investors.
Minimum Investment Amount	The minimum investment amount per investor is $250 (125 shares of Common Stock); however, we can waive the minimum purchase requirement on a case to case basis in our sole discretion. The subscriptions, once received, are irrevocable.

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Investment Amount Restrictions	Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.
Capital Stock	Our common stock is common equity and contains no preferences as to other classes of our capital stock. Each share of our common stock entitles the holder to one vote on all matters submitted to the vote of the stockholders, including the election of directors.
Number of Shares Outstanding Before the Offering of Common Stock	A total of 69,741,464 shares of Common Stock issued and outstanding as of the date hereof. This number includes the following issuances to American Restaurant Holdings after June 30, 2016: (a) 2,165,240 shares of Common Stock of Muscle Maker issued in connection with the conversion of the 2015 ARH Note in the principal amount of $1,082,620; (b) 6,554,604 shares of Common Stock of Muscle Maker issued in connection with the conversion of the 2016 ARH Note in the principal amount of $2,621,842; and (c) 2,452,373 shares of Common Stock of Muscle Maker in connection with the conversion of the 2017 ARH Note in the principal amount of $980,949. In addition, the number of outstanding Common Stock includes 14,475,676 shares of Common Stock, which we assume will be issued by Muscle Maker to the MMF Members prior to the Offering in exchange for their membership units of Muscle Maker Brands which were initially recorded at $1,466,541. Furthermore, the number of outstanding Common Stock includes 1,115,000 shares of Common Stock, which we assume will be granted by Muscle Maker to employees and consultants of Muscle Maker prior to the Offering.

Number of Shares Outstanding
After the Offering of
Common Stock if All the
Stock Being Offered are Sold A total of 79,741,464 shares of Common Stock will be issued and outstanding after this Offering is completed if all the Offered Shares are sold. This number includes the following issuances to American Restaurant Holdings after June 30, 2016: (a) 2,165,240 shares of Common Stock of Muscle Maker issued in connection with the conversion of the 2015 ARH Note in the principal amount of $1,082,620; (b) 6,554,604 shares of Common Stock of Muscle Maker issued in connection with the conversion of the 2016 ARH Note in the principal amount of $2,621,842; and (c) 2,452,373 shares of Common Stock of Muscle Maker in connection with the conversion of the 2017 ARH Note in the principal amount of $980,949. In addition, the number of outstanding Common Stock includes 14,475,676 shares of Common Stock, which we assume will be issued by Muscle Maker to the MMF Members prior to the Offering in exchange for their membership units of Muscle Maker Brands which were initially recorded at $1,466,541. Furthermore, the number of outstanding Common Stock includes 1,115,000 shares of Common Stock, which we assume will be granted by Muscle Maker to employees and consultants of Muscle Maker prior to the Offering.

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Voting Rights The Common Stock offered hereby are entitled to one vote per share.

Placement Agent’s Warrant

Upon each closing of this offering, we have agreed to issue to the Placement Agent warrants to purchase a number of shares of our common stock equal to three percent (3%) of the total shares of our common stock sold in such closing (“Placement Agent’s Warrants”). The Placement Agent’s Warrants are exercisable commencing 180 days after the qualification date of the offering statement related to this offering, and will be exercisable until the fifth anniversary of the qualification date. The Placement Agent’s Warrants are not redeemable by us. The Placement Agent Warrants have an exercise price of $2.20 per share (equal to 110% of the implied price per share of the Offering).

Risk Factors

Investing in our Common Stock involves risks. See the section entitled “Risk Factors” in this Offering Circular and other information included in this Offering Circular for a discussion of factors you should carefully consider before deciding to invest in our Common Stock.

Use of Proceeds We expect to receive net proceeds from this offering of approximately $18,800,000 after deducting estimated underwriting discounts and commissions in the amount of $1,200,000 (6% of the gross proceeds of the Offering). We intend to use the net proceeds for the following purposes in the following order: (a) first towards credit card fees of up to approximately $400,000 (2% of the gross proceeds from the Offering); (b) second towards the fees and expenses associated with qualification of Offering under Regulation A of up to $900,000, including legal, auditing, accounting, escrow agent, transfer agent, financial printer and other professional fees; (c) third towards the implementation of our business plan, including but not limited to, (i) opening new corporate stores, (ii) funding possible acquisition opportunities, and (iii) funding a national marketing campaign; and (d) the balance of capital raised toward working capital and general corporate purposes. See “Use of Proceeds.”

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Termination of the Offering	The Offering is expected to expire on the first of: (i) all of the Shares offered are sold; or (ii) the close of business six (6) months after the date that this Offering is deemed qualified by the SEC, unless sooner terminated or extended up to no more than an additional six (6) months by the Company.
Proposed Listing	No public market currently exists for our shares of Common Stock. We intend to apply to list our common stock on the NYSE MKT (“NYSE MKT”) or the NASDAQ Capital Market (“NASDAQ”) under the symbol “MMG” after we register our common stock under the Securities Exchange Act of 1934, as amended (“Exchange Act”), following the termination of this offering. There is no assurance that our common stock will be registered under the Exchange Act or, if registered under the Exchange Act, that the application will be approved by the NYSE MKT or the NASDAQ. If not approved by the NYSE MKT or NASDAQ, we intend to apply for quotation of our common stock on the OTCQX Marketplace under the symbol “MMG” after the termination of this offering.
Transfer Agent and Registrar	Interwest Transfer Company, Inc. will be our transfer agent and registrar in connection with the Offering.
Dividends	Our ability to pay dividends depends on both our achievement of positive cash flow and our board of directors’ discretion in declaring dividends. The order and priority of our dividends is further described in “Description of Capital Stock – Dividends.”

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table presents our summary historical consolidated financial data for the periods indicated. The summary historical consolidated financial data for the years ended December 31, 2015 and December 31, 2014 and the balance sheet data as of December 31, 2015 and December 31, 2014 are derived from the audited financial statements. The summary historical financial data for the six months ended June 30, 2016 and June 30, 2015 and the balance sheet data as of June 30, 2016 and June 30, 2015 are derived from our unaudited financial statements.

Historical results are included for illustrative and informational purposes only and are not necessarily indicative of results we expect in future periods, and results of interim periods are not necessarily indicative of results for the entire year. You should read the following summary financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes appearing elsewhere in this Offering Circular. 

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		Combined Successor & Predecessor		Predecessor		Successor			Combined Successor & Predecessor
Statement of Operations Data		For the Year Ended December 31,				For the Six Months Ended June 30,
		2015		2014		2016			2015
						(unaudited)
Revenues	$	3,124,823		$	2,980,877	$	1,917,540		$	1,503,743
Operating Costs and Expenses		4,028,118			2,852,965		2,991,806			1,609,650
(Loss) Income from Operations		(903,295	)		127,912		(1,074,266	)		(105,907	)
Total Other (Expense) Income		899			4,995		(65,720	)		224
Net Loss before Taxes		(902,396	)		132,907		(1,139,986	)		(105,683	)
Income tax provision		(119,245	)		-		(63,641	)		(54,991	)
Net (Loss) Income		(1,021,641	)		132,907		(1,203,627	)		(160,674	)
Net loss attributable to the  non-controlling interests		(226,718	)		-		(302,702	)		(11,132	)
Net (Loss) Income Attributable to  Controlling Interest	$	(794,923	)	$	132,907	$	(900,925	)	$	(149,542	)
Net Loss Attributable to Controlling Interest Per Share:		(0.02	)		N/A	$	(0.02	)	$	(0.00	)

										Combined
										Successor &
	Successor			Predecessor			Successor			Predecessor
	December 31,			December 31,			June 30,			June 30,
Balance Sheet Data (at period end)	2015			2014			2016			2015
								(unaudited)			(unaudited)
Cash and cash equivalents	$	409,563		$	40,319		$	648,671		$	141,406
Working capital	$	(61,507	)	$	(910,941	)	$	(355,734	)	$	(453,147	)
Total assets	$	8,138,370		$	6,947		$	8,838,613		$	7,301,306
Total liabilities	$	2,227,070		$	1,193,380		$	4,130,940		$	1,525,563
Stockholders’ equity (deficit)	$	5,911,300		$	(846,433	)	$	4,707,673		$	5,775,743

1) Working capital represents total current assets less total current liabilities.

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RISK FACTORS

An investment in our Offered Shares is highly speculative and is suitable only for persons or entities that are able to evaluate the risks of the investment. An investment in our Offered Shares should be made only by persons or entities able to bear the risk of and to withstand the total loss of their investment. Prospective investors should consider the following risks before making a decision to purchase our Offered Shares. To the best of our knowledge, we have included all material risks

Risks Related to Our Business and Industry

We are vulnerable to changes in consumer preferences and economic conditions that could harm our business, financial condition, results of operations and cash flow.

Food service businesses depend on consumer discretionary spending and are often affected by changes in consumer tastes, national, regional and local economic conditions and demographic trends. Factors such as traffic patterns, weather, fuel prices, local demographics and the type, number and locations of competing restaurants may adversely affect the performances of individual locations. In addition, economic downturns, inflation or increased food or energy costs could harm the restaurant industry in general and our locations in particular. Adverse changes in any of these factors could reduce consumer traffic or impose practical limits on pricing that could harm our business, financial condition, results of operations and cash flow. There can be no assurance that consumers will continue to regard healthy-inspired fast food favorably or that we will be able to develop new menu items that appeal to consumer preferences. Our business, financial condition and results of operations depend in part on our ability to anticipate, identify and respond to changing consumer preferences and economic conditions. In addition, the restaurant industry is currently under heightened legal and legislative scrutiny related to menu labeling and resulting from the perception that the practices of restaurant companies have contributed to nutritional, caloric intake, obesity or other health concerns of their guests. If we are unable to adapt to changes in consumer preferences and trends, we may lose customers and our revenues may decline.

Our growth strategy depends in part on opening new restaurants in existing and new markets and expanding our franchise system. We may be unsuccessful in opening new company-operated or franchised restaurants or establishing new markets, which could adversely affect our growth.

One of the key means to achieving our growth strategy will be through opening new restaurants and operating those restaurants on a profitable basis. We opened one new company-operated restaurant in fiscal 2015 in Springfield, NJ, six new company-operated restaurants in fiscal 2016 in Columbia, NY, Ft. Bliss, TX, Gramercy, NY, Irvine, CA, Santa Monica, CA and Tribeca, NY and plan to open 15 to 20 new company-operated restaurants in fiscal 2017. Our franchisees opened seven and four new franchise operated restaurants in fiscal 2015 and fiscal 2016, respectively, and plan to open 15 in fiscal 2017. Our ability to open new restaurants is dependent upon a number of factors, many of which are beyond our control, including our and our franchisees’ ability to:

● identify available and suitable restaurant sites;

● compete for restaurant sites;

● reach acceptable agreements regarding the lease or purchase of locations;

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● obtain or have available the financing required to acquire and operate a restaurant, including construction and opening costs, which includes access to build-to-suit leases and equipment financing leases at favorable interest and capitalization rates;

● respond to unforeseen engineering or environmental problems with leased premises;

● avoid the impact of inclement weather, natural disasters and other calamities;

● hire, train and retain the skilled management and other employees necessary to meet staffing needs;

● obtain, in a timely manner and for an acceptable cost, required licenses, permits and regulatory approvals and respond effectively to any changes in local, state or federal law and regulations that adversely affect our and our franchisees’ costs or ability to open new restaurants; and

● control construction and equipment cost increases for new restaurants.

There is no guarantee that a sufficient number of suitable restaurant sites will be available in desirable areas or on terms that are acceptable to us in order to achieve our growth plan. If we are unable to open new restaurants or sign new franchisees, or if existing franchisees do not open new restaurants, or if restaurant openings are significantly delayed, our revenues or earnings growth could be adversely affected and our business negatively affected.

As part of our longer term growth strategy, we may enter into geographic markets in which we have little or no prior operating or franchising experience through company-operated restaurant growth and through franchise development agreements. The challenges of entering new markets include: difficulties in hiring experienced personnel; unfamiliarity with local real estate markets and demographics; consumer unfamiliarity with our brand; and different competitive and economic conditions, consumer tastes and discretionary spending patterns that are more difficult to predict or satisfy than in our existing markets. Consumer recognition of our brand has been important in the success of company-operated and franchised restaurants in our existing markets. Restaurants we open in new markets may take longer to reach expected sales and profit levels on a consistent basis and may have higher construction, occupancy and operating costs than existing restaurants, thereby affecting our overall profitability. Any failure on our part to recognize or respond to these challenges may adversely affect the success of any new restaurants. Expanding our franchise system could require the implementation, expense and successful management of enhanced business support systems, management information systems and financial controls as well as additional staffing, franchise support and capital expenditures and working capital.

Due to brand recognition and logistical synergies, as part of our growth strategy, we also intend to open new restaurants in areas where we have existing restaurants. The operating results and comparable restaurant sales for our restaurants could be adversely affected due to close proximity with our other restaurants and market saturation.

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New restaurants, once opened, may not be profitable or may close, and the increases in average restaurant revenues and comparable restaurant sales that we have experienced in the past may not be indicative of future results.

Some of our restaurants open with an initial start-up period of higher than normal sales volumes, which subsequently decrease to stabilized levels. In new markets, the length of time before average sales for new restaurants stabilize is less predictable and can be longer as a result of our limited knowledge of these markets and consumers’ limited awareness of our brand. In addition, our average restaurant revenues and comparable restaurant sales may not increase at the rates achieved over the past several years. Our ability to operate new restaurants profitably and increase average restaurant revenues and comparable restaurant sales will depend on many factors, some of which are beyond our control, including:

● consumer awareness and understanding of our brand;

● general economic conditions, which can affect restaurant traffic, local labor costs and prices we pay for the food products and other supplies we use;

● consumption patterns and food preferences that may differ from region to region;

● changes in consumer preferences and discretionary spending;

● difficulties obtaining or maintaining adequate relationships with distributors or suppliers in new markets;

● increases in prices for commodities, including proteins;

● inefficiency in our labor costs as the staff gains experience;

● competition, either from our competitors in the restaurant industry or our own restaurants;

● temporary and permanent site characteristics of new restaurants;

● changes in government regulation; and

● other unanticipated increases in costs, any of which could give rise to delays or cost overruns.

If our new restaurants do not perform as planned or close, our business and future prospects could be harmed. In addition, an inability to achieve our expected average restaurant revenues would have a material adverse effect on our business, financial condition and results of operations.

Opening new restaurants in existing markets may negatively impact sales at our and our franchisees’ existing restaurants.

The consumer target area of our and our franchisees’ restaurants varies by location, depending on a number of factors, including population density, other local retail and business attractions, area demographics and geography. As a result, the opening of a new restaurant in or near markets in which we or our franchisees’ already have restaurants could adversely impact sales at these existing restaurants. Existing restaurants could also make it more difficult to build our and our franchisees’ consumer base for a new restaurant in the same market. Our core business strategy does not entail opening new restaurants that we believe will materially affect sales at our or our franchisees’ existing restaurants. However, we cannot guarantee there will not be significant impact in some cases and we may selectively open new restaurants in and around areas of existing restaurants that are operating at or near capacity to effectively serve our customers. Sales cannibalization between our restaurants may become significant in the future as we continue to expand our operations and could affect our sales growth, which could, in turn, materially and adversely affect our business, financial condition and results of operations.

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Our sales growth and ability to achieve profitability could be adversely affected if comparable restaurant sales are less than we expect.

The level of comparable restaurant sales, which reflect the change in year-over-year sales for restaurants in the fiscal month following 15 months of operation using a mid-month convention, will affect our sales growth and will continue to be a critical factor affecting our ability to generate profits because the profit margin on comparable restaurant sales is generally higher than the profit margin on new restaurant sales. Our ability to increase comparable restaurant sales depends in part on our ability to successfully implement our initiatives to build sales. It is possible such initiatives will not be successful, that we will not achieve our target comparable restaurant sales growth or that the change in comparable restaurant sales could be negative, which may cause a decrease in sales growth and ability to achieve profitability that would have a material adverse effect on our business, financial condition and results of operations.

Our marketing programs may not be successful, and our new menu items, advertising campaigns and restaurant designs and remodels may not generate increased sales or profits.

We incur costs and expend other resources in our marketing efforts on new menu items, advertising campaigns and restaurant designs and remodels to raise brand awareness and attract and retain customers. These initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues. Additionally, some of our competitors have greater financial resources, which enable them to spend significantly more on marketing and advertising and other initiatives than we are able to. Should our competitors increase spending on marketing and advertising and other initiatives or our marketing funds decrease for any reason, or should our advertising, promotions, new menu items and restaurant designs and remodels be less effective than our competitors, there could be a material adverse effect on our results of operations and financial condition.

Changes in food and supply costs or failure to receive frequent deliveries of food ingredients and other supplies could have an adverse effect on our business, financial condition and results of operations.

Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs, and our ability to maintain our menu depends in part on our ability to acquire ingredients that meet specifications from reliable suppliers. Shortages or interruptions in the availability of certain supplies caused by unanticipated demand, problems in production or distribution, food contamination, inclement weather or other conditions could adversely affect the availability, quality and cost of our ingredients, which could harm our operations. Any increase in the prices of the food products most critical to our menu, such as chicken, seafood, beef, fresh produce, soybean oil and other proteins, could have a material adverse effect on our results of operations. Although we try to manage the impact that these fluctuations have on our operating results, we remain susceptible to increases in food costs as a result of factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety concerns, generalized infectious diseases, product recalls and government regulations. Therefore, material increases in the prices of the ingredients most critical to our menu could adversely affect our operating results or cause us to consider changes to our product delivery strategy and adjustments to our menu pricing.

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If any of our distributors or suppliers perform inadequately, or our distribution or supply relationships are disrupted for any reason, there could be a material adverse effect on our business, financial condition, results of operations or cash flows. Although we often enter into contracts for the purchase of food products and supplies, we do not have long-term contracts for the purchase of all such food products and supplies. As a result, we may not be able to anticipate or react to changing food costs by adjusting our purchasing practices or menu prices, which could cause our operating results to deteriorate. If we cannot replace or engage distributors or suppliers who meet our specifications in a short period of time, that could increase our expenses and cause shortages of food and other items at our restaurants, which could cause a restaurant to remove items from its menu. If that were to happen, affected restaurants could experience significant reductions in sales during the shortage or thereafter, if customers change their dining habits as a result. In addition, although we provide modestly priced food, we may choose not to, or may be unable to, pass along commodity price increases to consumers, including price increases with respect to ground beef. These potential changes in food and supply costs could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to compete successfully with other quick-service and fast-casual restaurants. Intense competition in the restaurant industry could make it more difficult to expand our business and could also have a negative impact on our operating results if customers favor our competitors or we are forced to change our pricing and other marketing strategies.

The food service industry, and particularly its quick-service and fast-casual segments, is intensely competitive. We expect competition in each of our markets to continue to be intense because consumer trends are favoring limited service restaurants that offer healthier menu items made with better quality products, and many limited service restaurants are responding to these trends. Competition in our industry is primarily based on price, convenience, quality of service, brand recognition, restaurant location and type and quality of food. If our company-operated and franchised restaurants cannot compete successfully with other quick-service and fast-casual restaurants in new and existing markets, we could lose customers and our revenues could decline. Our company-operated and franchised restaurants compete with national and regional quick-service and fast-casual restaurant chains for customers, restaurant locations and qualified management and other staff. Compared with us, some of our competitors have substantially greater financial and other resources, have been in business longer, have greater brand recognition or are better established in the markets where our restaurants are located or are planned to be located. Any of these competitive factors may materially adversely affect our business, financial condition or results of operations.

Failure to manage our growth effectively could harm our business and operating results.

Our growth plan includes opening a significant number of new restaurants. Our existing restaurant management systems, financial and management controls and information systems may be inadequate to support our planned expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain managers and team members. We may not respond quickly enough to the changing demands that our expansion will impose on our management, restaurant teams and existing infrastructure, which could harm our business, financial condition and results of operations.

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The planned rapid increase in the number of our restaurants may make our future results unpredictable.

We plan to open 10 to 20 new company-operated restaurants and 10 to 32 new franchise operated restaurants in fiscal 2017. We intend to continue to increase the number of our restaurants in the next several years. This growth strategy and the substantial investment associated with the development of each new restaurant may cause our operating results to fluctuate unpredictably or have an adverse effect on our profits. In addition, we may find that our restaurant concept has limited appeal in new markets or we may experience a decline in the popularity of our restaurant concept in the markets in which we operate. Newly opened restaurants or our future markets and restaurants may not be successful or our system-wide average restaurant revenue may not increase at historical rates, which could have a material adverse effect on our business, financial condition and results of operations.

The financial performance of our franchisees can negatively impact our business.

As 90% of our restaurants are franchised as of June 30, 2016, our financial results are dependent in significant part upon the operational and financial success of our franchisees. We receive royalties, franchise fees, contributions to our marketing development fund and contributions to our national and local co-op advertising funds, and other fees from our franchisees. We have established operational standards and guidelines for our franchisees; however, we have limited control over how our franchisees’ businesses are run. While we are responsible for ensuring the success of our entire system of restaurants and for taking a longer-term view with respect to system improvements, our franchisees have individual business strategies and objectives, which might conflict with our interests. Our franchisees may not be able to secure adequate financing to open or continue operating their Muscle Maker Grill restaurants. If they incur too much debt or if economic or sales trends deteriorate such that they are unable to repay existing debt, our franchisees could experience financial distress or even bankruptcy. We anticipate that we and our franchisees will continue to be financially impacted by the recent health care reform legislation if such legislation is not repealed. If a significant number of franchisees become financially distressed, it could harm our operating results through reduced royalty revenues and the impact on our profitability could be greater than the percentage decrease in the royalty revenues. Closure of franchised restaurants would reduce our royalty revenues and could negatively impact margins, since we may not be able to reduce fixed costs which we continue to incur.

We have limited control with respect to the operations of our franchisees, which could have a negative impact on our business.

Franchisees are independent business operators and are not our employees, and we do not exercise control over the day-to-day operations of their restaurants. We provide training and support to franchisees, and set and monitor operational standards, but the quality of franchised restaurants may be diminished by any number of factors beyond our control. Consequently, franchisees may not successfully operate restaurants in a manner consistent with our standards and requirements, or may not hire and train qualified managers and other restaurant personnel. If franchisees do not operate to our expectations, our image and reputation, and the image and reputation of other franchisees, may suffer materially and system-wide sales could decline significantly, which would reduce our royalty revenues, and the impact on profitability could be greater than the percentage decrease in royalties and fees.

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The challenging economic environment may affect our franchisees, with adverse consequences to us.

We rely in part on our franchisees and the manner in which they operate their locations to develop and promote our business. As of December 31, 2015, our top 6 franchisees operated 10 of our franchised restaurants and accounted for approximately 40% of our royalty revenues in fiscal 2014 and fiscal 2015, respectively. Due to the continuing challenging economic environment, it is possible that some franchisees could file for bankruptcy or become delinquent in their payments to us, which could have a significant adverse impact on our business due to loss or delay in payments of royalties, contributions to our marketing development fund and advertising funds and other fees. Bankruptcies by our franchisees could prevent us from terminating their franchise agreements so that we can offer their territories to other franchisees, negatively impact our market share and operating results as we may have fewer well-performing restaurants, and adversely impact our ability to attract new franchisees.

Although we have developed criteria to evaluate and screen prospective developers and franchisees, we cannot be certain that the developers and franchisees we select will have the business acumen or financial resources necessary to open and operate successful franchises in their franchise areas, and state franchise laws may limit our ability to terminate or modify these franchise arrangements. Moreover, franchisees may not successfully operate restaurants in a manner consistent with our standards and requirements, or may not hire and train qualified managers and other restaurant personnel. The failure of developers and franchisees to open and operate franchises successfully could have a material adverse effect on us, our reputation, our brand and our ability to attract prospective franchisees and could materially adversely affect our business, financial condition, results of operations and cash flows.

Franchisees may not have access to the financial or management resources that they need to open the restaurants contemplated by their agreements with us, or be able to find suitable sites on which to develop them. Franchisees may not be able to negotiate acceptable lease or purchase terms for restaurant sites, obtain the necessary permits and government approvals or meet construction schedules. Any of these problems could slow our growth and reduce our franchise revenues. Additionally, our franchisees typically depend on financing from banks and other financial institutions, which may not always be available to them, in order to construct and open new restaurants. For these reasons, franchisees operating under development agreements may not be able to meet the new restaurant opening dates required under those agreements.

Our system-wide restaurant base is geographically concentrated in the Northeastern United States, and we could be negatively affected by conditions specific to that region.

Our company-operated and franchised restaurants in the Northeastern United States represent approximately 68% of our system-wide restaurants as of December 31, 2015. Our company-operated and franchised restaurants in New Jersey and New York represent approximately 62% of our system-wide restaurants as of December 31, 2015. Approximately 57% of our company-operated restaurants are located in New Jersey and New York. Adverse changes in demographic, unemployment, economic, regulatory or weather conditions in the Northeastern United States have had, and may continue to have, material adverse effects on our business. As a result of our concentration in this market, we have been, and in the future may be, disproportionately affected by these adverse conditions compared to other chain restaurants with a national footprint.

In addition, our competitors could open additional restaurants in New Jersey and New York, where we have significant concentration with over 30 of our system restaurants, which could result in reduced market share for us and may adversely impact our profitability.

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Negative publicity could reduce sales at some or all of our restaurants.

We may, from time to time, be faced with negative publicity relating to food quality, the safety, sanitation and welfare of our restaurant facilities, customer complaints or litigation alleging illness or injury, health inspection scores, integrity of our or our suppliers’ food processing and other policies, practices and procedures, employee relationships and welfare or other matters at one or more of our restaurants. Negative publicity may adversely affect us, regardless of whether the allegations are valid or whether we are held to be responsible. In addition, the negative impact of adverse publicity relating to one restaurant may extend far beyond the restaurant involved, especially due to the high geographic concentration of many of our restaurants, to affect some or all of our other restaurants, including our franchised restaurants. The risk of negative publicity is particularly great with respect to our franchised restaurants because we are limited in the manner in which we can regulate them, especially on a real-time basis and negative publicity from our franchised restaurants may also significantly impact company-operated restaurants. A similar risk exists with respect to food service businesses unrelated to us, if customers mistakenly associate such unrelated businesses with our operations. Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment or wrongful termination may also create not only legal and financial liability but negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be used to benefit the future performance of our operations. These types of employee claims could also be asserted against us, on a co-employer theory, by employees of our franchisees. A significant increase in the number of these claims or an increase in the number of successful claims could materially adversely affect our business, financial condition, results of operations and cash flows.

Food safety and quality concerns may negatively impact our business and profitability, our internal operational controls and standards may not always be met and our employees may not always act professionally, responsibly and in our and our customers’ best interests. Any possible instances of food-borne illness could reduce our restaurant sales.

Incidents or reports of food-borne or water-borne illness or other food safety issues, food contamination or tampering, employee hygiene and cleanliness failures or improper employee conduct at our restaurants could lead to product liability or other claims. Such incidents or reports could negatively affect our brand and reputation as well as our business, revenues and profits. Similar incidents or reports occurring at limited service restaurants unrelated to us could likewise create negative publicity, which could negatively impact consumer behavior towards us.

We cannot guarantee to consumers that our internal controls and training will be fully effective in preventing all food-borne illnesses. Furthermore, our reliance on third-party food processors makes it difficult to monitor food safety compliance and may increase the risk that food-borne illness would affect multiple locations rather than single restaurants. Some food-borne illness incidents could be caused by third-party food suppliers and transporters outside of our control. New illnesses resistant to our current precautions may develop in the future, or diseases with long incubation periods could arise, that could give rise to claims or allegations on a retroactive basis. One or more instances of food-borne illness in one of our company-operated or franchised restaurants could negatively affect sales at all of our restaurants if highly publicized, especially due to the high geographic concentration of many of our restaurants. This risk exists even if it were later determined that the illness was wrongly attributed to one of our restaurants. A number of other restaurant chains have experienced incidents related to food-borne illnesses that have had material adverse impacts on their operations, and we cannot assure you that we could avoid a similar impact upon the occurrence of a similar incident at one of our restaurants. Additionally, even if food-borne illnesses were not identified at our restaurants, our restaurant sales could be adversely affected if instances of food-borne illnesses at other restaurant chains were highly publicized. In addition, our restaurant sales could be adversely affected by publicity regarding other high-profile illnesses such as avian flu that customers may associate with our food products.

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We rely on only one company to distribute substantially all of our food and supplies to company-operated and franchised restaurants, and on a limited number of companies, and, in some cases, a sole company, to supply certain products, supplies and ingredients to our distributor. Failure to receive timely deliveries of food or other supplies could result in a loss of revenues and materially and adversely impact our operations.

Our and our franchisees’ ability to maintain consistent quality menu items and prices significantly depends upon our ability to acquire quality food products from reliable sources in accordance with our specifications on a timely basis. Shortages or interruptions in the supply of food products caused by unanticipated demand, problems in production or distribution, contamination of food products, an outbreak of protein-based diseases, inclement weather or other conditions could materially adversely affect the availability, quality and cost of ingredients, which would adversely affect our business, financial condition, results of operations and cash flows. We have contracts with a limited number of suppliers, and, in some cases, a sole supplier, for certain products, supplies and ingredients. Certain menu items and ingredients are provided to us and our franchisees by single suppliers for various proteins and a single supplier for spices. If that distributor or any supplier fails to perform as anticipated or seeks to terminate agreements with us, or if there is any disruption in any of our supply or distribution relationships for any reason, our business, financial condition, results of operations and cash flows could be materially adversely affected. If we or our franchisees temporarily close a restaurant or remove popular items from a restaurant’s menu due to a supply shortage, that restaurant may experience a significant reduction in revenues during the time affected by the shortage and thereafter if our customers change their dining habits as a result.

The volatile credit and capital markets could have a material adverse effect on our financial condition.

Our ability to manage our debt is dependent on our level of positive cash flow from company-operated and franchised restaurants, net of costs. An economic downturn may negatively impact our cash flows. Credit and capital markets can be volatile, which could make it more difficult for us to refinance our existing debt or to obtain additional debt or equity financings in the future. Such constraints could increase our costs of borrowing and could restrict our access to other potential sources of future liquidity. Our failure to have sufficient liquidity to make interest and other payments required by our debt could result in a default of such debt and acceleration of our borrowings, which would have a material adverse effect on our business and financial condition. The lack of availability or access to build-to-suit leases and equipment financing leases could result in a decreased number of new restaurants and have a negative impact on our growth.

A prolonged economic downturn could materially affect us in the future.

The restaurant industry is dependent upon consumer discretionary spending. The recession from late 2007 to mid-2009 reduced consumer confidence to historic lows, impacting the public’s ability and desire to spend discretionary dollars as a result of job losses, home foreclosures, significantly reduced home values, investment losses, bankruptcies and reduced access to credit, resulting in lower levels of customer traffic and lower average check sizes in fast casual restaurants, similar to ours. If the economy experiences another significant decline, our business and results of operations could be materially adversely affected and may result in a deceleration of the number and timing of new restaurant openings by us and our franchisees. Deterioration in customer traffic or a reduction in average check size would negatively impact our revenues and profitability and could result in reductions in staff levels, additional impairment charges and potential restaurant closures.

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The interests of our franchisees may conflict with ours or yours in the future and we could face liability from our franchisees or related to our relationship with our franchisees.

Franchisees, as independent business operators, may from time to time disagree with us and our strategies regarding the business or our interpretation of our respective rights and obligations under the franchise agreement and the terms and conditions of the franchisee/franchisor relationship. This may lead to disputes with our franchisees and we expect such disputes to occur from time to time in the future as we continue to offer franchises. Such disputes may result in legal action against us. To the extent we have such disputes, the attention, time and financial resources of our management and our franchisees will be diverted from our restaurants, which could have a material adverse effect on our business, financial condition, results of operations and cash flows even if we have a successful outcome in the dispute.

In addition, various state and federal laws govern our relationship with our franchisees and our potential sale of a franchise. A franchisee and/or a government agency may bring legal action against us based on the franchisee/franchisor relationships that could result in the award of damages to franchisees and/or the imposition of fines or other penalties against us.

Information technology system failures or breaches of our network security could interrupt our operations and adversely affect our business.

We and our franchisees rely on our computer systems and network infrastructure across our operations, including point-of-sale processing at our restaurants. Our and our franchisees’ operations depend upon our and our franchisees’ ability to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, viruses and other disruptive problems. Any damage or failure of our computer systems or network infrastructure that causes an interruption in our operations could have a material adverse effect on our business and subject us or our franchisees to litigation or to actions by regulatory authorities.

We are continuing to expand, upgrade and develop our information technology capabilities. If we are unable to successfully upgrade or expand our technological capabilities, we may not be able to take advantage of market opportunities, manage our costs and transactional data effectively, satisfy customer requirements, execute our business plan or respond to competitive pressures.

If we or our franchisees are unable to protect our customers’ credit and debit card data, we could be exposed to data loss, litigation, liability and reputational damage.

In connection with credit and debit card sales, we and our franchisees transmit confidential credit and debit card information by way of secure private retail networks. Although we and our franchisees use private networks, third parties may have the technology or know-how to breach the security of the customer information transmitted in connection with credit and debit card sales, and our and our franchisees’ security measures and those of our and our franchisees’ technology vendors may not effectively prohibit others from obtaining improper access to this information. If a person were able to circumvent these security measures, he or she could destroy or steal valuable information or disrupt our and our franchisees’ operations. Any security breach could expose us and our franchisees to risks of data loss, litigation and liability and could seriously disrupt our and our franchisees’ operations and any resulting negative publicity could significantly harm our reputation.

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The failure to enforce and maintain our trademarks and protect our other intellectual property could materially adversely affect our business, including our ability to establish and maintain brand awareness.

We have registered Muscle Maker Grill^® and certain other names used by our restaurants as trademarks or service marks with the United States Patent and Trademark Office. The Muscle Maker Grill^® trademark is also registered in some form in one foreign country. Our current brand campaign, “Great Food with Your Health in Mind” has also been approved for registration with the United States Patent and Trademark Office. In addition, the Muscle Maker Grill logo, website name and address (www.musclemakergrill.com) and Facebook and Twitter accounts are our intellectual property. The success of our business strategy depends on our continued ability to use our existing trademarks and service marks in order to increase brand awareness and develop our branded products. If our efforts to protect our intellectual property are not adequate, or if any third-party misappropriates or infringes on our intellectual property, whether in print, on the Internet or through other media, the value of our brands may be harmed, which could have a material adverse effect on our business, including the failure of our brands and branded products to achieve and maintain market acceptance. There can be no assurance that all of the steps we have taken to protect our intellectual property in the United States and in foreign countries will be adequate. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States.

We or our suppliers maintain the seasonings and additives for our food offerings, as well as certain standards, specifications and operating procedures, as trade secrets or confidential information. We may not be able to prevent the unauthorized disclosure or use of our trade secrets or information, despite the existence of confidentiality agreements and other measures. While we try to ensure that the quality of our brand and branded products is maintained by all of our franchisees, we cannot be certain that these franchisees will not take actions that adversely affect the value of our intellectual property or reputation. If any of our trade secrets or information were to be disclosed to or independently developed by a competitor, our business, financial condition and results of operations could be materially adversely affected.

Third-party claims with respect to intellectual property assets, if decided against us, may result in competing uses or require adoption of new, non-infringing intellectual property, which may in turn adversely affect sales and revenues.

There can be no assurance that third parties will not assert infringement or misappropriation claims against us, or assert claims that our rights in our trademarks, service marks, trade dress and other intellectual property assets are invalid or unenforceable. Any such claims could have a material adverse effect on us or our franchisees if such claims were to be decided against us. If our rights in any intellectual property were invalidated or deemed unenforceable, it could permit competing uses of intellectual property which, in turn, could lead to a decline in restaurant revenues. If the intellectual property became subject to third-party infringement, misappropriation or other claims, and such claims were decided against us, we may be forced to pay damages, be required to develop or adopt non-infringing intellectual property or be obligated to acquire a license to the intellectual property that is the subject of the asserted claim. There could be significant expenses associated with the defense of any infringement, misappropriation, or other third-party claims.

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We depend on our executive officers, the loss of whom could materially harm our business.

We rely upon the accumulated knowledge, skills and experience of our executive officers and significant employees. Our executive officers and significant employees have cumulative experience of more than 100 years in the food service industry. If they were to leave us or become incapacitated, we might suffer in our planning and execution of business strategy and operations, impacting our brand and financial results. We also do not maintain any key man life insurance policies for any of our employees.

Matters relating to employment and labor law may adversely affect our business.

Various federal and state labor laws govern our relationships with our employees and affect operating costs. These laws include employee classifications as exempt or non-exempt, minimum wage requirements, unemployment tax rates, workers’ compensation rates, citizenship requirements and other wage and benefit requirements for employees classified as non-exempt. Significant additional government regulations and new laws, including mandating increases in minimum wages, changes in exempt and non-exempt status, or mandated benefits such as health insurance could materially affect our business, financial condition, operating results or cash flow. Furthermore, if our or our franchisees’ employees unionize, it could materially affect our business, financial condition, operating results or cash flow.

We are also subject in the ordinary course of business to employee claims against us based, among other things, on discrimination, harassment, wrongful termination, or violation of wage and labor laws. Such claims could also be asserted against us by employees of our franchisees. Moreover, claims asserted against franchisees may at times be made against us as a franchisor. These claims may divert our financial and management resources that would otherwise be used to benefit our operations. The ongoing expense of any resulting lawsuits, and any substantial settlement payment or damage award against us, could adversely affect our business, brand image, employee recruitment, financial condition, operating results or cash flows.

In addition, various states in which we operate are considering or have already adopted new immigration laws or enforcement programs, and the U.S. Congress and Department of Homeland Security from time to time consider and may implement changes to federal immigration laws, regulations or enforcement programs as well. Some of these changes may increase our obligations for compliance and oversight, which could subject us to additional costs and make our hiring process more cumbersome, or reduce the availability of potential employees. Although we require all workers to provide us with government-specified documentation evidencing their employment eligibility, some of our employees may, without our knowledge, be unauthorized workers. We currently participate in the “E-Verify” program, an Internet-based, free program run by the United States government to verify employment eligibility, in states in which participation is required. However, use of the “E-Verify” program does not guarantee that we will properly identify all applicants who are ineligible for employment. Unauthorized workers are subject to deportation and may subject us to fines or penalties, and if any of our workers are found to be unauthorized we could experience adverse publicity that negatively impacts our brand and may make it more difficult to hire and keep qualified employees. Termination of a significant number of employees who were unauthorized employees may disrupt our operations, cause temporary increases in our labor costs as we train new employees and result in additional adverse publicity. We could also become subject to fines, penalties and other costs related to claims that we did not fully comply with all recordkeeping obligations of federal and state immigration compliance laws. These factors could have a material adverse effect on our business, financial condition and results of operations.

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Restaurant companies have been the target of class action lawsuits and other proceedings alleging, among other things, violations of federal and state workplace and employment laws. Proceedings of this nature are costly, divert management attention and, if successful, could result in our payment of substantial damages or settlement costs.

Our business is subject to the risk of litigation by employees, consumers, suppliers, franchisees, stockholders or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. The outcome of litigation, particularly class action and regulatory actions, is difficult to assess or quantify. In recent years, restaurant companies, including us, have been subject to lawsuits, including lawsuits, alleging violations of federal and state laws regarding workplace and employment conditions, discrimination and similar matters. A number of these lawsuits have resulted in the payment of substantial damages by the defendants. Similar lawsuits have been instituted from time to time alleging violations of various federal and state wage and hour laws regarding, among other things, employee meal deductions, overtime eligibility of managers and failure to pay for all hours worked. Though we do not believe any lawsuits in which we are currently involved will have a material adverse effect on our financial position, results of operations, liquidity or capital resources, we may in the future be subject to lawsuits that could have such an effect.

Occasionally, our customers file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to one of our restaurants, including actions seeking damages resulting from food-borne illness or accidents in our restaurants. We are also subject to a variety of other claims from third parties arising in the ordinary course of our business, including contract claims. The restaurant industry has also been subject to a growing number of claims that the menus and actions of restaurant chains have led to the obesity of certain of their customers. We may also be subject to lawsuits from our employees, the U.S. Equal Employment Opportunity Commission or others alleging violations of federal and state laws regarding workplace and employment conditions, discrimination and similar matters.

Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from our operations and result in increases in our insurance premiums. In addition, they may generate negative publicity, which could reduce customer traffic and sales. Although we maintain what we believe to be adequate levels of insurance, insurance may not be available at all or in sufficient amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance coverage for any claims or any adverse publicity resulting from claims could adversely affect our business and results of operations.

If we or our franchisees face labor shortages or increased labor costs, our results of operations and our growth could be adversely affected.

Labor is a primary component in the cost of operating our company-operated and franchised restaurants. If we or our franchisees face labor shortages or increased labor costs because of increased competition for employees, higher employee-turnover rates, unionization of restaurant workers, or increases in the federally-mandated or state-mandated minimum wage, change in exempt and non-exempt status, or other employee benefits costs (including costs associated with health insurance coverage or workers’ compensation insurance), our and our franchisees’ operating expenses could increase and our growth could be adversely affected.

We have a substantial number of hourly employees who are paid wage rates at or based on the applicable federal or state minimum wage and increases in the minimum wage will increase our labor costs and the labor costs of our franchisees. The federal minimum wage has been $7.25 per hour since July 24, 2009. Federally-mandated, state-mandated or locally-mandated minimum wages may be raised in the future. We may be unable to increase our menu prices in order to pass future increased labor costs on to our customers, in which case our margins would be negatively affected. Also, reduced margins of franchisees could make it more difficult to sell franchises. If menu prices are increased by us and our franchisees to cover increased labor costs, the higher prices could adversely affect transactions which could lower sales and thereby reduce our margins and the royalties that we receive from franchisees.

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In addition, our success depends in part upon our and our franchisees’ ability to attract, motivate and retain a sufficient number of well-qualified restaurant operators, management personnel and other employees. Qualified individuals needed to fill these positions can be in short supply in some geographic areas. In addition, limited service restaurants have traditionally experienced relatively high employee turnover rates. Although we have not yet experienced any significant problems in recruiting employees, our and our franchisees’ ability to recruit and retain such individuals may delay the planned openings of new restaurants or result in higher employee turnover in existing restaurants, which could increase our and our franchisees’ labor costs and have a material adverse effect on our business, financial condition, results of operations or cash flows. If we or our franchisees are unable to recruit and retain sufficiently qualified individuals, our business and our growth could be adversely affected. Competition for these employees could require us or our franchisees to pay higher wages, which could also result in higher labor costs.

We are locked into long-term and non-cancelable leases and may be unable to renew leases at the end of their terms.

Many of our restaurant leases are non-cancelable and typically have initial terms up to between 5 and 10 years and 1-3 renewal terms of 5 years each that we may exercise at our option. Even if we close a restaurant, we are required to perform our obligations under the applicable lease, which could include, among other things, a provision for a closed restaurant reserve when the restaurant is closed, which would impact our profitability, and payment of the base rent, property taxes, insurance and maintenance for the balance of the lease term. In addition, in connection with leases for restaurants that we will continue to operate, we may, at the end of the lease term and any renewal period for a restaurant, be unable to renew the lease without substantial additional cost, if at all. As a result, we may close or relocate the restaurant, which could subject us to construction and other costs and risks. Additionally, the revenues and profit, if any, generated at a relocated restaurant may not equal the revenues and profit generated at the existing restaurant

We and our franchisees are subject to extensive government regulations that could result in claims leading to increased costs and restrict our ability to operate or sell franchises.

We and our franchisees are subject to extensive government regulation at the federal, state and local government levels. These include, but are not limited to, regulations relating to the preparation and sale of food, zoning and building codes, franchising, land use and employee, health, sanitation and safety matters. We and our franchisees are required to obtain and maintain a wide variety of governmental licenses, permits and approvals. Difficulty or failure in obtaining them in the future could result in delaying or canceling the opening of new restaurants. Local authorities may suspend or deny renewal of our governmental licenses if they determine that our operations do not meet the standards for initial grant or renewal. This risk would be even higher if there were a major change in the licensing requirements affecting our types of restaurants.

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We are subject to the U.S. Americans with Disabilities Act (the “ADA”) and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas, including our restaurants. We may in the future have to modify restaurants by adding access ramps or redesigning certain architectural fixtures, for example, to provide service to or make reasonable accommodations for disabled persons. The expenses associated with these modifications could be material.

Our operations are also subject to the U.S. Occupational Safety and Health Act, which governs worker health and safety, the U.S. Fair Labor Standards Act, which governs such matters as minimum wages and overtime, the U.S. Immigration Reform and Control Act of 1986, and a variety of similar federal, state and local laws that govern these and other employment law matters. We and our franchisees may also be subject to lawsuits from our employees, the U.S. Equal Employment Opportunity Commission or others alleging violations of federal and state laws regarding workplace and employment matters, discrimination and similar matters, and we have been a party to such matters in the past. In addition, federal, state and local proposals related to paid sick leave or similar matters could, if implemented, have a material adverse effect on our business, financial condition and results of operations.

The Patient Protection and Affordable Care Act of 2010 (the “PPACA”) requires employers such as us to provide adequate and affordable health insurance for all qualifying employees or pay a monthly per-employee fee or penalty for non-compliance beginning in fiscal 2015. We began to offer such health insurance benefits on January 1, 2015 to all eligible employees, and may incur substantial additional expense due to organizing and maintaining the plan which we anticipate will be more expensive on a per person basis and for an increased number of employees who we anticipate at other times may elect to obtain coverage through a healthcare plan that we partially subsidize. If we fail to offer such benefits, or the benefits that we elect to offer do not meet the applicable requirements, we may incur penalties. Since the PPACA also requires individuals to obtain coverage or face individual penalties, employees who are currently eligible but elect not to participate in our healthcare plans may find it more advantageous to do so when such individual penalties increase in size. It is also possible that by making changes or failing to make changes in the healthcare plans offered by us, we will become less competitive in the market for our labor. Finally, implementing the requirements of the PPACA is likely to impose additional administrative costs. The costs and other effects of these new healthcare requirements cannot be determined with certainty, but they may significantly increase our healthcare coverage costs and could have a material adverse effect on our business, financial condition and results of operations.

There is also a potential for increased regulation of certain food establishments in the United States, where compliance with a Hazard Analysis and Critical Control Points (“HACCP”) approach would be required. HACCP refers to a management system in which food safety is addressed through the analysis and control of potential hazards from production, procurement and handling, to manufacturing, distribution and consumption of the finished product. Many states have required restaurants to develop and implement HACCP Systems, and the United States government continues to expand the sectors of the food industry that must adopt and implement HACCP programs. For example, the Food Safety Modernization Act (the “FSMA”), signed into law in January 2011, granted the U.S. Food and Drug Administration (the “FDA”) new authority regarding the safety of the entire food system, including through increased inspections and mandatory food recalls. Although restaurants are specifically exempted from or not directly implicated by some of these new requirements, we anticipate that the new requirements may impact our industry. Additionally, our suppliers may initiate or otherwise be subject to food recalls that may impact the availability of certain products, result in adverse publicity or require us to take actions that could be costly for us or otherwise impact our business.

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We are also subject to regulation by the Federal Trade Commission and subject to state laws that govern the offer, sale, renewal and termination of franchises and our relationship with our franchisees. The failure to comply with these laws and regulations in any jurisdiction or to obtain required approvals could result in a ban or temporary suspension on franchise sales, fines or the requirement that we make a rescission offer to franchisees, any of which could affect our ability to open new restaurants in the future and thus could materially adversely affect our business and operating results. Any such failure could also subject us to liability to our franchisees.

Compliance with environmental laws may negatively affect our business.

We are subject to federal, state and local laws and regulations, including those concerning waste disposal, pollution, protection of the environment, and the presence, discharge, storage, handling, release and disposal of, and exposure to, hazardous or toxic substances. These environmental laws provide for significant fines and penalties for non-compliance and liabilities for remediation, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of hazardous toxic substances. Third parties may also make claims against owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such hazardous or toxic substances at, on or from our restaurants. Environmental conditions relating to the presence of hazardous substances at prior, existing or future restaurant sites could materially adversely affect our business, financial condition and results of operations. Further, environmental laws and regulations, and the administration, interpretation and enforcement thereof, are subject to change and may become more stringent in the future, each of which could materially adversely affect our business, financial condition and results of operations.

Legislation and regulations requiring the display and provision of nutritional information for our menu offerings, and new information or attitudes regarding diet and health or adverse opinions about the health effects of consuming our menu offerings, could affect consumer preferences and negatively impact our results of operations.

Government regulation and consumer eating habits may impact our business as a result of changes in attitudes regarding diet and health or new information regarding the health effects of consuming our menu offerings, including our buttermilk biscuits, legendary sweet tea and bone-in fried chicken. These changes have resulted in, and may continue to result in, the enactment of laws and regulations that impact the ingredients and nutritional content of our menu offerings, or laws and regulations requiring us to disclose the nutritional content of our food offerings.

The PPACA establishes a uniform, federal requirement for certain restaurants to post certain nutritional information on their menus. Specifically, the PPACA amended the Federal Food, Drug and Cosmetic Act to, as of December 1, 2015, require chain restaurants with 20 or more locations operating under the same name and offering substantially the same menus to publish the total number of calories of standard menu items on menus and menu boards, along with a statement that puts this calorie information in the context of a total daily calorie intake. The PPACA also requires covered restaurants to, as of December 1, 2015, provide to consumers, upon request, a written summary of detailed nutritional information for each standard menu item, and to provide a statement on menus and menu boards about the availability of this information. The PPACA further permits the United States Food and Drug Administration to require covered restaurants to make additional nutrient disclosures, such as disclosure of trans-fat content. An unfavorable report on, or reaction to, our menu ingredients, the size of our portions or the nutritional content of our menu items could negatively influence the demand for our offerings.

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Furthermore, a number of states, counties and cities have enacted menu labeling laws requiring multi-unit restaurant operators to disclose certain nutritional information to customers, or have enacted legislation restricting the use of certain types of ingredients in restaurants.

Compliance with current and future laws and regulations regarding the ingredients and nutritional content of our menu items may be costly and time-consuming. Additionally, if consumer health regulations or consumer eating habits change significantly, we may be required to modify or discontinue certain menu items, and we may experience higher costs associated with the implementation of those changes. Additionally, some government authorities are increasing regulations regarding trans-fats and sodium, which may require us to limit or eliminate trans-fats and sodium in our menu offerings or switch to higher cost ingredients or may hinder our ability to operate in certain markets. Some jurisdictions have banned certain cooking ingredients, such as trans-fats, which a limited number of our menu products contain in small, but measurable amounts, or have discussed banning certain products, such as large sodas. Removal of these products and ingredients from our menus could affect product tastes, customer satisfaction levels, and sales volumes, whereas if we fail to comply with these laws or regulations, our business could experience a material adverse effect.

We cannot make any assurances regarding our ability to effectively respond to changes in consumer health perceptions or our ability to successfully implement the nutrient content disclosure requirements and to adapt our menu offerings to trends in eating habits. The imposition of additional menu-labeling laws could have an adverse effect on our results of operations and financial position, as well as on the restaurant industry in general.

We may become subject to liabilities arising from environmental laws that could likely increase our operating expenses and materially and adversely affect our business and results of operations.

We are subject to federal, state and local laws, regulations and ordinances that:

● govern activities or operations that may have adverse environmental effects, such as discharges to air and water, as well as waste handling and disposal practices for solid and hazardous wastes; and

● impose liability for the costs of cleaning up, and damage resulting from, sites of past spills, disposals or other releases of hazardous materials.

In particular, under applicable environmental laws, we may be responsible for remediation of environmental conditions and may be subject to associated liabilities, including liabilities for clean-up costs and personal injury or property damage, relating to our restaurants and the land on which our restaurants are located, regardless of whether we lease or own the restaurants in question and regardless of whether such environmental conditions were created by us or by a prior owner or tenant. If we are found liable for the costs of remediating contamination at any of our properties, our operating expenses would likely increase and our results of operations would be materially adversely affected. See “Description of Business—Environmental Matters.” Some of our leases provide for indemnification of our landlords for environmental contamination, clean-up or owner liability.

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We are exposed to the risk of natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism that could disrupt business and result in lower sales, increased operating costs and capital expenditures.

Our headquarters, company-operated and franchised restaurant locations, third-party sole distributor and its facilities, as well as certain of our vendors and customers, are located in areas which have been and could be subject to natural disasters such as floods, hurricanes, tornadoes, fires or earthquakes. Adverse weather conditions or other extreme changes in the weather, including resulting electrical and technological failures, especially such events which occur in New Jersey and New York, as a result of the concentration of our restaurants, may disrupt our and our franchisees’ business and may adversely affect our and our franchisees’ ability to obtain food and supplies and sell menu items. Our business may be harmed if our or our franchisees’ ability to obtain food and supplies and sell menu items is impacted by any such events, any of which could influence customer trends and purchases and may negatively impact our and our franchisees’ revenues, properties or operations. Such events could result in physical damage to one or more of our or our franchisees’ properties, the temporary closure of some or all of our company-operated restaurants, franchised restaurants and third-party distributor, the temporary lack of an adequate work force in a market, temporary or long-term disruption in the transport of goods, delay in the delivery of goods and supplies to our company-operated and franchised restaurants and third-party distributor, disruption of our technology support or information systems, or fuel shortages or dramatic increases in fuel prices, all of which would increase the cost of doing business. These events also could have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage. Any of these factors, or any combination thereof, could adversely affect our operations.

Upon the expansion of our operations internationally, we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery and anti-kickback laws.

We anticipate developing and operating corporate-owned and franchised locations located outside the United States. The U.S. Foreign Corrupt Practices Act, and other similar anti-bribery and anti-kickback laws and regulations, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. We cannot assure you that we will be successful in preventing our franchisees or other agents from taking actions in violation of these laws or regulations. Such violations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and cash flows.

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Stock may decline.

As a public company, we would be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Further, we will be required to report any changes in internal controls on a quarterly basis. In addition, we would be required to furnish a report by management on the effectiveness of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. We will design, implement, and test the internal controls over financial reporting required to comply with these obligations. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of the Common Stock could be negatively affected. We also could become subject to investigations by the stock exchange on which the securities are listed, the Commission, or other regulatory authorities, which could require additional financial and management resources.

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As an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.

Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting while we are an emerging growth company. This means that the effectiveness of our financial operations may differ from our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal controls over financial reporting and we are not. While our management will be required to attest to internal control over financial reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the independent registered public accounting firm’s review process in assessing the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging growth company we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting. Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.

We believe we will be considered a smaller reporting company and will be exempt from certain disclosure requirements, which could make our Common Stock less attractive to potential investors.

Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

● had a public float of less than $75 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

● in the case of an initial registration statement under the Securities Act, or the Exchange Act of 1934, as amended, which we refer to as the Exchange Act, for shares of its common equity, had a public float of less than $75 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or

● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero, had annual revenues of less than $50 million during the most recently completed fiscal year for which audited financial statements are available.

As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.

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If we become a public company (reporting under the Exchange Act), we will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

If we become a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act, and rules of the SEC and those of the NASDAQ or the NYSE MKT, whichever is applicable, have imposed various requirements on public companies including requiring establishment and maintenance of effective disclosure and financial controls. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors’ and officers’ liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. In addition, we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting the later of our second annual report on Form 10-K or the first annual report on Form 10-K following the date on which we are no longer an emerging growth company. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by NASDAQ or NYSE MKT, whichever market we are listed on, the SEC or other regulatory authorities, which would require additional financial and management resources.

Our ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely and accurate financial statements. We expect that we will need to continue to improve existing, and implement new operational and financial systems, procedures and controls to manage our business effectively. Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control over financial reporting is effective and to obtain an unqualified report on internal controls from our auditors as required under Section 404 of the Sarbanes-Oxley Act. This, in turn, could have an adverse impact on trading prices for our common stock, and could adversely affect our ability to access the capital markets.

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If we do not become a public company, compliance with Regulation A and reporting to the SEC could be costly, and our management will be required to devote substantial time to the compliance requirements of Regulation A.

If we do not become a public company, compliance with Regulation A could be costly and requires legal and accounting expertise. Because the new rules implementing Title IV of the Jumpstart Our Business Startups Act of 2012 took effect in June 2015, we have no experience complying with the new provisions of Regulation A or making the public filings required by the rule. Besides qualifying this Form 1-A, we must file an annual report on Form 1-K, a semiannual report on Form 1-SA, and current reports on Form 1-U.

Our legal and financial staff may need to be increased in order to comply with Regulation A. Compliance with Regulation A will also require greater expenditures on outside counsel, outside auditors, and financial printers in order to remain in compliance. Failure to remain in compliance with Regulation A may subject us to sanctions, penalties, and reputational damage and would adversely affect our results of operations.

We may not be able to satisfy listing requirements of the NASDAQ or the NYSE MKT, whichever is applicable, to maintain a listing of our Common Stock.

Following the registration of our Common Stock under the Exchange Act following the termination of this offering, if our Common Stock is listed on the NASDAQ or the NYSE MKT, whichever is applicable, we must meet certain financial and liquidity criteria to maintain such listing. If we fail to meet any of the NASDAQ’s or the NYSE MKT’s, whichever is applicable, listing standards, our Common Stock may be delisted. In addition, our board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our Common Stock from the NASDAQ or the NYSE MKT, whichever is applicable, may materially impair our stockholders’ ability to buy and sell our Common Stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our Common Stock. In addition, the delisting of our Common Stock could significantly impair our ability to raise capital.

After the completion of this offering, we intend to become an emerging growth company and subject to less rigorous public reporting requirements and cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.

After the completion of this offering, we expect to become a public reporting company under the Exchange Act, and thereafter publicly report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an “emerging growth company”, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies”, including but not limited to:

● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

● taking advantage of extensions of time to comply with certain new or revised financial accounting standards;

● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We could be an emerging growth company for up to five years, circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700 million, if we issue $1 billion or more in non-convertible debt during a three-year period, or if our annual gross revenues exceed $1 billion. We would cease to be an emerging growth company on the last day of the fiscal year following the date of the fifth anniversary of our first sale of common equity securities under an effective registration statement or a fiscal year in which we have $1 billion in gross revenues (note that the offering of Common Stock pursuant to this Offering Circular will not result in the sale of securities under an effective registration statement). Finally, at any time we may choose to opt-out of the emerging growth company reporting requirements. If we choose to opt out, we will be unable to opt back in to being an emerging growth company.

If we elect not to become a public reporting company under the Exchange Act, we will be required to publicly report on an ongoing basis under the reporting rules set forth in Regulation A for Tier 2 issuers. The ongoing reporting requirements under Regulation A are more relaxed than for “emerging growth companies” under the Exchange Act. The differences include, but are not limited to, being required to file only annual and semiannual reports, rather than annual and quarterly reports. Annual reports are due within 120 calendar days after the end of the issuer’s fiscal year, and semiannual reports are due within 90 calendar days after the end of the first six months of the issuer’s fiscal year.

In either case, we will be subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not “emerging growth companies”, and our stockholders could receive less information than they might expect to receive from more mature public companies.

We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

If our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares.

The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price per share of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not obtain or retain a listing on the NASDAQ or the NYSE MKT, whichever is applicable, and if the price of our Common Stock is less than $5.00 per share, our Common Stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before effecting a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that, before effecting any such transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares.

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FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may have the effect of reducing the level of trading activity in our Common Stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our Common Stock.

Muscle Maker is a holding company with no operations and relies on its operating subsidiaries to provide it with funds necessary to meet its financial obligations and to pay taxes, expenses and dividends.

We are a holding company with no direct operations that will hold as our principal assets a 100% ownership interest in Muscle Maker Brands, LLC (“Muscle Maker Brands”) and will rely on Muscle Maker Brands to provide us with funds necessary to meet any financial obligations. As such, we will have no independent means of generating revenue. Muscle Maker Brands is treated by its members as a partnership for federal and applicable state income tax purposes and, as such, generally is not expected to be subject to income tax (except that it may be required to withhold and remit taxes as a withholding agent). Instead, taxable income will be allocated to us as the sole holder of its limited liability company units (“LLC Units”). Accordingly, we will incur income taxes on any net taxable income of Muscle Maker Brands and will also incur expenses related to our operations. Pursuant to the operating agreement of Muscle Maker Brands (“LLC Agreement”), Muscle Maker Brands will be obligated to make tax distributions to us, as a holder of the LLC Units, subject to the conditions described below. We intend to cause Muscle Maker Brands to make distributions or, in the case of certain expenses, payments in an amount sufficient to allow us to pay our taxes and operating expenses. However, Muscle Maker Brands’ ability to make such distributions and payments to Muscle Maker may be subject to various limitations and restrictions, including the operating results, cash requirements and financial condition of Muscle Maker Brands, the applicable provisions of California law that may limit the amount of funds available for distribution to the members of Muscle Maker Brands, compliance by Muscle Maker Brands and its subsidiaries with restrictions, covenants and financial ratios related to existing or future indebtedness, and other agreements entered into by Muscle Maker Brands or its subsidiaries with third parties. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations (i.e., as a result of Muscle Maker Brands’ inability to make distributions due to various limitations and restrictions), we may have to borrow funds, and thus our liquidity and financial condition could be materially and adversely affected.

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Members of our board of directors and our executive officers will have other business interests and obligations to other entities.

Neither our directors nor our executive officers will be required to manage the Company as their sole and exclusive function and they may have other business interests and may engage in other activities in addition to those relating to the Company, provided that such activities do not compete with the business of the Company or otherwise breach their agreements with the Company. We are dependent on our directors and executive officers to successfully operate our Company. Their other business interests and activities could divert time and attention from operating our business.

Risks Related to Ownership of Our Common Stock, the Offering and Lack of Liquidity

An active trading market for our common stock may not develop and you may not be able to resell your shares at or above the initial offering price.

Prior to this offering, there has been no public market for shares of our common stock. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the initial offering price or at the time that they would like to sell. In addition, we intend to submit a listing application for our common stock to be listed on the NASDAQ Capital Market (“NASDAQ”) or The NYSE MKT (“NYSE MKT”) after we register our common stock under the Securities Exchange Act of 1934, as amended (“Exchange Act”), following the termination of this offering, and there is no guarantee that our common stock will be registered under the Exchange Act or that we can meet the listing standards or that such listing application will be accepted. Even if our common stock is registered under the Exchange Act, such application is accepted and our common stock is listed on the NASDAQ or NYSE MKT, an active trading market for our common stock may never develop, which will adversely impact your ability to sell our shares. If shares of common stock are not eligible for listing on the NASDAQ and NYSE MKT, we intend to apply for quotation of our common stock on the OTCQX Marketplace by the OTC Markets Group, Inc. following the termination of this offering. Even if we obtain quotation on the OTCQX, we do not know the extent to which investor interest will lead to the development and maintenance of a liquid trading market. Purchasers will be required to wait until at least after the final termination date of this offering for such listing, if the shares are registered under the Exchange Act, or quotation. The initial offering price for shares of our common stock will be determined by negotiation between us and our Underwriter. You may not be able to sell your shares of common stock at or above the initial offering price.

The OTCQX, as with other public markets, has from time to time experienced significant price and volume fluctuations. As a result, the market price of shares of our common stock may be similarly volatile, and holders of shares of our common stock may from time to time experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of shares of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this Offering Circular.

No assurance can be given that the market price of shares of our common stock will not fluctuate or decline significantly in the future or that common stockholders will be able to sell their shares when desired on favorable terms, or at all.

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The Company’s stock price may be volatile.

The market price of the Company’s Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various potential factors, many of which will be beyond the Company’s control, including the following:

● services by the Company or its competitors;

● additions or departures of key personnel;

● the Company’s ability to execute its business plan;

● operating results that fall below expectations;

● loss of any strategic relationship;

● industry developments;

● economic and other external factors; and

● period-to-period fluctuations in the Company’s financial results.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s common stock.

This is a fixed price offering and the fixed offering price may not accurately represent the current value of us or our assets at any particular time. Therefore, the purchase price you pay for Offered Shares may not be supported by the value of our assets at the time of your purchase.

This is a fixed price offering, which means that the offering price for our Shares is fixed and will not vary based on the underlying value of our assets at any time. Our board of directors, in consultation with our Underwriter, has determined the offering price in its sole discretion. The fixed offering price for our Shares has not been based on appraisals of any assets we own or may own, or of our Company as a whole, nor do we intend to obtain such appraisals. Therefore, the fixed offering price established for our Shares may not be supported by the current value of our Company or our assets at any particular time.

The entire amount of your purchase price for your Shares will not be available for investment in the Company.

A portion of the offering proceeds will be used to pay selling commissions of six percent (6%) of the offering proceeds to our Underwriter, which it may re-allow and pay to participating broker-dealers, who sell Shares. See “Plan of Distribution.” Thus, a portion of the gross amount of the offering proceeds will not be available for investment in the Company. See “Use of Proceeds.”

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If investors successfully seek rescission, we would face severe financial demands that we may not be able to meet.

Our Shares have not been registered under the Securities Act of 1933, or the Securities Act, and are being offered in reliance upon the exemption provided by Section 3(b) of the Securities Act and Regulation A promulgated thereunder. We represent that this Offering Circular does not contain any untrue statements of material fact or omit to state any material fact necessary to make the statements made, in light of all the circumstances under which they are made, not misleading. However, if this representation is inaccurate with respect to a material fact, if this offering fails to qualify for exemption from registration under the federal securities laws pursuant to Regulation A, or if we fail to register the Shares or find an exemption under the securities laws of each state in which we offer the Shares, each investor may have the right to rescind his, her or its purchase of the Shares and to receive back from the Company his, her or its purchase price with interest. Such investors, however, may be unable to collect on any judgment, and the cost of obtaining such judgment may outweigh the benefits. If investors successfully seek rescission, we would face severe financial demands we may not be able to meet and it may adversely affect any non-rescinding investors.

If our securities are quoted on the OTCQX rather than listed on either of the NASDAQ or NYSE MKT, our securities holders may face significant restrictions on the resale of our securities due to state “Blue Sky” laws.

Each state has its own securities laws, often called “blue sky” laws, which (i) limit sales of securities to a state’s residents unless the securities are registered in that state or qualify for an exemption from registration, and (ii) govern the reporting requirements for broker-dealers doing business directly or indirectly in the state. Before a security is sold in a state, there must be a registration in place to cover the transaction, or the transaction must be exempt from registration. The applicable broker must be registered in that state. We do not know whether our common stock will be registered or exempt from registration under the laws of any state. If our securities are quoted on the OTCQX rather than listed on either of the NASDAQ or NYSE MKT, a determination regarding registration will be made by those broker-dealers, if any, who agree to serve as the market-makers for our common stock. There may be significant state blue sky law restrictions on the ability of investors to sell, and on purchasers to buy, our common stock. You should therefore consider the resale market for our common stock to be limited, as you may be unable to resell your common stock without the significant expense of state registration or qualification.

Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.

The initial public offering price per share will be substantially higher than the pro forma net tangible book value per share of our common stock outstanding prior to this offering. As a result, investors purchasing common stock in this offering will experience immediate dilution of $1.71 per share. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of common stock. In addition, if we issue additional equity securities, you will experience additional dilution.

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Fiduciaries investing the assets of a trust or pension or profit sharing plan must carefully assess an investment in our Company to ensure compliance with ERISA.

In considering an investment in the Company of a portion of the assets of a trust or a pension or profit-sharing plan qualified under Section 401(a) of the Code and exempt from tax under Section 501(a), a fiduciary should consider (i) whether the investment satisfies the diversification requirements of Section 404 of ERISA; (ii) whether the investment is prudent, since the Offered Shares are not freely transferable and there may not be a market created in which the Offered Shares may be sold or otherwise disposed; and (iii) whether interests in the Company or the underlying assets owned by the Company constitute “Plan Assets” under ERISA. See “ERISA Consideration.”

Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.

The market price of shares of our common stock could decline as a result of substantial sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

The principal purposes of this offering are to raise additional capital, to create a public market for our common stock and to facilitate our future access to the public equity markets. We currently intend to use the proceeds we receive from this offering after deducting estimated underwriting discounts and commissions and fees and expenses associated with qualification of Offering under Regulation A, including legal, auditing, accounting, escrow agent, transfer agent, financial printer and other professional fees, primarily for (a) the implementation of our business plan, including but not limited to, (i) opening new corporate stores, (ii) funding possible acquisition opportunities, and (iii) funding a national marketing campaign, and (b) working capital and general corporate purposes. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. Investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds. If we do not use the net proceeds that we receive in this offering effectively, our business, financial condition, results of operations and prospects could be harmed, and the market price of our common stock could decline.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

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USE OF PROCEEDS

We intend to use the net proceeds for the following purposes in the following order: (a) first towards credit card fees of up to approximately $400,000 (2% of the gross proceeds from the Offering); (b) second towards the fees and expenses associated with qualification of Offering under Regulation A of up to $900,000, including legal, auditing, accounting, escrow agent, transfer agent, financial printer and other professional fees; (c) third towards the implementation of our business plan, including but not limited to, (i) opening new corporate stores, (ii) funding possible strategic acquisition opportunities, and (iii) funding a national marketing campaign, and (d) the balance towards working capital and general corporate purposes. In the event that we sell less than the maximum shares offered in the Offering, our first priority is to pay fees associated with the qualification of this Offering under Regulation A. No proceeds will be used to compensate or otherwise make payments to officers or directors except for ordinary payments under employment or consulting agreements.

If all of the Common Stock offered hereunder are purchased, we expect to receive net proceeds from this offering of approximately $18,800,000 after deducting estimated underwriting discounts and commissions in the amount of $1,200,000 (6% of the gross proceeds of the Offering). However, we cannot guarantee that we will sell all of the Common Stock being offered by us. The following table summarizes how we anticipate using the gross proceeds of this Offering, depending upon whether we sell 25%, 50%, 75%, or 100% of the shares being offered in the Offering:

	If 25% of Shares Sold			If 50% of Shares Sold			If 75% of Shares Sold			If 100% of Shares Sold
Gross Proceeds	$	5,000,000		$	10,000,000		$	15,000,000		$	20,000,000
Offering Expenses (Underwriting Discounts and Commissions to Placement Agent and other broker dealers)	($	300,000	)	($	600,000	)	($	900,000	)	($	1,200,000	)
Net Proceeds	$	4,700,000		$	9,400,000		$	14,100,000		$	18,800,000
Our intended use of the net proceeds is as follows:
Credit card fees*	($	100,000	)	($	200,000	)	($	300,000	)	($	400,000	)
Fees for Qualification of Offering under Regulation A (includes legal, auditing, accounting, escrow agent, transfer agent, financial printer and other professional fees)	($	900,000	)	($	900,000	)	($	900,000	)	($	900,000	)
Opening New Corporate Stores		(2,000,000	)		(5,000,000	)		(7,000,000	)		(10,000,000	)
Acquisition Opportunities		(1,300,000	)		(2,300,000	)		(4,400,000	)		(5,600,000	)
National Marketing Campaign		(100,000	)		(200,000	)		(300,000	)		(400,000	)
Working Capital and General Corporate Purposes		(300,000	)		(800,000	)		(1,200,000	)		(1,500,000	)
Total Use of Proceeds	$	5,000,000		$	10,000,000		$	15,000,000		$	20,000,000

*Represents credit card fees associated with subscription agreement transactions.

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CAPITALIZATION

The following table shows:

● Our actual capitalization as of June 30, 2016; and

● Our unaudited capitalization as of June 30, 2016, as adjusted to reflect (i) the receipt of the net proceeds from the sale by us in this offering of shares of common stock, after deducting $2,100,000 in estimated underwriting discounts and commissions, reimbursements to Placement Agent, and estimated offering expenses payable by us, (ii) the issuance of 2,165,240 shares of Common Stock to American Restaurant Holdings in connection with the conversion of the 2015 ARH Note in the principal amount of $1,082,620, (iii) the issuance of 6,554,604 shares of Common Stock to American Restaurant Holdings in connection with the conversion of the 2016 ARH Note in the principal amount of $2,621,842, (iv) the issuance of 2,452,373 shares of Common Stock to American Restaurant Holdings in connection with the conversion of the 2017 ARH Note in the principal amount of $980,949, (v) the issuance of 14,475,676 shares of Common Stock to the MMF Members in exchange for their membership units of Muscle Maker Brands which were initially recorded at $1,466,541, which exchange we assume will occur prior to this Offering, and (vi) the grant of 1,115,000 shares of Common Stock to the employees and consultants of Muscle Maker, which grant we assume will occur prior to this Offering.

We derived this table from, and it should be read in conjunction with and is qualified in its entirety by reference to, our historical and unaudited consolidated financial statements and the accompanying notes included elsewhere in this Offering Circular. You should also read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	As of June 30, 2016 (unaudited)
	Actual			Pro Forma As Adjusted (1)
Cash and cash equivalents	$	648,671		$	20,774,462
Total debt at face value	$	2,489,620		$	-
Stockholders’ equity:
Common stock, no par value; 100,000,000 shares authorized and 42,978,571 shares issued and outstanding on an actual basis, and 100,000,000 shares authorized and 79,741,464 shares issued and outstanding on an as adjusted basis		5,157,010			29,814,469
Additional paid-in capital		216,524			216,524
Accumulated deficit		(1,632,982	)		(1,632,982	)
Non-controlling interest		967,121			10,073
Total stockholders’ equity		4,707,673			28,408,084
Total capitalization	$	7,197,293		$	28,408,084

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(1) The number of shares of common stock to be outstanding after the offering is based on 79,741,464, which is the number of shares outstanding on March 30, 2017, and excludes:

● 3,827,442 shares of common stock issuable upon the exercise of all of the outstanding warrants; and

● 300,000 shares of our common stock issuable upon the exercises of warrants which would be issued by Muscle Maker to the Placement Agent assuming all of the shares offered in this Offering are sold.

DETERMINATION OF OFFERING PRICE

The public offering price of the shares was determined by negotiation between us and the placement agent. That public offering price is subject to change as a result of market conditions and other factors. Prior to this offering, no public market exists for our common stock. The principal factors considered in determining the public offering price of the shares included:

● the information in this Offering Circular and otherwise available to the placement agent, including our financial information;

● the history and the prospects for the industry in which we compete;

● the ability of our management;

● the prospects for our future earnings;

● the present state of our development and our current financial condition;

● the general condition of the economy and the securities markets in the United States at the time of this offering;

● the recent market prices of, and the demand for, publicly-traded securities of generally comparable companies; and

● other factors as were deemed relevant.

DILUTION

Dilution is the amount by which the offering price paid by purchasers of common stock sold in this offering will exceed the pro forma net tangible book value per share of common stock after the offering. As of June 30, 2016, our net tangible book value was approximately $(1,572,000), or $(0.04) per share. Net tangible book value is the value of our total tangible assets less total liabilities. As of June 30, 2016 our total liabilities exceed our total tangible assets by approximately $1,572,000. This section accounts for issuances of Muscle Maker after June 30, 2016, including (i) 2,165,240 shares of Common Stock to American Restaurant Holdings in connection with the conversion of the 2015 ARH Note in the principal amount of $1,082,620, (ii) 6,554,604 shares of Common Stock to American Restaurant Holdings in connection with the conversion of the 2016 ARH Note in the principal amount of $2,621,842, and (iii) the issuance of 2,452,373 shares of Common Stock to American Restaurant Holdings in connection with the conversion of the 2017 ARH Note in the principal amount of $980,949. In addition, this section assumes the issuance of 14,475,676 shares of Common Stock to the MMF Members in exchange for their membership units of Muscle Maker Brands which were initially recorded at $1,466,541, which we assume will occur prior to this Offering. Furthermore, this section assumes the grant of 1,115,000 shares of Common Stock to our employees and consultants, which grant we assume will occur prior to this Offering. Moreover, this section assumes the exercise of (a) the 5-year warrant to purchase 625,000 shares of Common Stock of Muscle Maker at an exercise price of $0.75 per share; (b) the 3-year warrant to purchase 2,294,112 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share; (c) the 3-year warrant purchase of 858,330 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share; and (d) a 3-year warrant to purchase of 50,0000 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share.

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Based on the initial offering price of $2.00 per one share of common stock, on an as adjusted basis as of June 30, 2016, after giving effect to the issuance of common stock in exchange for MMB Units, common stock on the conversion of debt, assumed exercise of warrants to purchase common stock and the offering of shares of common stock and the application of the related net proceeds, our net tangible book value would be:

(i) $24,284,434, or $0.29 per share of common stock, assuming the sale of 100% of the shares offered 10,000,000 shares) with net proceeds in the amount of $17,500,000 after deducting estimated broker commissions of $1,200,000 and estimated offering expenses of $1,300,000;

(ii) $19,684,434, or $0.24 per share of common stock, assuming the sale of 75% of the shares offered (7,500,000 shares) with net proceeds in the amount of $12,900,000 after deducting estimated broker commissions of $900,000 and estimated offering expenses of $1,200,000;

(iii) $15,084,434, or $0.19 per share of common stock, assuming the sale of 50% of the shares offered (5,000,000 shares) with net proceeds in the amount of $8,300,000 after deducting estimated broker commissions of $600,000 and estimated offering expenses of $1,100,000; and

(iv) $10,484,434, or $0.14 per share of common stock, assuming the sale of 25% of the shares offered (2,500,000 shares) with net proceeds in the amount of $3,700,000 after deducting estimated broker commissions of $300,000 and estimated offering expenses of $1,000,000.

Purchasers of shares of common stock in this offering will experience immediate and substantial dilution in net tangible book value per share for financial accounting purposes, as illustrated in the following table on an approximate dollar per share basis, depending upon whether we sell 100%, 75%, 50%, or 25% of the shares being offered in this offering:

Percentage of offering shares of common stock sold	100%		75%		50%		25%
Offering price per share of common stock	$	2.00	$	2.00	$	2.00	$	2.00
Net tangible book value per share of common stock before this offering	$	6,634,434	$	6,634,434	$	6,634,434	$	6,634,434
Increase in net tangible book value per share attributable to new investors	$	17,500,000	$	12,900,000	$	8,300,000	$	3,700,000
Pro forma net tangible book value per share after this offering	$	0.29	$	0.24	$	0.19	$	0.14
Immediate dilution in net tangible book value per share to new investors	$	1.71	$	1.76	$	1.81	$	1.86

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The following tables sets forth depending upon whether we sell 100%, 75%, 50%, or 25% of the shares being offered in this offering, as of June 30, 2016, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and to be paid by new investors purchasing shares of common stock in this offering, after giving pro forma effect to the issuance of common stock on the conversion of debt, assumed exercise of warrants to purchase common stock, assumed issuance of common stock in exchange for MMB Units, assumed the grant of common stock to our employees and consultants and the new investors in this offering at the offering price of $2.00 per share of common stock, together with the total consideration paid an average price per share paid by each of these groups, before deducting estimated broker commissions and estimated offering expenses.

	100% of the Offered Shares Sold
	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			per Share
Existing stockholders as of June 30, 2016		42,978,571		52	%	$	5,157,010		15	%	$	0.12
Assumed issuance of common stock in exchange for MMB Units		14,475,676		17	%	$	957,048		3	%	$	0.07
Issuance of common stock for converted debt		11,172,217		13	%	$	4,685,411		13	%	$	0.42
Assumed exercise of warrants to purchase common stock prior to the Offering		3,827,442		5	%	$	3,671,192		10	%	$	0.96
Assumed grant of common stock to our employees and consultants		1,115,000		1	%	$	1,115,000		3	%	$	1.00
New investors		10,000,000		12	%	$	20,000,000		56	%	$	2.00
Total		83,568,906		100.0	%	$	35,585,661		100.0	%	$	0.43

	75% of the Offered Shares Sold
	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			per Share
Existing stockholders as of June 30, 2016		42,978,571		53	%	$	5,157,010		17	%	$	0.12
Issuance of common stock in exchange for MMB Units		14,475,676		18	%	$	957,048		3	%	$	0.07
Assumed issuance of common stock for converted debt		11,172,217		14	%	$	4,685,411		15	%	$	0.42
Assumed exercise of warrants to purchase common stock prior to the Offering		3,827,442		5	%	$	3,671,192		12	%	$	0.96
Assumed grant of common stock to our employees and consultants		1,115,000		1	%	$	1,115,000		4	%	$	1.00
New investors		7,500,000		9	%	$	15,000,000		49	%	$	2.00
Total		81,068,906		100.0	%	$	30,585,661		100.0	%	$	0.38

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	50% of the Offered Shares Sold
	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			per Share
Existing stockholders as of June 30, 2016		42,978,571		55	%	$	5,157,010		20	%	$	0.12
Issuance of common stock in exchange for MMB Units		14,475,676		19	%	$	957,048		4	%	$	0.07
Issuance of common stock for converted debt		11,172,217		14	%	$	4,685,411		18	%	$	0.42
Assumed exercise of warrants to purchase common stock prior to the Offering		3,827,442		5	%	$	3,671,192		14	%	$	0.96
Assumed grant of common stock to our employees and consultants		1,115,000		1	%	$	1,115,000		5	%	$	1.00
New investors		5,000,000		6	%	$	10,000,000		39	%	$	2.00
Total		78,568,906		100.0	%	$	25,585,661		100.0	%	$	0.33

	25% of the Offered Shares Sold
	Shares Purchased					Total Consideration					Average Price
	Number		Percent			Amount		Percent			per Share
Existing stockholders as of June 30, 2016		42,978,571		57	%	$	5,157,010		25	%	$	0.12
Issuance of common stock in exchange for MMB Units		14,475,676		19	%	$	957,048		5	%	$	0.07
Issuance of common stock for converted debt		11,172,217		15	%	$	4,685,411		23	%	$	0.42
Assumed exercise of warrants to purchase common stock prior to the Offering		3,827,442		5	%	$	3,671,192		18	%	$	0.96
Assumed grant of common stock to our employees and consultants		1,115,000		1	%	$	1,115,000		5	%	$	1.00
New investors		2,500,000		3	%	$	5,000,000		24	%	$	2.00
Total		76,068,906		100.0	%	$	20,585,661		100.0	%	$	0.27

The foregoing discussion and tables include the issuance of 11,172,217 shares of common stock of Muscle Maker for converted debt of Muscle Maker on March 14, 2017 and assume the following transactions immediately prior to the completion of this Offering:

(i)	issuance of 14,475,676 shares of Common Stock of Muscle Maker in exchange for MMB Units;
(ii)	grant of 1,115,000 shares of Common Stock of Muscle Maker to our employees and consultants; and
(iii)	the exercise of all outstanding warrants to purchase (a) 625,000 shares of Common Stock at $0.75 per share, (b) 2,294,112 shares of Common Stock at $1.00 per share, (c) 858,330 shares of Common Stock at $1.00 per share; and (d) 50,000 shares of Common Stock at $1.00 per share.

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The foregoing discussion and tables above do not give effect to the 300,000 shares of our common stock issuable upon the exercise of warrants at an exercise price of $2.20 per share which would be issued by Muscle Maker to the Placement Agent in connection with the Offering assuming all of the shares offered in this Offering are sold.

PLAN OF DISTRIBUTION

Placement Agent

Wellington Shields & Co., LLC, a broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority (“FINRA”) which we refer to herein as the Placement Agent, has agreed to act as a placement agent in connection with this Offering. Subject to the terms and conditions of an engagement letter with the placement agent dated July 10, 2016, we have agreed to sell and the Placement Agent has agreed to sell on our behalf, at the offering price less the underwriting discounts and commissions set forth below a maximum of 10,000,000 shares of Common Stock (“Offered Shares”). The Placement Agent is not purchasing any securities offered by this Offering Circular, nor are they required to arrange the purchase or sale of any specific number or dollar amount of securities, but have agreed to use their best efforts to arrange for the sale of all of the securities offered hereby. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Offering.

The term of the engagement letter began on July 10, 2016 and continues until the earlier of the completion or cancellation of the Offering or the termination of the engagement by either the Company or Placement Agent unilaterally deciding to terminate the engagement agreement upon thirty days’ prior written notice to the other party.

We have agreed to pay the Placement Agent a fee equal to six percent (6%) of the aggregate purchase price of the Offered Shares sold in this Offering. In addition, we have agreed to reimburse the Placement Agent for its reasonable and accountable out-of-pocket expenses subject to our prior written consent. We paid the Placement Agent a non-refundable retainer fee of $25,000. If the maximum of 10,000,000 shares of Common Stock are sold, the maximum amount of commissions that we estimate will be paid to our Placement Agent is $1,200,000. It is expected that the Placement Agent will conduct essentially all of the marketing and sales of the Common Stock. There is no assurance that additional placement agents will participate in the Offering. We are responsible for all offering fees and expenses estimated to be $900,000 in the aggregate, including the following: (i) fees and disbursements of our legal counsel, accountants and other professionals we engage; (ii) fees and expenses incurred in the production of offering documents, including design, printing, photograph, and written material procurement costs; (iii) reimbursements of accountable expenses of the Placement Agent; (iv) all filing fees, including blue sky filing fees; (v) all of the legal fees related to the registration and qualification of the Offered Shares under state securities laws; and (vi) all costs of Direct Transfer’s and Regions Bank’s services.

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Placement Agent’s Warrants

Upon each closing of this offering, we have agreed to issue to the Placement Agent warrants to purchase a number of shares of our common stock equal to three percent (3%) of the total shares of our common stock sold in such closing (“Placement Agent’s Warrants”). The Placement Agent’s Warrants are exercisable commencing 180 days after the qualification date of the offering statement related to this offering, and will be exercisable until the fifth anniversary of the qualification date. The Placement Agent’s Warrants are not redeemable by us. The exercise price for the Placement Agent’s Warrants will be at purchase price equal to $2.20 per share (110% of the implied price per share of the Offering).

The Placement Agent’s Warrants and the shares of common stock underlying the Placement Agent’s Warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The Placement Agent, or permitted assignees under such rule, may not exercise, sell, transfer, assign, pledge, or hypothecate the Placement Agent’s Warrants or the shares of common stock underlying the Placement Agent’s Warrants, nor will the Placement Agent, or permitted assignees engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the Placement Agent’s Warrants or the underlying shares of common stock for a period of 180 days from the qualification date of the offering statement, except that they may be transferred, in whole or in part, by operation of law or by reason of our reorganization, or to any Placement Agent or selected dealer participating in the offering and their officers or partners if the Placement Agent’s Warrants or the underlying shares of our common stock so transferred remain subject to the foregoing lock-up restrictions for the remainder of the time period. The Placement Agent’s Warrants will provide for adjustment in the number and price of the Placement Agent’s Warrants and the shares of common stock underlying such Placement Agent’s Warrants in the event of recapitalization, merger, stock split, or other structural transaction, or a future financing undertaken by us.

Escrow Account

Regions Bank, an Alabama banking corporation (“Escrow Agent”), will act as escrow agent for the Offering. Prior to the date the SEC issues a qualification for the sale of the shares of common stock pursuant to this Offering Circular, the escrow agent shall establish a non-interest-bearing account, which account shall be titled “Subscription Account for Muscle Maker, Inc” (the “Escrow Account”). The Escrow Account shall be a segregated deposit account at the bank. The Escrow Account maintained by the escrow agent shall be terminated in whole or in part on the earliest to occur of: (a) the first to occur of the (i) the maximum offering amount being raised, or (ii) 18 months from the date of SEC qualification; or (b) within fifteen (15) days from the date upon which a determination is made by the company to terminate the Offering. The foregoing sentence describes the escrow period the “Escrow Period”. During the Escrow Period, the parties agree that (i) the Escrow Account and escrowed funds will be held for the benefit of investors, and that (ii) the Company is not entitled to any funds received into escrow, and that no amount deposited into the Escrow Account shall become the property of the Company or any other entity, or be subject to any debts, liens or encumbrances of any kind of any other entity, until the Company has triggered closing of such funds. In the event the escrow agent does not receive written instructions from the Company to release funds from the Escrow Account on or prior to termination of the Escrow Period, the escrow agent shall terminate the escrow and make a full and prompt return of funds so that refunds are made to each investor in the exact amount received from said investor, without deduction, penalty or expense to investor.

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The escrow agent, Regions Bank, shall process all escrowed amounts for collection through the banking system and shall maintain an accounting of each deposit posted to its ledger, which also sets forth, among other things, each investor’s name and address, the quantity of shares of common stock purchased, and the amount paid.

If any subscription agreement for the purchase of shares of common stock is rejected by the Company in its sole discretion, then the subscription agreement and the escrowed amounts for such investor shall be returned to the rejected investor by the escrow agent within fifteen (15) business days from the date of rejection.

The Company shall pay certain itemized fees to Regions Bank for its escrow services, including: (i) a closing fee of $300 per closing; (ii) one-time administration fee of $7,000; and (iii) Return Subscription Deposit to Subscribers fee of $10.00. Wire fees have been waived for this Offering.

Escrow agent, in no way endorses the merits of the offering of the securities.

Technology and Administrative Services

The Company has engaged Direct Transfer, LLC (“Direct Transfer”), a wholly owned subsidiary of Issuer Direct Corp., to provide certain technology and administrative services in connection with the Offering, including the online platform of Direct Transfer by which, after the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, investors of Muscle Maker will receive, review, execute and deliver subscription agreements electronically. After the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, payment of the purchase price by ACH debit transfer, wire transfer or by major credit card shall be made through the online platform of Direct Transfer to Regions Bank (the “Escrow Agent”) and received and held by Escrow Agent in a non-interest bearing escrow account (“Escrow Account”) in compliance with SEC Rule 15c2-4, with funds released to the Company only after we closed on the subscription as described in this Offering Circular. Payments made by major credit card shall be limited to $300 per Subscriber. The Company may close on investments on a “rolling” basis (so not all investors will receive their Shares on the same date). Direct Transfer, LLC will transfer the subscriber funds to the escrow agent, Regions Bank. Regions Bank will deposit the funds in the Company’s Escrow Account. Direct Transfer, LLC is not acting as escrow agent and will not hold any funds. We will pay certain itemized administrative fees to Direct Transfer, LLC for these services, including: (i) $1,500 for a one-time set up fee for the Test the Waters Platform; (ii) $1,000 for a one-time set up fee for the Click Invest Platform; (iii) $500.00 for a one-time fee for the SubDoc Builder; (iv) $5.00 per investor for a one-time accounting fee (investor onboarding) upon receipt of funds (the “Invest Now” button fee); (v) $1.50 per inbound ACH transfer; (vi) $25.00 per inbound wire transfer for processing incoming funds; and (vii) $25.00 per wire transfer for outbound funds to the Company. A 2% credit card fee will be imposed on payments made by credit cards. Direct Transfer, LLC is not participating as an underwriter or placement agent of the Offering and will not solicit any investment in the company, recommend the Company’s securities, or provide investment advice to any prospective investor, or distribute the Offering Circular or other offering materials to investors. All inquiries regarding this offering or escrow should be made directly to the Company or the Placement Agent.

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Anti-Money Laundering Services

Direct Transfer, LLC has been engaged to provide certain anti-money laundering services in connection with this offering. The Company has agreed to pay Direct Transfer, LLC $2.00 per domestic investor, $65.00 per international investor for anti-money laundering checks, as well as $45.00 per bad actor check.

Direct Transfer, LLC is not a FINRA member and is not participating as an underwriter of the offering. As such, it will not solicit any investment in the Company, recommend the Company’s securities or provide investment advice to any prospective investor, or distribute the Offering Circular or other offering materials to investors. All inquiries regarding this offering should be made directly to the Company.

Transfer Agent and Registrar

Interwest Transfer Company, Inc. (“Transfer Agent”) is the transfer agent and registrar for our common stock.

The Transfer Agent’s address is at 1981 Murray Holladay Road, Suite 100, Salt Lake City, UT 84117 and its telephone number is (801) 292-9294.

We will pay certain itemized fees to the Transfer Agent for these transfer agent services, including: (i) an annual transfer agent fee of $950 and (ii) $12 per investor for a one-time accounting fee upon onboarding the investor.

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Stock Certificates

Ownership of the Offered Shares will be “book-entry” only form, meaning that ownership interests shall be recorded by the Transfer Agent, and kept only on the books and records of Transfer Agent. No physical certificates shall be issued, nor received, by Transfer Agent or any other person. The Transfer Agent records and maintains securities of Company in in book-entry form only. Book-entry form means the Transfer Agent maintains shares on an investor’s behalf without issuing or receiving physical certificates. Securities that are held in un-certificated book-entry form have the same rights and privileges as those held in certificate form, but the added convenience of electronic transactions (e.g. transferring ownership positions between a broker-dealer and the Transfer Agent), as well as reducing risks and costs required to store, manage, process and replace lost or stolen securities certificates. Transfer Agent shall send out email confirmations of positions and notifications of changes “from” Company upon each and every event affecting any person’s ownership interest, with a footer referencing Transfer Agent.

Transfer Agent may email holders a “ceremonial certificate” in .pdf form, per our standard template, which will be clearly marked as such. All parties recognize and agree that these are not legal securities instruments but simply decorative, informal, commemorative, non-binding marketing confirmations of an ownership position. They are not legal tender of any form.

No Public Market

Our Common Stock are not quoted on any stock exchange or quotation system. In addition, applicable state securities laws and regulations impose transfer restrictions on our Common Stock. We intend to apply to list our common stock on the NYSE MKT (“NYSE MKT”) or the NASDAQ Capital Market (“NASDAQ”) under the symbol “MMG” after we register our common stock under the Securities Exchange Act of 1934, as amended (“Exchange Act”), following the termination of this offering. There is no assurance that our common stock will be registered under the Exchange Act or, if registered under the Exchange Act, that the application will be approved by the NYSE MKT or the NASDAQ. If not approved by the NYSE MKT or NASDAQ, we intend to apply for quotation of our common stock on the OTCQX Marketplace under the symbol “MMG” after the termination of this offering.

Investment Amount Limitations

Generally, no sale may be made to you in this offering if the aggregate purchase price you pay is more than 10% of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, we encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For general information on investing, we encourage you to refer to www.investor.gov.

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As a Tier 2, Regulation A offering, investors must comply with the 10% limitation to investment in the offering. The only investor in this offering exempt from this limitation is an accredited investor, an “Accredited Investor,” as defined under Rule 501 of Regulation D. If you meet one of the following tests you should qualify as an Accredited Investor:

(i)	You are a natural person who has had individual income in excess of $200,000 in each of the two most recent years, or joint income with your spouse in excess of $300,000 in each of these years, and have a reasonable expectation of reaching the same income level in the current year;
(ii)	You are a natural person and your individual net worth, or joint net worth with your spouse, exceeds $1,000,000 at the time you purchase Offered Shares (please see below on how to calculate your net worth);
(iii)	You are an executive officer or general partner of the issuer or a manager or executive officer of the general partner of the issuer;
(iv)	You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the Code, a corporation, a Massachusetts or similar business trust or a partnership, not formed for the specific purpose of acquiring the Offered Shares, with total assets in excess of $5,000,000;
(v)	You are a bank or a savings and loan association or other institution as defined in the Securities Act, a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, an insurance company as defined by the Securities Act, an investment company registered under the Investment Company Act of 1940, as amended, or the Investment Company Act, or a business development company as defined in that act, any Small Business Investment Company licensed by the Small Business Investment Act of 1958 or a private business development company as defined in the Investment Advisers Act of 1940;
(vi)	You are an entity (including an Individual Retirement Account trust) in which each equity owner is an accredited investor;
(vii)	You are a trust with total assets in excess of $5,000,000, your purchase of Offered Shares is directed by a person who either alone or with his purchaser representative(s) (as defined in Regulation D promulgated under the Securities Act) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, and you were not formed for the specific purpose of investing in the Offered Shares; or
(viii)	You are a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has assets in excess of $5,000,000.

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Offering Period and Expiration Date

This Offering will start on the date this Offering Circular is declared qualified by the SEC. The Offering is expected to expire on the first of: (i) all of the Offered Shares are sold; or (ii) the close of business six (6) months after the date that this Offering is deemed qualified by the SEC, unless sooner terminated or extended up to no more than an additional six (6) months by the Company.

Testing the Waters

We will use our existing website, www.musclemakergrill.com to provide notification of this anticipated Offering. Prior to the qualification of the Offering by the SEC, if you desire information about this anticipated Offering, you would go to the Investor Relations page at www.musclemakergrill.com and click on the “Reserve Your Shares” button. The Muscle Maker website will redirect you, as a prospective investor, via the “Reserve Your Shares” button to a landing page on the website operated by Direct Transfer, LLC, where prospective investors are asked to provide certain information about themselves, such as his, her or its name, phone number, e-mail address, zip code and the amount of shares of interest, constituting a non-binding indication of interest (“Interest Holders”). This Offering Circular will be furnished to prospective investors via download 24 hours per day, 7 days per week on the Direct Transfer website as well. All Interest Holders have received and will continue to receive a series of comprehensive educational emails explaining the entire process and procedures for subscribing in the Offering and “what to expect” on the Direct Transfer platform. Upon qualification by the SEC, Interest Holders will be invited to participate in subscribing in the Offering (set forth below).

Procedures for Subscribing

After the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, if you decide to subscribe for any Common Stock in this Offering, you should:

Go to the Investor Relations page at www.musclemakergrill.com, click on the “Invest Now” button and follow the procedures as described.

1.	Electronically receive, review, execute and deliver to us through Direct Transfer a Subscription Agreement; and
2.	Deliver funds only by ACH, wire transfer or by major credit card for the amount set forth in the Subscription Agreement directly to the specified bank account maintained by Regions Bank. Payments made by major credit card shall be limited to $300 per subscriber.

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The Company has engaged Direct Transfer, LLC to provide certain technology and administrative services in connection with the Offering, including the online platform by which, after the qualification by the SEC of the Offering Statement of which this Offering Circular is a part, subscribers may receive, review, execute and deliver subscription agreements electronically.

The Muscle Maker website will redirect interested investors via the “Invest Now” button to a platform operated by Direct Transfer, LLC, where investors can receive (upon their acknowledgement that they have had the opportunity to review this Offering Circular), review, execute and deliver subscription agreements electronically.

Any potential investor will have ample time to review the Subscription Agreement, along with their counsel, prior to making any final investment decision. We will not accept any money until the SEC declares this Offering Circular qualified.

We anticipate that we will hold closings for purchases of the shares of our common stock on at least a monthly basis until the offering is fully subscribed or we terminate the Offering. Proceeds will be held with the Escrow Agent in an escrow account subject to compliance with Exchange Act Rule 15c2-4 until closing occurs. Our dealer-manager and/or the participating broker-dealers will submit a subscriber’s form(s) of payment in compliance with Exchange Act Rule 15c2-4, generally by noon of the next business day following receipt of the subscriber’s subscription agreement and form(s) of payment.

You will be required to represent and warrant in your subscription agreement that you are an accredited investor as defined under Rule 501 of Regulation D or that your investment in the shares of common stock does not exceed 10% of your net worth or annual income, whichever is greater, if you are a natural person, or 10% of your revenues or net assets, whichever is greater, calculated as of your most recent fiscal year if you are a non-natural person. By completing and executing your subscription agreement you will also acknowledge and represent that you have received a copy of this offering circular, you are purchasing the shares of common stock for your own account and that your rights and responsibilities regarding your shares of common stock will be governed by our charter and bylaws, each filed as an exhibit to the offering statement of which this offering circular is a part.

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Right to Reject Subscriptions. After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to the escrow agent, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. We will return all monies from rejected subscriptions immediately to you, without interest or deduction.

Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.

Under Rule 251 of Regulation A, non-accredited, non-natural investors are subject to the investment limitation and may only invest funds which do not exceed 10% of the greater of the purchaser’s revenue or net assets (as of the purchaser’s most recent fiscal year end). A non-accredited, natural person may only invest funds which do not exceed 10% of the greater of the purchaser’s annual income or net worth (please see below on how to calculate your net worth).

NOTE: For the purposes of calculating your Net Worth, it is defined as the difference between total assets and total liabilities. This calculation must exclude the value of your primary residence and may exclude any indebtedness secured by your primary residence (up to an amount equal to the value of your primary residence). In the case of fiduciary accounts, net worth and/or income suitability requirements may be satisfied by the beneficiary of the account or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the Offered Shares.

In order to purchase Offered Shares and prior to the acceptance of any funds from an investor, an investor will be required to represent, to the Company’s satisfaction, that he is either an accredited investor or is in compliance with the 10% of net worth or annual income limitation on investment in this offering.

Selling Restrictions

Notice to prospective investors in Canada

The offering of the Offered Shares in Canada is being made on a private placement basis in reliance on exemptions from the prospectus requirements under the securities laws of each applicable Canadian province and territory where the Common Stock may be offered and sold, and therein may only be made with investors that are purchasing as principal and that qualify as both an “accredited investor” as such term is defined in National Instrument 45-106 Prospectus and Registration Exemptions and as a “permitted client” as such term is defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligation. Any offer and sale of the Offered Shares in any province or territory of Canada may only be made through a dealer that is properly registered under the securities legislation of the applicable province or territory wherein the Offered Shares is offered and/or sold or, alternatively, by a dealer that qualifies under and is relying upon an exemption from the registration requirements therein.

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Any resale of the Offered Shares by an investor resident in Canada must be made in accordance with applicable Canadian securities laws, which may require resales to be made in accordance with prospectus and registration requirements, statutory exemptions from the prospectus and registration requirements or under a discretionary exemption from the prospectus and registration requirements granted by the applicable Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the Offered Shares outside of Canada.

Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.

Notice to prospective investors in the European Economic Area

In relation to each Member State of the European Economic Area (each, a “Relevant Member State”), no offer of Offered Shares may be made to the public in that Relevant Member State other than:

A.	to any legal entity which is a qualified investor as defined in the Prospectus Directive;
B.	to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives; or
C.	in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Offered Shares shall require the Company or the representatives to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

Each person in a Relevant Member State who initially acquires any Offered Shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive. In the case of any Offered Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the Offered Shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Offered Shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the representatives has been obtained to each such proposed offer or resale.

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The Company, the representatives and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This offering circular has been prepared on the basis that any offer of Offered Shares in any Relevant Member State will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of Offered Shares. Accordingly, any person making or intending to make an offer in that Relevant Member State of Offered Shares which are the subject of the offering contemplated in this offering circular may only do so in circumstances in which no obligation arises for the Company or any of the underwriters to publish a prospectus pursuant to Article 3 of the Prospectus Directive in relation to such offer. The Company has not authorized, nor does it authorize, the making of any offer of Offered Shares in circumstances in which an obligation arises for the Company to publish a prospectus for such offer.

For the purpose of the above provisions, the expression “an offer to the public” in relation to any Offered Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Offered Shares to be offered so as to enable an investor to decide to purchase or subscribe the Offered Shares, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Notice to prospective investors in the United Kingdom

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”).

Any person in the United Kingdom that is not a relevant person should not act or rely on the information included in this document or use it as basis for taking any action. In the United Kingdom, any investment or investment activity that this document relates to may be made or taken exclusively by relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

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Notice to Prospective Investors in Switzerland

The Offered Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the Offered Shares or this offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to this offering, the Company, the Offered Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of Offered Shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of Offered Shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Offered Shares.

Notice to Prospective Investors in the Dubai International Financial Centre

This offering circular relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority, or DFSA. This offering circular is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this offering circular nor taken steps to verify the information set forth herein and has no responsibility for the offering circular. The Offered Shares to which this offering circular relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Offered Shares offered should conduct their own due diligence on the Offered Shares. If you do not understand the contents of this offering circular you should consult an authorized financial advisor.

Notice to Prospective Investors in Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, or ASIC, in relation to this offering. This offering circular does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001, or the Corporations Act, and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the Offered Shares may only be made to persons, or the Exempt Investors, who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the Offered Shares without disclosure to investors under Chapter 6D of the Corporations Act.

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The Offered Shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under this offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring Offered Shares must observe such Australian on-sale restrictions.

This offering circular contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this offering circular is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

Notice to prospective investors in China

This offering circular does not constitute a public offer of the Offered Shares, whether by sale or subscription, in the People’s Republic of China (the “PRC”). The Offered Shares are not being offered or sold directly or indirectly in the PRC to or for the benefit of, legal or natural persons of the PRC.

Further, no legal or natural persons of the PRC may directly or indirectly purchase any of the Offered Shares or any beneficial interest therein without obtaining all prior PRC’s governmental approvals that are required, whether statutorily or otherwise. Persons who come into possession of this document are required by the issuer and its representatives to observe these restrictions.

Notice to Prospective Investors in Hong Kong

The Offered Shares have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the Offered Shares has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Offered Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.

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Notice to Prospective Investors in Japan

The Offered Shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

Notice to Prospective Investors in Singapore

This offering circular has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this offering circular and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Offered Shares may not be circulated or distributed, nor may the Offered Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the Offered Shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Offered Shares pursuant to an offer made under Section 275 of the SFA except:

(a) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

(b) where no consideration is or will be given for the transfer;

(c) where the transfer is by operation of law;

(d) as specified in Section 276(7) of the SFA; or

(e) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.

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DIVIDEND POLICY

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. Consequently, you will only realize an economic gain on your investment in our common stock if the price appreciates. You should not purchase our common stock expecting to receive cash dividends. Since we do not anticipate paying dividends, and if we are not successful in establishing an orderly public trading market for our shares, then you may not have any manner to liquidate or receive any payment on your investment. Therefore, our failure to pay dividends may cause you to not see any return on your investment even if we are successful in our business operations. In addition, because we may not pay dividends in the foreseeable future, we may have trouble raising additional funds which could affect our ability to expand our business operations.

DESCRIPTION OF BUSINESS

Our Business

The Muscle Maker Grill is a high-growth, fast casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based meals featuring chicken, seafood, pasta, burgers, wraps and flat breads. In addition, we feature freshly prepared entrée salads and an appealing selection of sides, protein shakes and fruit smoothies. We operate in the approximately $34.5 billion fast casual restaurant segment, which we believe has created significant recent disruption in the restaurant industry and is rapidly gaining market share from adjacent restaurant segments, resulting in significant growth opportunities for restaurant concepts such as Muscle Maker Grill.

We believe our restaurant concept delivers a highly differentiated customer experience by combining the quality and hospitality that customers commonly associate with our full service and fast casual restaurant competitors with the convenience and value customers generally expect from traditional fast food restaurants. The following core values form the foundation of our brand:

● Quality. Commitment to provide the highest quality, healthy-inspired food for a wonderful experience.

● Empowerment and Respect. We seek to empower our employees to take initiative and give their best while respecting themselves and others to maintain an environment for team work and growth.

● Service. Provide world class service to achieve excellence each passing day.

● Value. Our combination of high-quality, healthy-inspired food, empowerment of our employees, world class service, all delivered at a low price, strengthens the value proposition for our customers.

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In striving for these goals, we aspire to connect with our target market and create a great brand with a strong and loyal customer base.

As of June 30, 2016, Muscle Maker and its subsidiaries and franchisees operate 48 Muscle Maker Grill restaurants located in 10 states, five of which are owned and operated by Muscle Maker, and 43 are franchise restaurants.

Our restaurants generated company-operated restaurant revenue of $1,032,558 and $875,566 for the year ended December 31, 2015, and the six-months ended June 30, 2016, respectively. Total company revenue was $3,124,823 and $1,917,540 and net losses were $1,021,641 and $1,203,627 for the year ended December 31, 2015, and the six-months ended June 30, 2016, respectively.

We are the owner of the trade name and service mark Muscle Maker Grill® and other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill® restaurants. We license the right to use the Muscle Maker Grill® trademarks and intellectual property to our wholly-owned subsidiary, Muscle Maker Brands, and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill® restaurants.

Seasonal factors and the timing of holidays cause our revenue to fluctuate from quarter to quarter. Our revenue per restaurant is typically lower in the fourth quarter due to reduced December traffic and higher traffic in the first, second, and third quarters.

Our healthy-inspired menu, value proposition, and culture have helped us to deliver strong and consistent financial and operating performance, as illustrated by the following:

● our company-owned annual average unit volumes, or AUVs, grew from $600,000 in fiscal year 2014 to $625,000 in fiscal year 2015; and

● from fiscal year 2014 to fiscal year 2015, we increased our total revenue by 4.83% from $2,980,877 to $3,124,823.

Our Industry

We operate within the LSR segment of the U.S. restaurant industry, which includes QSR and fast-casual restaurants. According to Technomic, 2015 sales for the total LSR category increased 5.2% from 2014 to $255 billion. We offer fast-casual quality food combined with quick-service speed, convenience and value across multiple dayparts. According to Technomic, sales for the total QSR segment grew 4.1% from 2014 to $212 billion in 2015, and are projected to grow to $254 billion by 2019, representing a compounded annual growth rate, or CAGR, of 4.6%. Total sales in the fast-casual segment grew 11.3% from 2014 to $43 billion in 2015, and are projected to grow to $64 billion by 2019, representing a CAGR of 10.2%. We believe our differentiated, high-quality menu delivers great value all day, every day, positions us to compete successfully against both QSR and fast-casual concepts, providing us with a large addressable market.

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We expect that the trend towards healthier eating will attract and increase consumer demand for fresh and hand-prepared dishes, leading to a positive impact on our sales.

Strategy

We plan to pursue the following strategies to continue to grow our revenues and profits.

Expand Our System-Wide Restaurant Base.  We believe we are in the early stages of our growth story with 48 current locations in 10 states, as of June 30, 2016, and estimate, based on internal analysis and a study prepared by ESRI, a long-term total restaurant potential in the United States of approximately 3,000 to 5,000 locations. For the year ended December 31, 2014, we opened 12 new franchised restaurants and no new company-operated restaurants. For the year ended December 31, 2015, we opened one new company-operated and seven new franchised restaurants. For the year ended December 31, 2016, we opened six new company-operated and four new franchised restaurants. In 2017, we intend to open 15 to 20 new company-operated and 15 new franchised restaurants, including military bases, across Arizona, California, Florida, Georgia, Illinois, Louisiana, Kansas, Massachusetts, Nebraska, New Jersey, New York, Nevada, North Carolina, Pennsylvania, Texas, Washington and Internationally. Over the long term, we plan to grow the number Muscle Maker Grill restaurants by 30% to 50% annually. There is no guarantee that we will be able to increase the number of our restaurants. We may be unsuccessful in expanding within our existing or into new markets for a variety of reasons described herein under “Risk Factors” above, including competition for customers, sites, franchisees, employees, licenses and financing.

Drive Comparable Restaurant Sales. We plan to continue delivering comparable restaurant sales growth through the following strategies:

● Menu Strategy and Evolution. We will continue to adapt our menu to create entrees that complement our health-inspired offerings and that reinforce our differentiated fast casual positioning. We believe we have opportunities for menu innovation as we look to provide customers more choices through customization and limited time alternative proteins. Our marketing and operations teams collaborate to ensure that the items developed in our test kitchen can be executed to our high standards in our restaurants with the speed and value that our customers have come to expect. We plan to continue introducing and marketing limited time offers to increase occasions across our dayparts as well as to educate customers on our lunch and dinner offerings.

● Attract New Customers Through Expanded Brand Awareness: We expect to attract new customers as Muscle Maker Grill becomes more widely known due to new restaurant openings and marketing efforts focused on broadening the reach and appeal of our brand. We expect consumers will become more familiar with Muscle Maker Grill as we continue to penetrate our markets, which we believe will benefit our existing restaurant base. Our marketing strategy centers on our “Great Food with Your Health in Mind” campaign, which highlights the desirability of healthy-inspired food and made-from-scratch quality of our food. We also utilize social media community engagement and public relations to increase the reach of our brand. Additionally, our system will benefit from increased contributions to our marketing and various advertising funds as we continue to grow our restaurant base.

● Increase Existing Customer Frequency: We are striving to increase customer frequency by providing a service experience and environment that “compliments” the quality of our food and models our culture. We expect to accomplish this by enhancing customer engagement, while also improving throughput, order execution and quality. Additionally, we have recently implemented a customer experience measurement system, which provides us with real-time feedback and customers’ insights to enhance our service experience. We believe that always striving for excellent customer service will create an experience and environment that will support increased existing customer visits.

● Continue to Grow Dayparts: We expect to drive growth across these dayparts through optimized labor and management allocation, enhanced menu offerings, innovative merchandising and marketing campaigns, which have successfully driven growth in our dayparts. We plan to continue introducing and marketing limited time offers to increase occasions across our dayparts as well as to educate customers on our lunch and dinner offerings.

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Continue to Enhance Profitability. We focus on expanding our profitability while also investing in personnel and infrastructure to support our future growth. We will seek to further enhance margins over the long-term by maintaining fiscal discipline and leveraging fixed costs. We constantly focus on restaurant-level operations, including cost controls, while ensuring that we do not sacrifice the quality and service for which we are known. Additionally, as our restaurant base grows, we believe we will be able to leverage support costs as general and administrative expenses grow at a slower rate than our revenues.

Our Brand

Iconic Brand and Unique Concept: We provide guests healthier versions of mainstream-favorite dishes that taste great, making it convenient, affordable and enjoyable to eat healthy. Our diverse menu was created for everyone – fitness enthusiasts, those starting their journey to a healthier lifestyle, and people trying to eat better while on-the-go. Now, guests can have delicious, nutritionally balanced food without the regret. More than just food, our restaurants are a friendly, relaxed and social environment where guests can enjoy great-tasting food and engage with fellow health enthusiasts in their area.

We are focused on expanding our presence within new and existing markets by continuing to add marquee franchise partners to our system, increasing the number of corporately owned locations and through partnership deals with reputable venues including MetLife Stadium in East Rutherford, NJ and Angel Stadium in Anaheim, CA. The health-focused concept anticipates expanding its footprint exponentially over the next couple of years, with more than 100 units currently in development.

Our Food

High-Quality, Healthy Options of Mainstream Dishes: Providing “Great Food with Your Health in Mind,” Muscle Maker Grill’s menu features items with grass-fed steak and all-natural chicken, as well as options that satisfy all dietary preferences – from the carb-free consumer to guests following gluten-free or vegetarian diets. Muscle Maker Grill does not sacrifice taste to serve healthy options. We boast superfoods such as avocado, kale, quinoa, omega-3 packed shrimp, spinach, and use only healthier carb options such as whole wheat pasta and brown rice. We develop and source proprietary sauces and fat free dressings to enhance our unique flavor profiles. Our open style kitchen allows the guests to experience our preparation and cooking methods such as an open flame grill and sauté. In addition to our healthy and diverse food platform, Muscle Maker Grill offers 100% real fruit smoothies, boosters and proprietary protein shakes as well as retail supplements.

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Our Strengths

Compelling Speed Using Cook to Order Preparation: Our guests can expect to enjoy their meals in eight minutes or less. While this service time may be slightly higher than the QSR segment, it fits well within the range of the fast casual segment. Our meals are prepared from a cook to order method using only the freshest, all natural ingredients.

Daypart Mix and Revenue Streams: Standard operating hours for a Muscle Maker Grill are from 10:30 AM to 8:30 PM, Monday through Friday, 11:00 AM to 6 PM, Saturday, and closed on Sunday. While our daypart mix is typical to the QSR fast casual segment which is 5% pre-lunch, 45% lunch, 35% dinner and 15% late evening. We have multiple revenue streams that allow for greater efficiencies and operations and ultimately higher profitability. A typical QSR fast casual brand has two to three revenue streams: dine-in, take-out and delivery. Muscle Maker Grill executes on eight different revenue streams; including: dine-in, take-out, delivery, catering, meal plans, retail and grab and go kiosks and food trucks.

Attractive Price Point and Perceived Value: Muscle Maker Grill offers meals with ‘power sides’ beginning at $8.99, using only the highest quality ingredients such as grass-fed beef, all natural chicken, whole wheat pastas, brown rice and a power blend of kale, romaine and spinach. Our cook to order method, speed of service, hospitality and the experience of our exhibition style kitchen creates a great value perception for our customers. Meal Plan meals begin at $8 a meal making them not only convenient but affordable too. Muscle Maker Grill also offers a boxed lunch program for schools and other organizations starting at $10 a box. These lunches include a wrap, salad or entrée, and a side and a drink. We not only reward our guests with a great value and guest experience, we reward them for their loyalty as well. Frequent Muscle Maker Grill guests can take advantage of its loyalty program, Muscle Maker Grill Rewards, where points are awarded for every dollar spent towards free or discounted menu items. Cards are not required to participate as members can provide their phone number or use the mobile app, Muscle Maker Grill Rewards, to receive notifications announcing new menu items, special events and more. The program is enjoyed by thousands or guests!

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Muscle Maker Grill Business Facts:

● Largest protein based QSR fast casual in the united states.

● Established in 1995 in Colonia, NJ.

● Muscle Maker Grill currently operates 51 restaurants, 39 franchised and 12 company as of March 30, 2017 with system-wide sales exceeding 24 million in 2016.

● Ranked in the future 50 list of the fastest growing small chains in America and achieved a spot on Fastcasual.com’s top 100 Movers and Shakers in 2016 and expecting a top five ranking in 2017.

● National footprint in 12 states as of March 30, 2017 and soon to be 18 states in 2017.

● Multiple International expansion opportunities including: Kuwait, Dubai and India.

● Currently a preferred vendor for the US military with restaurants in development in GA, KY, MA, NY, NC, SC, VA, TX and WA.

Restaurant Level Profitability and Unit Economics: We believe our brand position in a segment with limited competition, strong value perception and multiple revenue streams provides a great opportunity for continued corporate and franchise growth. Our low cost of entry and real estate strategy allows for greater operating efficiencies and higher profitability. See below for corporate store economics. We primarily operate in urban and suburban markets using in line locations and targeting second generation restaurants. Typical capital investment is $180,000 for buildout and equipment. Expected annual venues to achieve a 10% operating profit should be approximately $800,000 providing a payback period of 27 months. Other company venue sources include a franchise fee of $35,000 per unit on a sliding scale for multi-unit development. Franchisees currently pay 5% off gross sales in royalties and 3% of gross sales for marketing and advertising.

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Leveraging Non-Traditional Revenue Streams:

Delivery: A significant differentiator is that Muscle Maker Grill offers delivery at every location nation-wide. Delivery is an option through our mobile app, online ordering platform making it easy and convenient for our guests. Delivery percentages range from 10% up to 56% of sales. We strongly believe this segment will continue to grow as our core demographic has demonstrated the need for online ordering and delivery versus dine-in and take-out.

Catering: Our diverse menus items are also offered through our catering program making it easy and affordable to feed a group. We can feed a group ranging from 10 or 5,000. Muscle Maker Grill has secured large catering contracts with multi-national corporations, universities as well as professional and college athletic programs. Our boxed lunch program, which includes a wrap, salad, or entrée, a side and a drink for a set price is widely popular within schools and other organizations.

Meal Plans: To make healthy eating even easier, Muscle Maker Grill’s signature nutritionally-focused menu items are available through its new Meal Plan program, allowing pre-orders of meals that taste great via phone, online or in-store, available for pick up or delivered right to their door. Available as five, 10, 15 or 20 meals, guests can choose from 28 Muscle Maker Grill menu items, including the Hollywood Salad, Turkey Meatball Wrap, Arizona and many more.

Retail: All Muscle Maker Grill locations participate in our retail merchandising and supplement program. This is a unique revenue stream specific to the Muscle Maker Grill brand and is atypical in the QSR fast casual segment. Guests can purchase our propriety protein in bulk, supplements, boosters, protein and meal replacement bars and cookies. This program gives our guests the opportunity to manage their healthy lifestyle beyond the four walls of our restaurants.

Grab and Go Kiosks: Muscle Maker Grill offers grab and go kiosks both in the restaurants and non-traditional locations. The kiosks are comprised of 10 to 12 core meal plan menu items. We have positioned the kiosks so that guests can grab a meal on the run. These meals are convenient to guests that chose not to dine in or want additional meals for themselves or family members.

Food Trucks: Food trucks have become a more main stream point of destination for restaurant goers and we strongly believe the growth trend in the segment will continue. Muscle Maker Grill wants to make our healthy options available to all consumers and will continue to develop and grow this revenue stream. Muscle Maker Grill currently has one food truck in operation in Dallas, TX and three to five in the pipeline for US military bases such as Hans comb Airforce Base, Quantico Marine Base and West Point Military Academy.

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Our Innovative, Healthy Menu:

A Muscle Maker Grill Restaurant offers quality food, freshly prepared with our proprietary recipes, designed to provide our guests, business neighbors and families with a healthy alternative to fast food. Our menu features chicken, seafood, pasta, burgers, wraps, flat breads, entrée salads, smoothies, and yogurt (including frozen yogurt), in a variety of assorted flavors. Restaurants offer a wide selection of protein supplements and protein snacks, and, where approved by us, breakfast and a nutritious children’s menu.

Muscle Maker Grill prides itself on making healthier versions of the guest’s favorite food, giving them easy access to the food they love, without any guilt. This means catering to an array of healthy eating lifestyles. For over 20 years Muscle Maker Grill has been keeping gluten-free diners, low-carb consumers and vegetarians satisfied. We offer 32 healthier versions of salads, wraps, bowls, sandwiches and flatbreads.

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Our Culture

Culture Driven Management Team: We have a highly experienced senior management team comprised of seven diverse individuals with 145 years of combined experience in franchising, development, real estate, operations, marketing, distribution and finance. Our president and chief executive officer, Robert Morgan, is a 40-year veteran of the restaurant industry, Mr. Morgan is responsible for all facets of Muscle Maker Grill’s rapidly-growing fast casual brand – including its aggressive expansion strategy in new and existing markets, operations, real estate, strategic marketing and more. A founding member of the company, Mr. Morgan joined Muscle Maker Grill as its Chief Operating Officer in 2007 – its inception as a franchised brand. His extensive experience in the franchise and restaurant industries combined with his strong leadership and in-depth knowledge of the Muscle Maker Grill brand have been a major contributor to the overall success of the company. Under Mr. Morgan’s leadership, Muscle Maker Grill has grown from one single location to over 50 franchised and corporate restaurants in 14 states, including universities, military bases and professional sports stadiums with more than 100 sites currently in development domestically and internationally. While we are highly motivated and focused on the growth of our brand and providing a return to our shareholders, we are equally committed to the individual, personal and professional growth of our franchisees, restaurant level management and team members. Their success will ultimately determine the success of our company.

Properties

Our restaurants are typically in-line. A typical restaurant generally ranges from 1,200 to 2,000 square feet with seating for approximately 40 people. Our leases for the store sites occupied by our company-operated restaurants generally have terms of 5 years, with 1 or 2 renewal terms of 5 years. Restaurant leases provide for a specified annual rent, and some leases call for additional or contingent rent based on revenue above specified levels. Generally, our leases are “net leases” that require us to pay a pro rata share of taxes, insurance and maintenance costs.

As of June 30, 2016, our restaurant system consisted of 48 restaurants comprised of five company-operated restaurants and 43 franchised restaurants located in Arizona, California, Connecticut, Florida, Illinois, New Jersey, New York, North Carolina, Pennsylvania and Texas.

We lease our executive offices, consisting of approximately 2,500 square feet in Houston, Texas, for a term expiring in 2020, plus one five-year extension option. We believe our current office space is suitable and adequate for its intended purposes and our near-term expansion plans.

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As of March 30, 2017, our domestic footprint is as follows:

Currently Operating System-Wide Restaurants

As of March 30, 2017, company-operated, franchised and total system-wide restaurants by jurisdiction are:

State	Company-Owned Restaurants		Franchise Restaurants		Total Restaurants
Arizona		-		1		1
California		3		2		5
Florida		-		2		2
Illinois		-		2		2
Kansas		-		1		1
Nebraska		-		1		1
Nevada		-		1		1
New Jersey		3		17		20
New York		4		6		10
North Carolina		1		1		2
Pennsylvania		-		2		2
Texas		1		3		4
TOTAL		12		39		51

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Anticipated System-Wide Restaurants

We anticipate by December 31, 2017 that our company-operated, franchised and total system-wide restaurants will be:

State	Company-Owned Restaurants		Franchise Restaurants		Total Restaurants
Arizona		-		2		2
California		5		4		9
Florida		-		3		3
Georgia		1		1		2
Illinois		4		3		7
Kansas		-		1		1
Massachusetts		1		1		2
Nebraska		-		1		1
New Jersey		4		18		22
New York		5		8		13
Nevada		-		1		1
North Carolina		2		2		4
Pennsylvania		-		4		4
South Carolina		1		-		1
Texas		1		5		6
Virginia		-		1		1
Washington		1		-		1
TOTAL		25		55		80

Site Selection and Expansion

New Restaurant Development

We believe we are in the early stages of our growth story and that our restaurant model is designed to generate strong cash flow, attractive restaurant-level financial results and high returns on invested capital, which we believe provides us with a strong foundation for expansion. For the year ended December 31, 2014, we opened 12 new franchised restaurants and no new company-operated restaurants. For the year ended December 31, 2015, we opened one new company-operated and seven new franchised restaurants. For the year ended December 31, 2016, we opened six new company-operated and four new franchised restaurants. In 2017, we intend to open between 15 and 20 new company-operated and 15 new franchised restaurants, including military bases, across Arizona, California, Florida, Georgia, Illinois, Louisiana, Kansas, Massachusetts, Nebraska, New Jersey, New York, Nevada, North Carolina, Pennsylvania, Texas, Washington and Internationally. There is no guarantee that we will be able to open new company-operated or franchised restaurants, or to increase the overall number of our restaurants. We may be unsuccessful in expanding within our existing or into new markets for a variety of reasons described above under “Risk Factors,” including competition for customers, sites, franchisees, employees, licenses and financing. Over the long term, we plan to grow the number of Muscle Maker Grill restaurants by 30% to 50% annually.

Our strategy for entering new markets is to lead with company development while recruiting and developing franchisees to open new restaurants with us during the second year of new market entry. This will enable us to establish a development, operations and marketing infrastructure to help ensure that we maximize our consumer proposition and support franchisees as they enter the market. We anticipate that entering new markets with both company and franchisee development is the best way to establish our brand, as it will enable us to scale rapidly, thereby driving operational and marketing efficiencies.

We have opened 10 restaurants in fiscal 2016 and have another 9 restaurants under construction. In addition, we have 12 restaurant sites in various stages of development with 7 in permitting and another 5 in lease negotiations.

Over the next three to five years, our expansion strategy will focus on the northeast region of the United States. We believe this market provides an attractive opportunity to leverage our brand awareness and infrastructure.

Site Selection Process

We consider the location of a restaurant to be a critical variable in its long-term success and as such, we devote significant effort to the investigation and evaluation of potential restaurant locations. Our in-house development team has over 100 years of combined experience building such brands as Pizza Hut, Boston Market and Golden Corral. We use a combination of our in-house development team and outside real estate consultants to locate, evaluate and negotiate new sites using various criteria including demographic characteristics, daytime population thresholds and traffic patterns, along with the potential visibility of, and accessibility to, the restaurant. The process for selecting locations incorporates management’s experience and expertise and includes extensive data collection and analysis. Additionally, we use information and intelligence gathered from managers and other restaurant personnel that live in or near the neighborhoods we are considering.

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A typical Muscle Maker Grill may be free standing or located in malls, airports, gyms, strip shopping centers, health clubs or highly concentrated business and residential demographic areas. Customers order their food at the counter and food servers deliver the food to the appropriate table. A typical restaurant located in urban and suburban settings ranges from 1,100-2,400 square feet. Based on our experience and results, we are currently focused on developing inline sites. Our restaurants perform well in a variety of neighborhoods, which gives us greater flexibility and lowers operating risk when selecting new restaurant locations.

We approve new restaurants only after formal review by our real estate site approval committee, which includes most of senior management, and monitor restaurants’ ongoing performances to inform future site selection decisions.

Restaurant Design

After identifying a lease site, we commence our restaurant buildout. Our typical restaurant is an inline retail space that ranges in size from 1,200 to 2,000 square feet. Our restaurants are characterized by a unique exterior and interior design, color schemes, and layout, including specially designed decor and furnishings. Restaurant interiors incorporate modern designs and rich colors in an effort to provide a clean and inviting environment and fun, family-friendly atmosphere. Each restaurant is designed in accordance with plans we develop; and constructed with a similar design motif and trade dress. Restaurants are generally located near other business establishments that will attract customers who desire healthier food at fair prices served in a casual, fun environment.

In addition to our standard restaurants, we have three Muscle Maker Grill Express locations as of December 31, 2015, which are restaurants located in or attached to another business or other structures such as shopping malls, food courts, travel plazas, grocery stores, college campuses, airports, military bases or convention centers or sports arenas, that may be as small as 250 square feet and as large as 1,500 square feet. Muscle Maker Grill Express locations may be part of a larger structure or complex.

Our new restaurants are typically inline buildouts. We estimate that each inline buildout of a restaurant will require an average total cash investment of approximately $180,000, net of tenant allowances. On average, it takes us approximately 4 to 6 months from identification of the specific site to opening the restaurant. In order to maintain consistency of food and customer service, as well as our colorful, bright and contemporary restaurant environment, we have set processes and timelines to follow for all restaurant openings.

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Our restaurants are built-out in approximately 10 weeks and the development and construction of our new sites is the responsibility of our Development Department. Several real estate managers are responsible for locating and leasing potential restaurant sites. Construction managers are then responsible for building the restaurants, and several staff members manage purchasing, budgeting, scheduling and other related administrative functions.

Restaurant Management and Operations

Service

We are extremely focused on customer service. We aim to provide fast, friendly service on a solid foundation of dedicated, driven team members and managers. Our cashiers are trained on the menu items we offer and offer customers thoughtful suggestions to enhance the ordering process. Our team members and managers are responsible for our dining room environment, personally visiting tables to ensure every customer’s satisfaction, and monitoring the fresh salsa bar and beverage station for cleanliness and an ample supply of products.

Operations

We utilize systems that are aimed at measuring our ability to deliver a “best in class” experience for our customers. These systems include customer surveys, mystery shopper scores and speed of service performance trends. The operational results from all of these sources are then presented on an operations dashboard that displays the measures in an easy-to-read online format that corporate and restaurant-level management and franchisees can utilize in order to identify strengths and opportunities and develop specific plans for continuous performance improvement.

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We measure the execution of our system standards within each restaurant through our commitment to our audit program for quality, service and cleanliness. These audits are conducted in each restaurant quarterly, but may be more frequent based upon restaurant performance. Additionally, we have food safety and quality assurance programs designed to maintain the highest standards for food and food preparation procedures used by both company-operated and franchised restaurants. We employ a team of quality assurance managers and third party auditors that perform our restaurant audits.

Managers and Team Members

Each of our restaurants typically has a general manager, an assistant manager, 2 to 4 shift leaders, and 2 team leaders. There are between 4 and 6 team members who prepare our food fresh daily and provide customer service. To lead our restaurant management teams, we have area leaders, each of whom is responsible for 5 to 15 restaurants. Overseeing the area leaders are 2 directors of operations, each responsible for 25 to 30 restaurants. The vice president of corporate operations leads our company-operated restaurants, managing both sales and profitability targets.

We are selective in our hiring processes, aiming to staff our restaurants with team members that are friendly, customer focused, and driven to provide high-quality products. We employ a unique approach to selecting future team members. Our team members are cross-trained in several disciplines to maximize depth of competency and efficiency in critical restaurant functions. Our focus on hiring the best possible employees has enabled us to develop a culture that breeds loyalty throughout our employee base. Many team members and managers have been employed by us for longer than 5 years, and it is not rare to identify team members with more than 7 years of seniority.

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Training

We believe we have created a culture of constant learning. On the first day of employment, team members are introduced to our training program, which is a comprehensive training program developed to lead team members through the training process in easy to use, function-based, educational videos. Each team member can learn at their own pace, focusing on the videos that apply to their initial role on the restaurant team.

The vast majority of our restaurant management staff is comprised of former team members who have advanced along the Muscle Maker Grill career path. Skilled team members who display leadership qualities are encouraged to enter the team leader training program. Successive steps along the management path add increasing levels of duties and responsibilities. Each stage in the management training path requires greater training periods, culminating in the general manager training process, comprised of seven weeks of intensive classroom and hands-on training in a certified training restaurant.

Franchise Program

Overview

We use a franchising strategy to increase new restaurant growth in certain markets, leveraging the ownership of entrepreneurs with specific local market expertise and requiring a relatively minimal capital commitment by us. As of June 30, 2016, there were a total of 43 franchised restaurants. Franchisees range in size from single-restaurant operators to the largest franchisee, which owned 4 restaurants as of June 30, 2016. Our existing franchise base consists of many successful, longstanding, multi-unit restaurant operators. As of June 30, 2016, approximately 42% of franchised restaurants were owned and operated by franchisees that have been with us for more than 4 years. Since the beginning of 2008, our franchisees have opened 43 new Muscle Maker Grill restaurants (net), representing a 2,150% net increase from 2008 to June 30, 2016.

We believe the franchise revenue generated from our franchise base has historically served as an important source of stable and recurring cash flows to us and, as such, we plan to expand our base of franchised restaurants. In existing markets, we encourage growth from current franchisees. In our expansion markets, we seek highly qualified and experienced new franchisees for multi-unit development opportunities. We seek franchisees of successful, non- competitive brands operating in our expansion markets. Through strategic networking and participation in select franchise conferences, we aim to identify highly-qualified prospects. Additionally, we market our franchise opportunities with the support of a franchising section on our website and printed brochures.

Franchise Owner Support

We believe creating a foundation of initial and on-going support is important to future success for both our franchisees and our brand. For that reason, we have structured our corporate staff, programs and communication systems to ensure that we are delivering high-quality support to our franchisees.

We have a mandatory training program that was designed to ensure that our franchise owners and their managers are equipped with the knowledge and skills necessary for success. The program consists of hands-on training in the operation and management of the restaurant. Training is conducted by a general training manager who has been certified by us for training. Instructional materials for the initial training program include our operations manual, crew training system, wall charts, job aids, recipe books, product build cards, management training materials, food safety book, videos and other materials we may create from time to time. Training must be successfully completed before a trainee can be assigned to a restaurant as a manager.

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We also provide numerous opportunities for communication and shared feedback between us and franchise owners. Currently, we hold a franchise business update for all franchisees each quarter which includes multi-functional company representation and executive attendance. On a semi-annual basis, we meet with our franchise leadership team and marketing advisory committee to share ideas and resolve issues. Yearly we hold a conference for our franchisees, vendors and company leaders to celebrate our shared successes, discuss best practices and set the course for the following year.

Franchise Arrangements

Muscle Maker Brands, our majority-owned subsidiary, became the franchisor of Muscle Maker Grill restaurants on March 1, 2015 upon receipt of the operating assets of the franchise system formerly held by Muscle Maker Franchising. At the time of the acquisition, we succeeded to Muscle Maker Franchising’s rights and obligations under 40 franchise agreements for the operation of 40 Muscle Maker Grill franchise restaurants. At June 30, 2016, Muscle Maker Brands franchises the operation of a total of 43 Muscle Maker Grill restaurants.

The franchise agreements we succeeded to:

● Have terms for 15 years, with termination dates ranging from 2023 until 2030. These agreements are generally renewable for terms ranging from 5 to 10 years.

● Provide for the payment of initial franchise fees of $35,000.

● Require the payment of on-going royalty payments of 5% of gross revenues at the franchise location.

Since our acquisition of franchise assets from Muscle Maker Franchising, we have undertaken an extensive review of the terms and conditions of our franchise relationships and have recently finalized the terms of our revised standard franchise agreement and multi-unit development agreement which we intend to govern the relationship between Muscle Maker Brands and its new franchisees. Under this franchise agreement:

● Franchisees are licensed the right to use the Muscle Maker Grill® trademarks, its confidential operating manual and other intellectual property in connection with the operation of a Muscle Maker Grill restaurant at a location authorized by us.

● Franchisees are protected from the establishment of another Muscle Maker Grill restaurant within a geographic territory, the scope of which is the subject of negotiation between Muscle Maker Brands and the franchisee.

● The initial term of a franchise is 15 years, which may be renewed for up to two additional terms of five years each.

● Franchisees pay Muscle Maker Brands an initial franchise fee of $35,000 in a lump sum at the time the Franchise Agreement is signed; however, we may offer financing assistance under certain circumstances.

● Franchisees pay Muscle Maker Brands an on-going royalty in an amount equal to 5% of gross sales at the franchise location, payable weekly.

● Franchisees pay a weekly amount equal to 2% of gross revenues at the franchise location into a cooperative advertising fund for the benefit of all franchisees; except that until a regional advertising program is established, the advertising fee is retained and used by franchisees for local market advertising. In addition, franchisees pay an amount equal to 1% of gross sales into a brand development fund administered by Muscle Maker Brands.

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● A company affiliated with us receives a software license fee of $3,750 for our proprietary Muscle Power (R Power) computer software, payable in a lump sum at the time the franchisee orders the required electronic cash register/computer system from our affiliate.

● Franchisees are required to offer only those food products that are authorized by Muscle Maker Brands, prepared using our proprietary recipes; and may obtain most supplies only from suppliers that are approved or designated by Muscle Maker Brands.

● As partial consideration for payment of the initial franchise fee and on-going royalties, Muscle Maker Brands loans its franchisees a copy of its confidential operating manual, administers the advertising fund and brand development fund, and provides franchisees with pre-opening and on-going assistance including site selection assistance, pre-opening training, and in-term training

Franchisees who desire to develop more than one restaurant and who have the financial strength and managerial capability to develop more than one restaurant may enter into a Multi-Unit Agreement. Under a multi-unit development agreement, the franchisee agrees to open a specified number of restaurants, at least two, within a defined geographic area in accordance with an agreed upon development schedule. Each restaurant requires the execution of a separate Franchise Agreement, which will be the then current Franchise Agreement, except that the initial franchise fee, royalty and advertising expenditures will be those in effect at the time the multi-unit agreement is executed. Multi-Unit Agreements require the payment of a development fee (the “Development Fee”) equal to $35,000 for the first restaurant plus $17,500 multiplied by the number of additional Muscle Maker Grill® restaurants that must be opened under the Development Agreement. The entire Development Fee is payable at the time the Multi-Unit Agreement is signed; however, the development fee actually paid for a particular restaurant is credited as a deposit against the initial franchise fee that is payable when the Franchise Agreement for the particular franchise is signed.

Marketing and Advertising

We promote our restaurants and products through our advertising campaign. The campaign aims to deliver our message of going to whatever lengths necessary to deliver fresh and healthier product offerings. The campaign emphasizes our points of differentiation, from our fresh ingredients and scratch preparation, to the preparation of our healthy inspired meals.

We use multiple marketing channels, including [television] to broadly drive brand awareness and purchases of our featured products. We advertise on [local network, radio and cable television] in our primary markets, and utilize [heavier cable schedules] for some of our less developed markets. We complement this with [direct mail] and our Muscle Maker Grill Rewards e-mail marketing program, which allows us to reach more than 4,000 members. Muscle Maker Grill Rewards is our e-club program. We engage members via e-mails featuring news of promotional offers, member rewards and product previews. Muscle Maker Grill Rewards also allows members to voice their opinions through surveys that provide us with information that helps us define future product concepts. In addition, we use our database to survey and solicit new product ideas, which allows us to create a comprehensive product calendar that extends 12 months forward.

Through our public relations efforts we engage notable food editors and bloggers on a range of topics to help promote our products. In addition, we engage in one on one conversations using a portfolio of social media platforms which include Facebook, Twitter and Instagram. We also use social media as a research and customer service tool, and apply insight we gain to future marketing efforts.

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We became the successor franchisor of Muscle Maker Grill restaurants on March 1, 2015 upon receipt of the operating assets of the franchise system formerly held by Muscle Maker Franchising. We began to offer franchises as the successor in March 2015. We succeeded as the successor to various area representative agreements that had been entered into by our predecessor, Muscle Maker Franchising. Under the area representative agreements that we succeeded to, the area representatives will identify and refer prospective franchisee candidates to us, provide franchisees with our site selection criteria and assist franchisees to complete a site review package, and will advise franchisees concerning our standards and specifications and make on-site visits, but we retain control of all decision-making authority relative to the franchisees, including franchisee approval, site location approval and determination whether franchisees are in compliance with their franchise agreements.

Area representative agreements are generally for a term of 15 years, in consideration for which we generally compensate area representatives with 1% of net sales of the franchises that are under the area representative for the 15 year term, payable quarterly.

Purchasing and Distribution

Maintaining a high degree of quality in our restaurants depends in part on our ability to acquire fresh ingredients and other necessary supplies that meet our specifications from reliable suppliers. We regularly inspect vendors to ensure that products purchased conform to our standards and that prices offered are competitive. We have a quality assurance team that performs comprehensive supplier audits on a frequency schedule based on the potential food safety risk of each product. We contract with Sysco (our “primary distributor”), a major foodservice distributor, for substantially all of our food and supplies. Our primary distributor delivers supplies to most of our restaurants one to two times per week. Our distributor relationship with our primary distributor has been in place since 2007. Our franchisees are required to use our primary distributor or an approved regional distributor and franchisees must purchase food and supplies from approved suppliers. In our normal course of business, we evaluate bids from multiple suppliers for various products. Fluctuations in supply and prices can significantly impact our restaurant service and profit performance. We actively manage cost volatility for food and supplies by negotiating with multiple suppliers and entering into what we believe are the most favorable contract terms given existing market conditions. In the past, we have entered into contracts ranging from twelve months to five years depending on current and expected market conditions. We currently source from six suppliers with six accounting for approximately 95% of our planned purchases in 2016. We have entered into fixed price contracts with our six largest food suppliers through the end of 2017 with pricing generally favorable to current spot prices.

Intellectual Property

We have registered Muscle Maker Grill^® and certain other names used by our restaurants as trademarks or service marks with the United States Patent and Trademark Office and Muscle Maker Grill^® in approximately two foreign countries. Our current brand campaign, Great Food with Your Health in Mind™, has also been approved for registration with the United States Patent and Trademark Office. In addition, the Muscle Maker Grill logo, website name and address and Facebook and Twitter accounts are our intellectual property. Our policy is to pursue and maintain registration of service marks and trademarks in those countries where business strategy requires us to do so and to oppose vigorously any infringement or dilution of the service marks or trademarks in such countries. We maintain the recipe for our healthy inspired recipes, as well as certain proprietary standards, specifications and operating procedures, as trade secrets or confidential proprietary information.

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We are the owner of the trade name and service mark Muscle Maker Grill® and other trademarks and intellectual property we use in connection with the operation of Muscle Maker Grill® restaurants. We license the right to use the Muscle Maker Grill® trademarks and intellectual property to our wholly-owned subsidiary, Muscle Maker Brands, and to further sublicense them to our franchisees for use in connection with Muscle Maker Grill® restaurants.

Competition

We operate in the restaurant industry, which is highly competitive and fragmented. The number, size and strength of competitors vary by region. Our competition includes a variety of locally owned restaurants and national and regional chains that offer dine-in, carry-out and delivery services. Our competition in the broadest perspective includes restaurants, pizza parlors, convenience food stores, delicatessens, supermarkets and club stores. There are no significant direct competitors with respect to menus that feature our healthy inspired offerings . However, we indirectly compete with fast casual restaurants, including Chipotle and Panera Bread, among others, and with healthy inspired fast casual restaurants, such as the Protein Bar and Veggie Grill, among others.

We believe competition within the fast casual restaurant segment is based primarily on ambience, price, taste, quality and the freshness of the menu items. We also believe that QSR competition is based primarily on quality, taste, speed of service, value, brand recognition, restaurant location and customer service. In addition, we compete with franchisors of other restaurant concepts for prospective franchisees.

Environmental Matters

We are subject to federal, state and local laws and regulations relating to environmental protection, including regulation of discharges into the air and water, storage and disposal of waste and clean-up of contaminated soil and groundwater. Under various federal, state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of hazardous or toxic substances on, in or emanating from such property. Such liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances, and in some cases we may have obligations imposed by indemnity provisions in our leases.

We have not conducted a comprehensive environmental review of all of our properties, although for new company development, a Phase I environmental review is typically completed, and when advisable, a Phase II review, prior to the company undertaking a long-term lease. No assurance can be given that we have identified all of the potential environmental liabilities at our properties or that such liabilities will not have a material adverse effect on our financial condition.

Regulation and Compliance

We are subject to extensive federal, state and local government regulation, including those relating to, among others, public health and safety, zoning and fire codes, and franchising. Failure to obtain or retain food or other licenses and registrations or exemptions would adversely affect the operations of restaurants. Although we have not experienced and do not anticipate any significant problems in obtaining required licenses, permits or approvals, any difficulties, delays or failures in obtaining such licenses, permits, registrations, exemptions, or approvals could delay or prevent the opening of, or adversely impact the viability of, a restaurant in a particular area.

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The development and construction of additional restaurants will be subject to compliance with applicable zoning, land use and environmental regulations. We believe federal and state environmental regulations have not had a material effect on operations, but more stringent and varied requirements of local government bodies with respect to zoning, land use and environmental factors could delay construction and increase development costs for new restaurants.

We are also subject to the Fair Labor Standards Act, the Immigration Reform and Control Act of 1986 and various federal and state laws governing such matters as minimum wages, overtime, unemployment tax rates, workers’ compensation rates, citizenship requirements and other working conditions. A significant portion of the hourly staff is paid at rates consistent with the applicable federal or state minimum wage and, accordingly, increases in the minimum wage will increase labor costs. In addition, the PPACA increased medical costs beginning in fiscal 2015. We are also subject to the Americans With Disabilities Act, which prohibits discrimination on the basis of disability in public accommodations and employment, which may require us to design or modify our restaurants to make reasonable accommodations for disabled persons.

In addition, we must comply with regulations adopted by the Federal Trade Commission, or the FTC, and with several state laws that regulate the offer and sale of franchises. The FTC’s Trade Regulation Rule on Franchising, or the FTC Rule, and certain state laws require that we furnish prospective franchisees with a franchise offering circular containing information prescribed by the FTC Rule and applicable state laws and regulations.

We also must comply with a number of state laws that regulate some substantive aspects of the franchisor-franchisee relationship. These laws may limit a franchisor’s ability to: terminate or not renew a franchise without good cause; prohibit interference with the right of free association among franchisees; alter franchise agreements; disapprove the transfer of a franchise; discriminate among franchisees with regard to charges, royalties and other fees; and place new stores near existing franchises. Bills intended to regulate certain aspects of franchise relationships have been introduced into Congress on several occasions during the last decade, but none have been enacted.

For a discussion of the various risks we face from regulation and compliance matters, see “Risk Factors.”

Management Information Systems

All of our company-operated and franchised restaurants use computerized point-of-sale and back office systems, which we believe are scalable to support our long-term growth plans. The point-of-sale system provides a touch screen interface and integrated, high speed credit card and gift card processing. The point-of-sale system is used to collect daily transaction data, which generates information about daily sales and product mix that we actively analyze.

Our in-restaurant back office computer system is designed to assist in the management of our restaurants and provide labor and food cost management tools. The system also provides corporate headquarters and restaurant operations management quick access to detailed business data and reduces the time spent by our restaurant managers on administrative needs. The system also provides sales, bank deposit and variance data to our accounting department on a daily basis. For company-operated restaurants, we use this data to generate weekly consolidated reports regarding sales and other key measures, as well as preliminary weekly profit and loss statements for each location with final reports following the end of each period.

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Corporate History and Development of Business

Our founder, Rodney Silva, established Muscle Maker Nutrition Center, Inc., a New Jersey corporation, on November 15, 1995 (“MMNC”). MMNC owned and operated the original Muscle Maker Grill restaurant in Colonia, New Jersey, from December 1995 until September 2010. At that time, MMNC owned the “Muscle Maker Grill” trademark and other intellectual property (the “Marks”) as well as ownership of certain systems relating to the establishment, development and operation of a Muscle Maker Grill restaurant (the “System”).

On November 20, 2007, Rodney Silva established Muscle Maker Franchising, LLC, a New Jersey limited liability company, and, in December 2007, Muscle Maker Franchising acquired all of MMNC’s right, title and interest in and to the Marks and the System. Thereafter, in September 2010, Muscle Maker Franchising acquired the Colonia, New Jersey Muscle Maker Grill restaurant through MMF Colonia, Inc., a New Jersey corporation, formed on August 6, 2010 (“MMF Colonia”), a wholly-owned operating subsidiary of Muscle Maker Franchising.

From September 2010 until January 2015, Muscle Maker Franchising continued to operate the Colonia, New Jersey restaurant and, in addition, sold franchises to operate 36 Muscle Maker Grill restaurants.

Muscle Maker, Inc. (“Muscle Maker”), was incorporated by American Restaurant Holdings (“American Restaurant Holdings”) in California on December 8, 2014, and is a majority owner of Muscle Maker Brands, LLC (“Muscle Maker Brands”). Muscle Maker Brands’ subsidiaries include company owned restaurants as well as Custom Technology, Inc, (“CTI”) a technology and point of sale (“POS”) systems dealer and technology consultant (Muscle Maker together with Muscle Maker Brands and its subsidiaries are referred to herein collectively as the “Company”). Muscle Maker Brands was formed on December 22, 2014 in the state of California for the purpose of acquiring and operating company owned restaurants, as well as franchising its name and business system to qualified franchisees. Muscle Maker Franchising, LLC (“Muscle Maker Franchising”) was founded in 1995 in order to develop a brand of healthy-option fast food restaurants.

Formation

On December 22, 2014, Muscle Maker issued 100,000 shares of its common stock to the Chief Executive Officer of American Restaurant Holdings as founder shares for cash proceeds of $10.

Acquisition of 74% of Muscle Maker Brands

On January 23, 2015, Muscle Maker, Muscle Maker Brands and Muscle Maker Franchising entered into a Unit Purchase Agreement whereby Muscle Maker Brands purchased substantially all of the assets and liabilities of Muscle Maker Franchising, Muscle Maker acquired 7,400 membership units of Muscle Maker Brands (representing 74% of the membership units of Muscle Maker Brands), and certain members of Muscle Maker Franchising (“MMF Members”) acquired 2,600 membership units of Muscle Maker Brands (representing 26% of the membership units of Muscle Maker Brands). (the “MMG Acquisition”). The aggregate purchase consideration for Muscle Maker’s membership interest in Muscle Maker Brands was $4,244,000 and consisted of $3,570,000 in cash, $604,000 of promissory notes (consisting of a $400,000 promissory note (“MM Note”) from Muscle Maker and a $204,000 promissory note (“MMB Note”) from Muscle Maker Brands) and 500,000 shares of common stock of Muscle Maker valued at $0.14 per share or $70,000 issued. On January 23, 2015, American Restaurant Holdings provided cash of $3,645,000 and an obligation to repay an aggregate of $604,000 of principal due under MM Note and MMB Note issued to Muscle Maker Franchising in order to facilitate the Muscle Maker Brands acquisition. Pursuant to the terms of the Unit Purchase Agreement, the MMF Members shall convert their non-controlling interest in Muscle Maker Brands into an aggregate of 14,475,676 shares of Muscle Maker common stock prior to the Company going public.

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On January 24, 2015, Muscle Maker granted 200,000 shares of its common stock valued at $0.14 per share to its Director of Brand Development, in connection with an employment agreement with the Director of Brand Development.

On January 24, 2015, the Company issued 428,571 shares of its common stock to the Director of Brand Development in exchange for cash proceeds of $0.14 per share, or $60,000.

On July 23, 2015 and August 28, 2015, the Company issued 750,000 and 500,000 shares of its common stock, and 5-year warrants for the purchase of 375,000 and 250,000 shares of common stock respectively, for aggregate cash proceeds of $750,000. The warrants are exercisable at $0.75 per share.

Springfield Acquisition

On May 4, 2015, Muscle Maker Brands acquired a business in Springfield, New Jersey, as a corporate store (the “Springfield Acquisition”). The purchase price of the store was $30,060, of which $8,670 related to equipment purchased and the remaining $21,390 was accounted for as goodwill.

CTI Acquisition

On August 1, 2015, the Company acquired 70% of the shares of Custom Technology, Inc. (“CTI”), a technology and point of sale (“POS”) systems dealer and technology consultant, in exchange for $70,000 in cash (the “CTI Acquisition”). CTI was formed on July 29, 2015 and entered into an asset purchase agreement on August 1, 2015 pursuant to which CTI purchased POS computer systems, cash registers, camera systems and related inventory and supplies from its predecessor entity.

Repayment of Promissory Notes regarding MMG Acquisition

The MMB Note was completely repaid on March 9, 2015. On July 21, 2015, January 23, 2016 and July 23, 2016, installments of $100,000, $150,000 and $150,000 were repaid on the balance of the MM Note. As of July 23, 2016, there is no balance outstanding related to MM Note.

Spin-Off of Muscle Maker by American Restaurant Holdings

On March 23, 2017, American Restaurant Holdings authorized and facilitated the distribution of 51,672,217 shares of Common Stock of Muscle Maker held by American Restaurants, LLC, the wholly owned subsidiary of American Restaurant Holdings, to the shareholders of American Restaurant Holdings (the “Spin-Off”). As a result of the Spin-Off on March 23, 2017, American Restaurant Holdings is no longer a majority owner of Muscle Maker.

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Recent Advances, Exchange of Advances for Convertible Notes, and Conversion of Convertible Notes to Shares of Common Stock

On December 31, 2015, Muscle Maker issued a promissory note in the amount of $1,082,620 (the “2015 ARH Note”) to American Restaurant Holdings. The 2015 ARH Note had no stated interest rate and was convertible into 2,165,240 shares of the Company’s stock at $0.50 per share.

During the period from July 1, 2016 through December 31, 2016, American Restaurant Holdings provided $1,364,842 of advances to Muscle Maker. These advances, combined with the $1,257,000 payable to American Restaurant Holdings as June 30, 2016 were exchanged for a convertible note in the amount of $2,621,842 (the “2016 ARH Note”). The 2016 ARH Note had no stated interest rate or maturity date and was convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the American Restaurant Holdings.

During the period from December 31, 2016 through February 15, 2017, American Restaurant Holdings provided $980,949 of advances to the Company. The payable due to American Restaurant Holdings as a result of these advances was exchanged for a convertible promissory note in the amount of $980,949 (the “2017 ARH Note”). The 2017 ARH Note has no stated interest rate or maturity date and is convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the lender.

On March 14, 2017, American Restaurant Holdings elected to convert: (a) the 2015 ARH Note in the principal amount of $1,082,620 into 2,165,240 shares of Common Stock of Muscle Maker at a conversion price of $0.50 per share; (b) the 2016 ARH Note in the principal amount of $2,621,842 into 6,554,604 shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share; and (c) the 2017 ARH Note in the principal amount of $980,949 into 2,452,373 shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share.

Issuances of Warrants

The Company issued the following warrants to purchase an aggregate of 3,827,442 shares of Common Stock of Muscle Maker: (a) a 5-year warrant to Dean Miles to purchase 625,000 shares of Common Stock of Muscle Maker at an exercise price of $0.75 per share, in connection with two private placements to Mr. Miles in 2015; (b) a 3-year warrant to American Restaurant Holdings to purchase of 2,294,112 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share, in connection with the exchange of advances for the 2016 ARH Note in 2016; (c) a 3-year warrant to American Restaurant Holdings to purchase of 858,330 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share, in connection with the exchange of advances for the 2017 ARH Note in 2017; and (d) a 3-year warrant to Prashant Shah to purchase of 50,000 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share.

Anticipated Exchange of Shares of Common Stock for Units of Muscle Maker Brands

Pursuant to the terms of the Unit Purchase Agreement, Muscle Maker anticipates engaging in a share exchange with the MMF Members prior to the Offering, pursuant to which Muscle Maker will issue an aggregate of 14,475,676 shares of its common stock to the MMF Members in exchange for the 2,600 membership units of Muscle Maker Brands owned by the MMF Members which were initially recorded at $1,466,541, representing 26% ownership interest in Muscle Maker Brands, in a tax-free exchange (“Anticipated Exchange”). As a result of this Anticipated Exchange, Muscle Maker Brands will become a wholly owned subsidiary of Muscle Maker. Pursuant to the terms of the Operating Agreement of Muscle Maker Brands, Muscle Maker operates and controls all of the business and affairs of Muscle Maker Brands and, through Muscle Maker Brands and its subsidiaries, conducts our business. Muscle Maker consolidates the financial results of Muscle Maker Brands in its consolidated financial statements.

Anticipated Grant of Shares of Common Stock to Employees and Consultants

Muscle Maker anticipates granting 1,115,000 shares of its common stock to its employees and consultants prior to this Offering.

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Organizational Structure

The diagram below depicts our organizational structure after this Offering:

This diagram assumes that (1) an aggregate of 14,475,676 shares of Common Stock have been issued by Muscle Maker to the MMF Members in exchange for their membership units of Muscle Maker Brands prior to this Offering and (2) an aggregate of 1,115,000 shares of Common Stock have been granted by Muscle Maker to employees and consultants of Muscle Maker prior to this Offering.

Employees

As of March 30, 2017, we had approximately 173 employees, of whom approximately 150 were restaurant employees and approximately 23 were support center personnel. None of our employees are part of a collective bargaining agreement, and we believe our relationships with our employees are satisfactory.

Legal Proceedings

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. There are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial condition and results of operations of Muscle Maker, Inc. (“Muscle Maker”), together with Muscle Maker Brands, LLC (“Muscle Maker Brands”) and including its subsidiaries, the (“Company”)) should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Offering Circular. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company. This Offering Circular includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Reference is made to “Risk Factors”, which are included elsewhere in this Offering Circular.

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OVERVIEW

We operate under the name Muscle Maker Grill as a franchisor and owner-operator of Muscle Maker Grill restaurants. As of June 30, 2016, our restaurant system included five Company-owned restaurants and 43 franchised restaurants. Our restaurants offer quality food, freshly prepared with our proprietary recipes created with the guest's health in mind. The menu is protein based and features various supplements and health food snacks, along with a nutritious children's menu.

The Muscle Maker Grill is a high-growth, fast casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based meals featuring chicken, seafood, pasta, burgers, wraps, and flat breads. In addition, we feature freshly prepared entrée salads and an appealing selection of sides, protein shakes and fruit smoothies. We operate in the approximately $34.5 billion fast casual restaurant segment, which we believe has created significant recent disruption in the restaurant industry and is rapidly gaining market share from adjacent restaurant segments, resulting in significant growth opportunities for restaurant concepts such as Muscle Maker Grill.

We believe our restaurant concept delivers a highly differentiated customer experience by combining the quality and hospitality that customers commonly associate with our full service and fast casual restaurant competitors with the convenience and value customers generally expect from traditional fast food restaurants. The foundation of our brand is based on our core values of quality, empowerment, respect, service and value.

Our disciplined growth strategy has enabled strong growth across all of our key performance metrics. The number of Muscle Maker Grill restaurants has grown from one location in one market in New Jersey as of November 20, 2007 under our predecessor to 51 locations in twelve states as of March 30, 2017 under us as the successor. We have grown our company-owned restaurant AUVs from approximately $600,000 in fiscal 2014 to approximately $625,000 in fiscal 2015, representing an increase of 4.2%. From fiscal 2014 to fiscal 2015, our company store restaurant sales increased from $754,957 to $1,032,558, and total company revenue increased from $2,980,877 to $3,124,823.

Operations

The first location opened in Colonia, New Jersey in 1995 by Rod Silva, a son of Brazilian immigrants and bodybuilder. Our restaurant concept has been, and continues to be built around a distinctive and diverse lien, protein based menu, headlined by healthy-inspired chicken, seafood, pasta, burgers, wraps and flat breads made-to-order. Our Chief Executive Officer, Robert Morgan, formerly with Pizza Hut and PepsiCo, joined Muscle Maker in 2007, that led to the franchising of Muscle Maker Grill. At the time Mr. Morgan joined, we had one location opened by Mr. Silva. Since then, we have grown our brand on a disciplined basis designed to capitalize on the large market opportunity available to us and, as of December 31, 2015, we had 46 locations. Our highly experienced management team has created and refined the infrastructure to create replicable restaurant-level systems, processes and training procedures that can deliver a high-quality experience that is designed to consistently exceed our customers’ expectations.

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Organization

Muscle Maker, Inc. (“Muscle Maker”), was incorporated by American Restaurant Holdings (“American Restaurant Holdings) in California on December 8, 2014, and is a majority owner of Muscle Maker Brands, LLC (“Muscle Maker Brands”). Muscle Maker Brands’ subsidiaries include company owned restaurants as well as Custom Technology, Inc, (“CTI”) a technology and point of sale (“POS”) systems dealer and technology consultant (Muscle Maker together with Muscle Maker Brands and its subsidiaries are referred to herein collectively as the “Company”). Muscle Maker Brands was formed on December 22, 2014 in the state of California for the purpose of acquiring and operating company owned restaurants, as well as franchising its name and business system to qualified franchisees. Muscle Maker Franchising, LLC (“Muscle Maker Franchising”) was founded in 1995 in order to develop a brand of healthy-option fast food restaurants.

Formation

On December 22, 2014, Muscle Maker issued 100,000 shares of its common stock to the Chief Executive Officer of American Restaurant Holdings as founder shares for cash proceeds of $10.

Acquisition of 74% of Muscle Maker Brands

On January 23, 2015, Muscle Maker, Muscle Maker Brands and Muscle Maker Franchising entered into a Unit Purchase Agreement whereby Muscle Maker Brands purchased substantially all of the assets and liabilities of Muscle Maker Franchising, Muscle Maker acquired 7,400 membership units of Muscle Maker Brands (representing 74% of the membership units of Muscle Maker Brands), and certain members of Muscle Maker Franchising (“MMF Members”) acquired 2,600 membership units of Muscle Maker Brands (representing 26% of the membership units of Muscle Maker Brands) (the “MMG Acquisition”). The aggregate purchase consideration for Muscle Maker’s membership interest in Muscle Maker Brands was $4,244,000 and consisted of $3,570,000 in cash, $604,000 of promissory notes (consisting of a $400,000 promissory note (“MM Note”) from Muscle Maker and a $204,000 promissory note (“MMB Note”) from Muscle Maker Brands) and 500,000 shares of common stock of Muscle Maker valued at $0.14 per share or $70,000 issued. On January 23, 2015, American Restaurant Holdings provided cash of $3,645,000 and an obligation to repay an aggregate of $604,000 of principal due under MM Note and MMB Note issued to Muscle Maker Franchising in order to facilitate the Muscle Maker Brands acquisition. Pursuant to the terms of the Unit Purchase Agreement, the MMF Members shall convert their non-controlling interest in Muscle Maker Brands into an aggregate of 14,475,676 shares of Muscle Maker common stock prior to the Company going public.

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On January 24, 2015, Muscle Maker granted 200,000 shares of its common stock valued at $0.14 per share to its Director of Brand Development, in connection with an employment agreement with the Director of Brand Development.

On January 24, 2015, the Company issued 428,571 shares of its common stock to the Director of Brand Development in exchange for cash proceeds of $0.14 per share, or $60,000.

On July 23, 2015 and August 28, 2015, the Company issued 750,000 and 500,000 shares of its common stock, and 5-year warrants for the purchase of 375,000 and 250,000 shares of common stock respectively, for aggregate cash proceeds of $750,000. The warrants are exercisable at $0.75 per share.

Springfield Acquisition

On May 4, 2015, Muscle Maker Brands acquired a business in Springfield, New Jersey, as a corporate store (the “Springfield Acquisition”). The purchase price of the store was $30,060, of which $8,670 related to equipment purchased and the remaining $21,390 was accounted for as goodwill.

CTI Acquisition

On August 1, 2015, the Company acquired 70% of the shares of Custom Technology, Inc. (“CTI”), a technology and point of sale (“POS”) systems dealer and technology consultant, in exchange for $70,000 in cash (the “CTI Acquisition”). CTI was formed on July 29, 2015 and entered into an asset purchase agreement on August 1, 2015 pursuant to which CTI purchased POS computer systems, cash registers, camera systems and related inventory and supplies from its predecessor entity.

Repayment of Promissory Notes regarding MMG Acquisition

The MMB Note was completely repaid on March 9, 2015. On July 21, 2015, January 23, 2016 and July 23, 2016, installments of $100,000, $150,000 and $150,000 were repaid on the balance of the MM Note. As of July 23, 2016, there is no balance outstanding related to MM Note.

Spin-Off of Muscle Maker by American Restaurant Holdings

On March 23, 2017, American Restaurant Holdings authorized and facilitated the distribution of 51,672,217 shares of Common Stock of Muscle Maker held by American Restaurants, LLC, the wholly owned subsidiary of American Restaurant Holdings, to the shareholders of American Restaurant Holdings (the “Spin-Off”). As a result of the Spin-Off on March 23, 2017, American Restaurant Holdings is no longer a majority owner of Muscle Maker.

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Recent Advances, Exchange of Advances for Convertible Notes, and Conversion of Convertible Notes to Shares of Common Stock

On December 31, 2015, Muscle Maker issued a promissory note in the amount of $1,082,620 (the “2015 ARH Note”) to American Restaurant Holdings. The 2015 ARH Note had no stated interest rate and was convertible into 2,165,240 shares of the Company’s stock at $0.50 per share.

During the period from July 1, 2016 through December 31, 2016, American Restaurant Holdings provided $1,364,842 of advances to Muscle Maker. These advances, combined with the $1,257,000 payable to American Restaurant Holdings as June 30, 2016 were exchanged for a convertible note in the amount of $2,621,842 (the “2016 ARH Note”). The 2016 ARH Note had no stated interest rate or maturity date and was convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the American Restaurant Holdings.

During the period from December 31, 2016 through February 15, 2017, American Restaurant Holdings provided $980,949 of advances to the Company. The payable due to American Restaurant Holdings as a result of these advances was exchanged for a convertible promissory note in the amount of $980,949 (the “2017 ARH Note”). The 2017 ARH Note has no stated interest rate or maturity date and is convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the lender.

On March 14, 2017, American Restaurant Holdings elected to convert: (a) the 2015 ARH Note in the principal amount of $1,082,620 into 2,165,240 shares of Common Stock of Muscle Maker at a conversion price of $0.50 per share; (b) the 2016 ARH Note in the principal amount of $2,621,842 into 6,554,604 shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share; and (c) the 2017 ARH Note in the principal amount of $980,949 into 2,452,373 shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share.

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Issuances of Warrants

The Company issued the following warrants to purchase an aggregate of 3,827,442 shares of Common Stock of Muscle Maker: (a) a 5-year warrant to Dean Miles to purchase 625,000 shares of Common Stock of Muscle Maker at an exercise price of $0.75 per share, in connection with two private placements to Mr. Miles in 2015; (b) a 3-year warrant to American Restaurant Holdings to purchase of 2,294,112 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share, in connection with the exchange of advances for the 2016 ARH Note in 2016; (c) a 3-year warrant to American Restaurant Holdings to purchase of 858,330 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share, in connection with the exchange of advances for the 2017 ARH Note in 2017; and (d) a 3-year warrant to Prashant Shah to purchase of 50,000 shares of Common Stock of Muscle Maker at an exercise price of $1.00 per share.

Anticipated Exchange of Shares of Common Stock for Units of Muscle Maker Brands

Pursuant to the terms of the Unit Purchase Agreement, Muscle Maker anticipates engaging in a share exchange with the MMF Members prior to the Offering, pursuant to which Muscle Maker will issue an aggregate of 14,475,676 shares of its common stock to the MMF Members in exchange for the 2,600 membership units of Muscle Maker Brands owned by the MMF Members which were initially recorded at $1,466,541, representing 26% ownership interest in Muscle Maker Brands, in a tax-free exchange (“Anticipated Exchange”). As a result of this Anticipated Exchange, Muscle Maker Brands will become a wholly owned subsidiary of Muscle Maker. Pursuant to the terms of the Operating Agreement of Muscle Maker Brands, Muscle Maker operates and controls all of the business and affairs of Muscle Maker Brands and, through Muscle Maker Brands and its subsidiaries, conducts our business. Muscle Maker consolidates the financial results of Muscle Maker Brands in its consolidated financial statements.

Anticipated Grant of Shares of Common Stock to Employees and Consultants

Muscle Maker anticipates granting 1,115,000 shares of its common stock to its employees and consultants prior to this Offering.

Corporate Structure

The diagram below depicts our organizational structure after this Offering:

This diagram assumes that (1) an aggregate of 14,475,676 shares of Common Stock have been issued by Muscle Maker to the MMF Members in exchange for their membership units of Muscle Maker Brands prior to this Offering and (2) an aggregate of 1,115,000 shares of Common Stock have been granted by Muscle Maker to employees and consultants of Muscle Maker prior to this Offering.

Growth Strategies and Outlook

We plan to pursue the following strategies to continue to grow our revenues and profits.

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Continue to Open New Company-Operated and Franchised Restaurants. We believe we are in the early stages of our growth story. We had 48 system wide restaurants in ten states as of June 30, 2016, including franchised locations. In fiscal 2015, we opened one company-operated restaurants and seven franchised restaurants. For the year ended December 31, 2016, we opened six new company-operated and four new franchised restaurants. In 2017, we intend to open between 15 and 20 new company-operated and 15 new franchised restaurants, including military bases, across Arizona, California, Florida, Georgia, Illinois, Louisiana, Kansas, Massachusetts, Nebraska, New Jersey, New York, Nevada, North Carolina, Pennsylvania, Texas, Washington and Internationally. Over the long-term, we plan to continue growing the number of Muscle Maker Grill system-wide restaurants by approximately 30% to 50% annually, while maintaining a similar proportion of company-operated and franchised units. However, these growth rates cannot be guaranteed.

Drive Comparable Restaurant Sales. We plan to continue delivering comparable restaurant sales growth by attracting new customers through expanding our brand awareness with new restaurant openings and marketing efforts, increasing existing customer frequency by providing an enhanced service experience and continuing to grow across each of our dayparts.

Continue to Enhance Profitability. We focus on improving our profitability while also investing in personnel and infrastructure to support our future growth. We will seek to further enhance margins over the long-term by maintaining fiscal discipline and leveraging fixed costs.

Key Measures We Use to Evaluate Our Performance

To evaluate the performance of our business, we utilize a variety of financial and performance measures. These key measures include company restaurant revenues, franchise royalty and other franchise revenues, system-wide AUVs, comparable restaurant sales, new restaurant openings and net income.

Franchise Royalty and Other Franchise Revenues

Franchise restaurant revenues consist of royalty income, including franchise royalty, and other franchise revenues, including initial and renewal franchise fees.

Company-Operated Restaurant Revenue

Company-operated restaurant revenue consists of sales of food and beverages in company-operated restaurants net of promotional allowances, employee meals and other discounts. Company restaurant revenues in a period are influenced by several factors, including the number of operating days in such period, the number of open restaurants and comparable restaurant sales growth. While we expect the majority of our total revenue growth will be driven by franchised restaurants, our company-operated restaurants and growth in revenues from company-operated restaurants remain an important part of our financial success.

Seasonal factors and the timing of holidays cause our revenue to fluctuate from quarter to quarter. Our revenue per restaurant is typically lower in the fourth quarter due to reduced December traffic and higher traffic in the first, second, and third quarters. As a result of seasonality, our quarterly and annual results of operations and key performance indicators such as company restaurant revenue and comparable restaurant sales may fluctuate.

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System-wide Average Unit Volumes

We measure system-wide, franchised and company-operated average unit volumes, or AUVs, on a fiscal year basis. Annual AUVs are calculated using the following methodology: first, we determine the restaurants that have been open for a full 15-month period; and second, we calculate the revenues for these restaurants and divide by the number of restaurants in that base to arrive at our AUV calculation.

Comparable Restaurant Sales

Comparable restaurant sales reflects the change in year-over-year sales for the comparable restaurant base. A restaurant enters our comparable restaurant base the first full day of the month after being open for 15-months using a mid-month convention. While we do not record franchised sales as revenues, our royalty revenues are calculated based on a percentage of franchised restaurant sales.

	Six-Months Ended			Fiscal Year Ended
	June 30, 2016			2015			2014
Comparable Restaurant Sales
Company-Operated		(4.9	)%		1.3	%		21.7	%
Franchised		2.1	%		2.3	%		23.0	%
Total System-wide		1.8	%		2.3	%		23.0	%

New Restaurant Openings

The number of restaurant openings reflects the number of restaurants opened during a particular reporting period. Before we open new company-operated restaurants, we incur preopening costs. System-wide, some of our new restaurants open with an initial start-up period of higher than normal sales volume, which subsequently decreases to stabilized levels. New company-operated restaurants typically experience normal inefficiencies such as higher food and supplies, labor and other direct operating costs and, as a result, restaurant contribution margins are typically lower during the start-up period of operations. In addition, new restaurants typically have high occupancy costs compared to existing restaurants. When entering new markets, we may be exposed to longer start-up times and lower contribution margins than reflected in our average historical experience.

Restaurant openings, closures and refranchised

	Six Months Ended		Fiscal Year Ended
	June 30, 2016		2015		2014
Company-operated restaurant activity:
Beginning of period		2		1		1
Openings		3		1		0
Refranchised		0		0		0
Closures		0		0		0
Restaurants at end of period		5		2		1
Franchised restaurant activity:
Beginning of period		44		53		60
Openings		1		7		12
Refranchised		0		1		0
Closures		2		15		19
Restaurants at end of period		43		44		53
Total restaurant activity:
Beginning of period		46		54		61
Openings		4		8		12
Closures		2		16		19
Restaurants at end of period		48		46		54

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During the six-months ended June 30, 2016, we and our franchisees opened four restaurants of which three were company-operated and one was franchised. In fiscal 2015, we and our franchisees opened eight restaurants of which one was company-operated and seven were franchised. In fiscal 2014, we and our franchisees opened twelve restaurants of which none were company-operated and twelve were franchised. From time to time we and our franchisees may close or relocate restaurants. A relocation results in a closure and an opening.

During the six-months ended June 30, 2016, we closed no company-operated restaurants and our franchisees closed two restaurants, of which none were a relocation. For fiscal 2015, we closed no company-operated restaurants and our franchisees closed 15 restaurants, of which one was a relocation. For fiscal 2014, we closed no company-operated restaurants, and our franchisees closed 19 restaurants, of which none were a relocation.

Key Financial Definitions

Total Revenues

Our revenues are derived from two primary sources: company restaurant revenues and franchise revenues. Franchise revenues are comprised of franchise royalty revenues and, to a lesser extent, other franchise revenues which include initial and renewal franchisee fees.

Food and Beverage Costs

Food and beverage costs include the direct costs associated with food, beverage and packaging of our menu items at company-operated restaurants. The components of food and supplies are variable in nature, change with sales volume, are affected by menu mix and are subject to fluctuations in commodity costs.

Compensation Expense

Restaurant labor costs, including preopening labor, consist of company-operated restaurant-level management and hourly labor costs, including salaries, wages, payroll taxes, workers’ compensation expense, benefits and bonuses paid to our company-operated restaurant-level team members. Like other cost items, we expect restaurant labor costs at our company-operated restaurants to grow due to inflation and as our company restaurant revenues grows. Factors that influence labor costs include minimum wage and employer payroll tax legislation, health care costs and the performance of our restaurants. The Patient Protection and Affordable Care Act has increased health care costs for our restaurants since the beginning of its enactment in fiscal 2015.

Depreciation and Amortization

Depreciation and amortization primarily consists of the depreciation of property and equipment and amortization of intangible assets at the restaurant level.

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General and Administrative Expenses

General and administrative expenses include expenses associated with corporate and administrative functions that support our operations, including travel expense, stock-based compensation expense, legal and professional fees, training, and other corporate costs. We expect we will incur incremental general and administrative expenses as a result of this offering and as a public company. This expense item also includes all other company-operated restaurant-level operating expenses, such as repairs and maintenance, utilities, credit and debit card processing, occupancy expenses and other restaurant operating costs. In addition, our advertising costs are included in operating costs and are comprised of our company-operated restaurants’ portion of spending on all advertising which includes, but is not limited to, television, radio, social media, billboards, point-of-sale materials, sponsorships, and creation of media, such as commercials and marketing campaigns.

Interest Expense

Interest expense primarily consists of amortization of debt discounts on the 2015 ARH Note.

Income Taxes

Income taxes represent federal, state, and local current and deferred income tax expense.

Consolidated Results of Operations

Our financial statement presentation distinguishes a “Predecessor” for the periods prior to the Closing Date and a “Successor” for the periods following the Closing Date of the MMB Acquisition.

The operating results of the Company for the six months ended June 30, 2016, for the period from January 23, 2015 through December 31, 2015 and for the period from January 23, 2015 through June 30, 2015 are presented in the Successor period. The operating results of MMF and its subsidiary, MMF Colonia (“Colonia”) for the period from January 1, 2015 through January 22, 2015 and for the year ended December 31, 2014 are presented in the Predecessor period.

The Predecessor’s operations are substantially the same as the Successor’s operations. Therefore, for the purpose of comparing the results of our operations from period to period, we have combined the Predecessor results for the period from January 1, 2015 through January 22, 2015 with the Successor results for the period from January 23, 2015 through June 30, 2015 in order to present results for the six months ended June 30, 2015. In the same way, we have combined the Predecessor results for the period from January 1, 2015 through January 22, 2015 with the Successor results for the period from January 23, 2015 through December 31, 2015, in order to present results for the year ended December 31, 2015.

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The following table represents selected items in our consolidated statements of operations for the six months ended June 30, 2016 and 2015, and for the years ended December 31, 2015 and 2014, respectively:

				Combined			Combined
				Successor &			Successor &
	Successor			Predecessor			Predecessor			Predecessor
	For the Six Months Ended						For the Year Ended
	June 30,						December 31,
	2016			2015			2015			2014
Revenues:
Restaurant sales, net of discounts	$	875,566		$	480,196		$	1,032,558		$	754,957
Franchise royalty revenue		610,761			673,161			1,159,420			1,214,023
Franchise fees		24,000			144,062			299,000			505,992
Other revenues		407,213			206,324			633,845			505,905
Total Revenues		1,917,540			1,503,743			3,124,823			2,980,877
Operating Costs and Expenses:
Food and beverage costs		284,922			147,601			333,968			250,442
Depreciation and amortization		84,618			54,571			120,635			52,326
Compensation expense		1,223,780			622,346			1,571,094			769,964
General and administrative expenses		1,398,486			785,132			2,002,421			1,780,233
Total Operating Costs and Expenses		2,991,806			1,609,650			4,028,118			2,852,965
(Loss) Income from Operations		(1,074,266	)		(105,907	)		(903,295	)		127,912
Other (Expense) Income:
Other income (expense)		315			(365	)		(45	)		7,922
Interest (expense) income, net		(66,035	)		589			944			(2,927	)
Total Other (Expense) Income		(65,720	)		224			899			4,995
Net (Loss) Income Before Income Tax		(1,139,986	)		(105,683	)		(902,396	)		132,907
Income tax provision		(63,641	)		(54,991	)		(119,245	)		-
Net (Loss) Income		(1,203,627	)		(160,674	)		(1,021,641	)		132,907
Net loss attributable to the non-controlling interests		(302,702	)		(11,132	)		(226,718	)		-
Net (Loss) Income Attributable to Controlling Interest	$	(900,925	)	$	(149,542	)	$	(794,923	)	$	132,907

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Six Months Ended June 30, 2016 (Successor) Compared with Six Months Ended June 30, 2015 (Combined Successor and Predecessor)

Revenues

We generated restaurant sales, net of discounts of $875,566 for the six months ended June 30, 2016 as compared to $480,196 for the six months ended June 30, 2015, representing an increase of $395,370, or 82%, resulting primarily from the increase in retail store revenues due to the addition of three Company-owned restaurants during the first half of 2016.

Franchise royalty revenue decreased from $673,161 for the six months ended June 30, 2015 to $610,761 for the six months ended June 30, 2016, representing a decrease of $62,400, or 9%, which is primarily the result of a decrease in the number of franchisee stores to forty-three compared to forty-eight in the prior period. Similarly, franchise fees decreased from $144,062 to $24,000 for the six months ended June 30, 2016, a decrease of $120,062, or 83%, primarily due to fewer franchises sold during the six months ended June 30, 2016 compared to the prior period.

Other revenues increased from $206,324 for the six months ended June 30, 2015 to $407,213 for the six months ended June 30, 2016, representing an increase of $200,889, or 97%. Other revenues included rebates received from certain food and beverage vendors of $172,005 and $206,324 during the six months ended June 30, 2016 and 2015, respectively, as well as revenues of $235,208 during the six months ended June 30, 2016 from sales of POS systems, cash registers, camera systems and technology services through our subsidiary, CTI. The decrease in rebate revenues of $34,319, or 17%, resulted primarily from a decrease in purchases by franchisees as compared to the prior period. The increase in revenues from technology sales and services during the six months ended June 30, 2016 was primarily the result of our acquisition of the 70% ownership of CTI on August 1, 2015.

Operating Costs and Expenses

Operating costs and expenses consist of food and beverage costs, depreciation and amortization expenses, compensation expense and general and administrative expenses.

Food and beverage costs increased by $137,321, or 93%, from $147,601 for the six months ended June 30, 2015 to $284,922 for the six months ended June 30, 2016. The increase was primarily related to the increase in restaurant sales resulting from the addition of three additional Company-owned restaurants during the first half of 2016.

Depreciation and amortization expense increased by $30,047, or 55%, from $54,571 for the six months ended June 30, 2015 to $84,618 for the six months ended June 30, 2016. The increase was primarily attributable to the purchase of fixed assets in connection with the opening of three new Company-owned restaurants during the six months ended June 30, 2016.

Compensation expense increased by $601,434, or 97%, from $622,346 for the six months ended June 30, 2015 to $1,223,780 for the six months ended June 30, 2016. The increase was primarily attributable to the increase in head count at the corporate level, as well as increased compensation expense resulting from the acquisition of CTI during the third quarter of 2015 and the addition of three additional Company-owned restaurants during the six months ended June 30, 2016.

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General and administrative expenses increased by $613,354, or 78%, from $785,132 for the six months ended June 30, 2015 to $1,398,486 for the six months ended June 30, 2016. The increase was primarily due to approximately (i) $284,000 of costs related to new company-owned restaurants, (ii) $103,000 of expenses incurred through our subsidiary, CTI, acquired on August 1, 2015, (iii) a $101,000 increase in legal and professional fees, (ii) $82,000 of costs related to travel, meetings and conferences, (iv) $58,000 of costs related to marketing and promotion and (v) $35,000 of rent and equipment expenses related to opening our corporate office in Houston, Texas. These increases were partially offset by an approximate $55,000 decrease in franchise promotion expenses as we began to shift our focus away from franchising and towards expanding our business through Company-owned stores.

Loss from Operations

Our loss from operations for the six months ended June 30, 2016, increased by $968,359, or 914%, to $1,074,266 for the six months ended June 30, 2016 as compared to $105,907 for the six months ended June 30, 2015, primarily due to increased operating costs and expenses, partially offset by an increase in revenues.

Other (Expense) Income

Other expense increased by $65,944 from other income of $224 for the six months ended June 30, 2015 to other expense of $65,720 for the six months ended June 30, 2016. The increase was primarily attributable to amortization of debt discount of approximately $67,000 in connection with the convertible note payable to a related party, partially offset by an increase in interest income.

Net Loss

Our net loss for the six months ended June 30, 2016 increased by $1,042,953, or 649%, to $1,203,627 as compared to $160,674 for the six months ended June 30, 2015, resulting primarily from an increase in operating expenses and an increase in income tax provision of $8,650, or 16%, to $63,641 for the six months ended June 30, 2016 as compared to $54,991 for the six months ended June 30, 2015, partially offset by an increase in revenues during the six months ended June 30, 2016. Our net loss attributable to the controlling interest was $900,925 and $149,542 for the six months ended June 30, 2016 and 2015, respectively.

Year Ended December 31, 2015 (Successor and Predecessor) Compared with Year Ended December 31, 2014 (Predecessor)

Revenues

We generated restaurant sales, net of discounts of $1,032,558 for the year ended December 31, 2015 as compared to $754,957 for the year ended December 31, 2014, representing an increase of $277,601, or 37%, which resulted primarily from the opening of a new Company-owned restaurant in Springfield, NJ (the “Springfield” restaurant) in May 2015.

Franchise royalty revenue decreased from $1,214,023 to $1,159,420, or 4%, during the year ended December 31, 2015, which is primarily a result of having fewer franchise locations in operation during 2015 as compared to 2014.

Franchise fees decreased from $505,992 during the year ended December 31, 2014 to $299,000 during the year ended December 31, 2015, a decrease of $206,992, or 41%. The decrease was primarily due to fewer franchises sold during the period.

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Other revenues increased from $505,905 for the year ended December 31, 2014 to $633,845 for the year ended December 31, 2015, an increase of $127,940, or 25%. Other revenues include rebates received from certain vendors of $405,697 and $505,905 during the years ended December 31, 2015 and 2014, respectively, as well as revenues of $228,148 during the year ended December 31, 2015 from sales of POS systems, cash registers, camera systems and technology services through our subsidiary, CTI. The decrease in rebate revenues of $100,208, or 20%, during the period resulted primarily from (i) an approximately $46,000 decrease in rebates related to the licensing of POS systems from an outside vendor, since POS systems were provided by CTI during the second half of 2015, and (ii) approximately a $54,000 decrease related to one-time rebates received during the year ended December 31, 2014. Revenues from technology sales and services are the result of our acquisition of 70% ownership of CTI on August 1, 2015.

Operating Costs and Expenses

Food and beverage costs increased by $83,526, or 33%, from $250,442 to $333,968 for the years ended December 31, 2014 and 2015, respectively, as a result of the increase in restaurant sales as described above.

Depreciation and amortization expense increased by $68,309, or 131%, from $52,326 to $120,635 for the years ended December 31, 2014 and 2015, respectively. The increase was primarily related to the amortization of the intangible associated with franchise agreements resulting from the acquisition of Muscle Maker Brands as well as the purchase of additional equipment for the Springfield restaurant which opened in May 2015.

Compensation expense increased by $801,130, or 104%, from $769,964 for the year ended December 31, 2014 to $1,571,094 for the year ended December 31, 2015. The increase was primarily attributable to headcount increases at the corporate level as well as compensation expense at the Springfield restaurant and at CTI.

General and administrative expenses increased by $222,188, or 12%, from $1,780,233 for the year ended December 31, 2014 to $2,002,421 for the year ended December 31, 2015. The increase in general and administrative expenses was primarily attributable to approximately $192,000 of 2015 CTI expenses and approximately $88,000 of 2015 expenses incurred at the Springfield restaurant, as well as an increase in corporate expenses, including (i) $196,000 related to meetings and travel, (ii) $150,000 related to marketing and promotion, (iii) $50,000 related to bad debt expense for the write-off of certain franchisee loans, (iv) $28,000 related to opening of our corporate office in Houston, Texas, as well as (v) other increases in office expenses, utilities and rent, totaling approximately $35,000, partially offset by a decrease in legal and professional fees of approximately $200,000 and a decrease in guaranteed payments to certain members of MMF of approximately $327,000.

(Loss) Income from Operations

Our loss from operations for the year ended December 31, 2015 was $903,295 as compared to income from operations of $127,912 for the year ended December 31, 2014. The increase was primarily attributable to increased operating costs and expenses, partially offset by an increase in revenues, as described above.

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Other Income (Expense)

Other income decreased by $4,096, or 82%, from $4,995 for the year ended December 31, 2014 to $899 for the year ended December 31, 2015.

Net (Loss) Income

Our net loss for the year ended December 31, 2015 was $1,021,641 as compared to net income of $132,907 for the year ended December 31, 2014, resulting from an increase in operating expenses and an increase in the income tax provision of $119,245 (there was no tax provision or benefit during 2014, since MMF was treated as a partnership for income tax purposes and therefore MMF’s earnings and losses were included in the income tax returns of its members.), partially offset by an increase in revenues. Net loss attributable to the controlling interest was $794,923 and $132,907 for the years ended December 31, 2015 and 2014, respectively. There was no non-controlling interest during the year ended December 31, 2014.

Liquidity and Capital Resources

Liquidity

We measure our liquidity in a number of ways, including the following:

	Successor						Predecessor
	June 30, 2016			December 31, 2015			December 31, 2014
Cash	$	648,671		$	409,563		$	40,319
Working Capital Deficiency	$	(355,734	)	$	(61,507	)	$	(910,941	)

The convertible note payable to American Restaurant Holdings with a face value of $1,082,620 that is a non-current liability on our balance sheet as of June 30, 2016 was converted into equity on March 14, 2017. Subsequent to June 30, 2016, American Restaurant Holdings advanced $2,345,791 of additional funds to Muscle Maker that were exchanged for convertible notes payable and eventually were converted into equity on March 14, 2017.

We expect cash flows to improve as we continue to open additional stores and our brand continues to gain recognition.

Availability of Additional Funds

Based upon our working capital deficiency and accumulated deficit of $355,734 and $1,632,982, respectively, as of June 30, 2016, plus our use of $395,100 of cash in operating activities during the six months ended June 30, 2016, we require additional equity and/or debt financing to continue our operations. These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this filing.

During the Successor period, our operations have primarily been funded through proceeds from American Restaurant Holdings in exchange for equity and debt. In fact, subsequent to June 30, 2016, we received an aggregate of $2,345,791 associated with the issuances of convertible promissory notes and warrants to our Parent. These notes were eventually converted into common stock. Although we believe that we have access to capital resources, there are no commitments in place for new financing as of the filing date of this Offering Circular and there can be no assurance that we will be able to obtain funds on commercially acceptable terms, if at all. We expect to have ongoing needs for working capital in order to (a) fund operations; plus (b) expand operations by opening additional corporate-owned restaurants. To that end, we may be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital. If we are unsuccessful, we may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund its liabilities, or (d) seek protection from creditors.

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Our consolidated financial statements included elsewhere in this Offering Circular have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate our continuation as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Sources and Uses of Cash for the Six Months Ended June 30, 2016 (Successor) and June 30, 2015 (Combined Successor and Predecessor)

For the six months ended June 30, 2016 and 2015, we used cash of $395,100 and $83,675 respectively, in operations. Our cash use for the six months ended June 30, 2016 was primarily attributable to our net loss of $1,203,627, adjusted for net non-cash income in the aggregate amount of $218,204, partially offset by $590,323 of net cash provided by changes in the levels of operating assets and liabilities. Our cash use for the six months June 30, 2015 was primarily attributable to our net loss of $160,674, adjusted for net non-cash expenses in the aggregate amount of $166,138, plus $89,139 of net cash used in changes in the levels of operating assets and liabilities.

During the six months ended June 30, 2016, cash used in investing activities was $614,692, which was used to purchase property and equipment of $552,267 and to issue loans to franchisees and a related party in the net amount of $62,425. Net cash used in investing activities was $3,604,726 during the six months ended June 30, 2015, of which, $48,402 was used to purchase property and equipment, $3,555,592 was paid in connection with the acquisition of Muscle Maker Brands, $12,000 was paid in connection with the acquisition of Springfield, partially offset by net collections of $11,088 associated with franchisee loan activities.

Net cash provided by financing activities for the six months ended June 30, 2016 was $1,248,900, of which, $1,257,000 was advances from Parent, partially offset by $8,100 of repayments of notes payable. Cash provided by financing activities for the six months ended June 30, 2015 was $3,811,437, of which, $3,645,000 was provided in connection with proceeds from the issuance of common stock to our Parent, $60,000 was provided in connection with issuance of common stock for cash, $112,437 was advances from our Parent, partially offset by the repayment of notes payable of $6,000.

Sources and Uses of Cash for the Year Ended December 31, 2015 (Combined Successor and Predecessor) and December 31, 2014 (Predecessor)

For the year ended December 31, 2015 and 2014, we used cash of $885,972 and $6,999, respectively, in operations. Our cash used for the year ended December 31, 2015 was primarily attributable to our net loss of $1,021,641, adjusted for net non-cash income in the aggregate amount of $300,956, plus $165,287 of net cash used to fund changes in the levels of operating assets and liabilities. Our cash used in operations for the year December 31, 2014 was primarily attributable to our net income of $132,907, adjusted for net non-cash expenses in the aggregate amount of $60,506, partially offset by $200,412 of net cash used to fund changes in the levels of operating assets and liabilities.

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During the year ended December 31, 2015, net cash used in investing activities was $3,829,655, of which, $61,520 was used to purchase property and equipment, $12,000 was paid in connection with the acquisition of Springfield, $70,000 was paid in connection with the acquisition of CTI, and $3,555,592 was paid in connection with the acquisition of Muscle Maker Brands, and $130,723 was used to fund net issuances of loans receivables. Net cash provided by investing activities was $33,054 during the year ended December 31, 2014, of which, $10,270 was used to purchase property and equipment and $38,309 was used in franchisee loan activities.

Net cash provided by financing activities for the year ended December 31, 2015 was $5,051,720, of which, $665,620 was provided by proceeds from the issuance of a convertible note payable to Parent, $3,645,000 of proceeds from the issuance of common stock to Parent, $810,000 of proceeds from the issuance of common stock and warrants for cash, partially offset by $68,900 of repayments of notes payable. Cash used in financing activities for the year ended December 31, 2014 was $163,812, which was related to the repayment of notes payable.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

We base our estimates on historical experience and on various assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Significant estimates include:

● the fair value of assets acquired and liabilities assumed in a business combination;

● the assessment of recoverability of long lived assets, including property and equipment, goodwill and intangible assets, income taxes and reserves;

● the estimated useful lives of intangible and depreciable assets;

● the recognition of revenue; and

● the recognition, measurement and valuation of current and deferred income taxes.

Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

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Intangible Assets

We account for recorded intangible assets in accordance with SFAS No. 142, ’‘Goodwill and Other Intangible Assets’’ (’’SFAS 142’’). In accordance with SFAS 142, the Company does not amortize intangible assets having indefinite useful lives. Our goodwill and trademarks are deemed to have indefinite lives, and accordingly are not amortized, but are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable.

Other intangible assets include franchise agreements and a non-compete agreement which are amortized on a straight-line basis over their estimated useful lives of 13 years and 5 years, respectively.

Impairment of Long Lived Assets

When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, we perform an analysis to review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses, which reduce net income.

Deferred Revenue

Deferred revenue consists of initial franchise fees received by us, for which the restaurant has not yet opened. We collect initial franchise fees when franchise agreements are signed and recognizes the initial franchise fees as revenue when the store is opened, which is when we have performed substantially all initial services required by the franchise agreement.

Revenue Recognition

In accordance with the Accounting Standard Codification Topic 605 “Revenue Recognition” (“ASC 605”), We recognizes revenue when the following four criteria are met: (1) delivery has occurred or services rendered; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.

Restaurant Sales

Retail store revenue at our operated restaurants are recognized when payment is tendered at the point of sale, net of sales tax and other sales related taxes.

Royalties and Franchise Fees

Revenue principally consists of royalties and franchise fees. Royalties are based on a percentage of franchisee revenue. Initial franchise fees are recognized upon opening of a restaurant or granting of a new franchise term, which is when we performed substantially all material obligations and initial services required by the franchise agreement. We recognize renewal fees in income when a renewal agreement becomes effective.

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Other Revenues

We have supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to us based upon the dollar volume of purchases for all our owned and franchised restaurants from these vendors. Rebates are recorded as revenue during the period in which the related food and beverage purchases are made.

Through our subsidiary, CTI, we derive revenue from the sale of POS computer systems, cash registers and camera systems, and from the provision of related consulting and support services, which generally include implementation, installation and training services. We recognize revenue when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the fee is fixed or determinable and collectability is reasonably assured.

Income Taxes

We account for income taxes under Accounting Standards Codification (“ASC”) 740 Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Tax benefits claimed or expected to be claimed on a tax return are recorded in our financial statements. A tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.

Our policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of operations.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 - Revenue Recognition and most industry-specific guidance throughout the ASC. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. To allow entities additional time to implement systems, gather data and resolve implementation questions, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, in August 2015, to defer the effective date of ASU No. 2014-09 for one year, which is fiscal years beginning after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2014-09 on our financial statements or disclosures. In addition, the FASB issued ASU 2016-08 in March 2016, to help provide interpretive clarifications on the new guidance in ASC Topic 606. We are currently evaluating the accounting, transition, and disclosure requirements of the standard to determine the impact, if any, on our consolidated financial statements.

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In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 explicitly requires us to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist which raise substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter, with early adoption permitted. The adoption of this standard did not have a material impact on our consolidated financial statement disclosures.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” (“ASU 2015-11”). ASU 2015-11 amends the existing guidance to require that inventory should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out or the retail inventory method. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We are currently evaluating the effects of ASU 2015–11 on our financial statements.

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The FASB issued ASU 2015-17 as part of its ongoing Simplification Initiative, with the objective of reducing complexity in accounting standards. The amendments in ASU 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in ASU 2015-17 align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1, Presentation of Financial Statements. The amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We early adopted ASU 2015-17 and the adoption of ASU 2015-17 did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. ASU 2016-02 will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating ASU 2016-02 and its impact on our consolidated financial statements.

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In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations.” This update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The amendments in the Update clarify the implementation guidance on principal versus agent considerations. The update is effective, along with ASU 2014-09, for annual and interim periods beginning after December 15, 2017. The adoption of ASU 2016-08 is not expected to have a material impact on our consolidated financial statement or disclosures.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718)” (“ASU 2016-09”). ASU 2016-09 requires an entity to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. We are currently evaluating ASU 2016-09 and its impact on our consolidated financial statements or disclosures.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing.” ASU No. 2016-10 maintains the core principles of Topic 606 on revenue recognition, but clarifies identification of performance obligations and licensing implementation guidance. The amendments in ASU 2016-10 affect the guidance of ASU 2014-09 which is not yet effective. We are currently evaluating the effects, if any, that adoption of this guidance will have on our consolidated financial statements.

On May 9, 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2016-12”). ASU 2016-12 provides clarifying guidance in a few narrow areas and adds some practical expedients to the guidance. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements for ASU 2014-09. We are evaluating the effect of ASU 2014-09, if any, on our financial statements.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (230) – Restricted Cash.” ASU No. 2016-18 requires an entity to include amounts described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2018. The adoption of this standard is not expected to have a material impact on our financial position and results of operations.

In December 2016, the FASB issued ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” ASU No. 2016-20 amends certain aspects of ASU No. 2014-09 and clarifies, rather than changes, the core revenue recognition principles in ASU No. 2014-09. It is effective for annual reporting periods beginning after December 15, 2018. The adoption of this standard is not expected to have a material impact on our financial position and results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

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Quantitative and Qualitative Disclosure about Market Risk

Inflation Risk

The primary inflationary factors affecting our operations are food and supplies, labor costs, energy costs and materials used in the construction of new company-operated restaurants. Increases in the minimum wage directly affect our labor costs and the PPACA will increase our health insurance costs beginning in fiscal 2015. Our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Finally, the cost of constructing our restaurants is subject to inflationary increase in the costs of labor and material which results in higher rent expense on new restaurants.

Commodity Market Risk

We purchase certain products that are affected by commodity prices and are, therefore, subject to price volatility caused by weather, market conditions and other factors which are not considered predictable or within our control. Although these products are subject to changes in commodity prices, certain purchasing contracts or pricing arrangements contain risk management techniques designed to minimize price volatility. The purchasing contracts and pricing arrangements we use may result in unconditional purchase obligations, which are not reflected in our consolidated balance sheets. Typically, we use these types of purchasing techniques to control costs as an alternative to directly managing financial instruments to hedge commodity prices. In many cases, we believe we will be able to address material commodity cost increases by adjusting our menu pricing, promotional mix, or changing our product delivery strategy. However, increases in commodity prices, without adjustments to our menu prices, could increase food and supplies costs as a percentage of company restaurant revenues and customers may react negatively to increases in our menu prices which could adversely impact customer traffic and revenues.

Credit Risk

Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows.

Certain financial instruments potentially subject the company to a concentration of credit risk. These financial instruments consist primarily of cash and cash equivalents and accounts and vendor receivables. We place our cash and cash equivalents with high-credit, quality financial institutions. The balances in these accounts exceed the amounts insured by the Federal Deposit Insurance Corporation.

Concentration of credit risk with respect to receivables is primarily limited to franchisees, which are primarily located in the Northeastern United States. We continually evaluate and monitor the credit history of our franchisees and believe we have an adequate allowance for bad debts.

MANAGEMENT

Board of Directors and Executive Officers

Our directors hold office until their successors are elected and qualified, or until their deaths, resignations or removals. Our executive officers hold office at the pleasure of our board of directors, or until their deaths, resignations or removals.

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Our directors, executive officers and significant employees, their ages, positions held, and durations of such are as follows:

Name	Age	Positions Held	Entity	Initial Term of Office
Tim M. Betts	47	Chairman of the Board and Director	Muscle Maker, Inc	December 2014
		Chairman of the Board, Secretary and Manager	Muscle Maker Brands, LLC	December 2014
Robert E. Morgan	64	CEO, President, and Director	Muscle Maker, Inc.	October 2015
		CEO and President	Muscle Maker Brands, LLC	October 2015
Grady Metoyer	51	Chief Financial Officer	Muscle Maker, Inc.	March 2017
		Chief Financial Officer and Manager	Muscle Maker Brands, LLC	March 2017
Rodney C. Silva	44	Chief Culture Officer	Muscle Maker Brands, LLC	January 2015
Benjamin Ross	26	Vice President	Muscle Maker Brands, LLC	October 2015
Derek Bogner	36	Vice President of Franchise Operations	Muscle Maker Brands, LLC	January 2015
Aimee Infante	30	Vice President of Marketing	Muscle Maker Brands, LLC	February 2016
Mark Farmer	48	Vice President of Corporate Operations	Muscle Maker Brands, LLC	November 2016
Patrick J. Chiacchia	64	Director Non-Traditional Real Estate	Muscle Maker Brands, LLC	June 2015
Eric Goldberg	29	Manager of Franchise Development	Muscle Maker Brands, LLC	July 2015
Noel DeWinter	77	Director	Muscle Maker, Inc	February 2017
Merlin C. Spencer	79	Director	Muscle Maker, Inc	February 2017
A.B. Southall III	55	Director	Muscle Maker, Inc	February 2017
Paul L. Menchik	69	Director	Muscle Maker, Inc	February 2017

Executive Officers

Tim M. Betts. Mr. Betts has served as Chairman of the Board and a director of Muscle Maker, Inc since December 2014. From December 2014 through October 2015, he also served as the Chief Executive Officer, President, Chief Financial Officer and Secretary of Muscle Maker, Inc. Mr. Betts has also served as the Chairman of the Board and Secretary and the Manager of Muscle Maker Brands, LLC since December 2014. From December 2014 to October 2015, he was the President and Chief Executive Officer of Muscle Maker Brands, LLC. Since June 2012, Mr. Betts has served as the Chief Executive Officer and the President of and is the co-founder of American Restaurants Holdings, Inc. (“American Restaurant Holdings”), the direct parent company of American Restaurants, LLC, which formerly owned more than a 90% equity interest in Muscle Maker prior to the Spin-Off of Muscle Maker in March 2017. Mr. Betts has been instrumental in the acquisition of the current three brand portfolio of American Restaurant Holdings (including Fresca’s Mexican Grill, Canyon Fireside Grille, and Jojo’s Pizza Kitchen) and oversees the daily operations of American Restaurant Holdings.  With over 20 years of business/financial experience, he served as the Managing Director of Nobis Capital Advisors, Inc., a business advisory firm, from December 2008 to May 2012. From 2004 to 2008, Mr. Betts was the Director of Investment Banking for Westcap Securities, Inc., a licensed broker/dealer.  Prior to joining Westcap Securities, Mr. Betts was a Managing Director of CK Cooper and Company, a broker/dealer engaged in the oil and gas and technology markets.  Mr. Betts received his Masters in Business Administration from the University of LaVerne.

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Robert E. Morgan. Mr. Morgan has served as a director of Muscle Maker, Inc since October 2015. He has also served as the Chief Executive Officer and President of Muscle Maker Brands, LLC since October 2015. From December 2014 to October 2015, Mr. Morgan was Chief Operating Officer of Muscle Maker Brands, LLC. From November 2007 (the inception of Muscle Maker Grill as a franchised brand) to January 2015, he was the Chief Operating Officer of Muscle Maker Franchising, LLC. A 40-year veteran of the restaurant industry, he previously held positions at Pizza Hut/PepsiCo Corporation, was owner of Pizza Huts of Southwest Louisiana, Papa John’s Pizza locations in New England and Golden Corral franchises in Texas, Oklahoma and Kansas. His career achievements include supervising the site selections and construction of more than 250 new restaurants and 500 remodels, the creation and testing of new products and nationwide marketing campaigns, management of full-service and fast food operations, set numerous national sales and profit records, supervising and developing training for staff of 13,000 employees and being named the youngest vice president in Pizza Hut history. He also helped grow the Muscle Maker Grill brand from one to 50 locations - with others, including internationally, currently in development.

Grady Metoyer. Mr. Metoyer has served as the Chief Financial Officer of Muscle Maker, Inc. since March 2017. He has also served as Chief Financial Officer and Manager of Muscle Maker Brands, LLC since March 2017. From August 2015 to March 2017, M. Metoyer served as the CFO of Specialty Operations where he expanded his strategic advisory counseling role and further served as the Executive financial liaison to segment Presidents and the Sysco Executive team while maintaining financial oversight of seven separate Sysco owned subsidiaries. From August 2013 to August 2015, Mr. Metoyer served Vice President of Operations of Sysco’s Specialty operations. Reporting to the Senior Vice President, Mr. Metoyer served as a strategic consultant to the various business segments that made up over $10 billion in annual revenue. From March 2008 until August 2013, Mr. Metoyer served as Executive Vice President and Chief Financial Officer of Sysco’s wholly owned subsidiary The SYGMA Network, Inc. His primary responsibilities included but were not limited to operations, administrative and financial oversight of over $6 billion in annual revenue. From March 1999 through August 2007, Mr. Metoyer served as Vice President of finance and administration of FoodBrand LLC, a privately held food retailer specializing in multiple franchised concepts prior to joining Sysco. Mr. Metoyer brings a wealth of experience and knowledge in food and beverage retail and distribution sector. He is a skilled and qualified professional with a background in diverse aspects of financial stewardship, financial management, accounting, executive leadership, and operations management. His experience and knowledge to collaboratively develop, challenge, and motivate the Muscle Maker leadership team through complex issues while bringing the simplicity of utilizing holistic business lens to aid in the company’s strategic decision process. His educational background is based in finance and accounting. He graduated from Louisiana State University with a B.S. in Business Administration (accounting / finance focus) in August of 1988.

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Significant Employees

Rodney C. Silva. Mr. Silva has served as the Chief Culture Officer of Muscle Maker Brands, LLC since October 2015. From January 2015 to October 2015, he served as Director of Brand Development of Muscle Maker Brands, LLC. Mr. Silva is the Founder of the system of Muscle Maker Grill restaurants and owned and operated the original Muscle Maker Grill restaurant. He was the Chairman and the Managing Member of Muscle Maker Franchising, LLC (“Muscle Maker Franchising”) from Muscle Maker Franchsing’s formation in November 2007 to January 2015 when we became the franchisor of Muscle Maker Grill restaurants. From December 1995 through September 2010, Mr. Silva was President of Muscle Maker Nutrition Center, Inc., located in Colonia, New Jersey.

Benjamin Ross. Mr. Ross has served as the Vice President of Muscle Maker Brands, LLC since October 2015. From January 2015 through September 2015, Mr. Ross was the Director of Franchise Development of Muscle Maker Brands. From December 2013 to January 2015, Mr. Ross was Director of Franchise Development of Muscle Maker Franchising. From September 2012 to November 2013, he was Manager of Franchise Development of Muscle Maker Franchising. From May 2011 to September 2012, Mr. Ross was the Business Development Manager of Muscle Maker Franchising. Since October 2010, Mr. Ross has also been a realtor with Keller Williams Real Estate, Cherry Hill, New Jersey.

Derek Bogner. Mr. Bogner has served as the Director of Operations Franchise of Muscle Maker Brands, LLC since January 2015. From May 2013 to January 2015, Mr. Bogner was a District Manager of Muscle Maker Franchising. From April 2011 to May 2013 he was Assistant General Manager of Fox & Hound Restaurant Group in Edison, New Jersey. From January 2009 to April 2011 he worked in Business Development for Marsh & McLennan Companies, Inc. in Somerset, New Jersey.

Aimee Infante. Ms. Infante has been the Vice President of Marketing of Muscle Maker Brands since February 2016. From January 2015 through January, 2016, Ms. Infante served as our Director of Marketing of Muscle Maker Brands. Ms. Infante was Director of Marketing of Muscle Maker Franchising from October 2014 to January 2015. Ms. Infante was employed by Qdoba Mexican Grill in Denver, Colorado from November 2010 to April 2014, serving as Regional Marketing Specialist from November 2010 to October 2012 and Marketing Manager from October 2012 to April 2014.

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Mark Farmer. Mr. Farmer has served as Vice President of Corporation Operations of Muscle Maker Brands since October 2016. From October 2009 to August 2016, Mr. Farmer worked at LLIC (DBA Dairy Queen) where he served as Director of Operations. From October 2007 to October 2009, he owned Initium LLC (DBA Taco Factory) where he served as President and owner. From July 2007 to September 2007, Mr. Farmer worked at Steak N Shake where he served as Director of Operations. From July 1996 to July 2006, he worked at Sonic Restaurants Inc. (Sonic Corp) where he served as Senior Director of Operations. Mr. Farmer brings knowledge and experience in the restaurant industry, primarily QSR and fast casuals segments. Mr. Farmer has 20 plus years of experience in this industry working in multiple disciplines including Operations, Franchise Sales, Human Resources and Marketing. Mr. Farmer will bring knowledge and practical experience on establishing sustainable systems and routines that will allow the company to scale effectively and profitably. Additionally, his financial and operational experience will help to improve reporting, accountability and cost controls. His background in marketing and franchise sales can serve to provide support and advisement to those departments. Mr. Farmer is a graduate of the University of Oklahoma with a Bachelor of Arts in Psychology. May of 1993. Mr. Farmer is a graduate of Oklahoma City University with an M.B.A. in Finance in May of 2000.

Patrick J. Chiacchia. Mr. Chiacchia has been the Director Non-Traditional Real Estate of Muscle Maker Brands since June 2015. He was Senior Broker National Accounts for Corbett Restaurant Group in Boston, Massachusetts from May 2013 to May 2015. From May 2007 to October 2012, Mr. Chiacchia was Senior Vice President of Development of UFood Restaurant Group, Inc. in Newton, Massachusetts.

Eric Goldberg. Mr. Golderg has been the Manager of Franchise Development of Muscle Maker Brands since July 2015. From June 2014, through July 2015, Mr. Goldberg was the General Manager for the Trinity Hospitality Group in New Jersey. From February 2014 through June 2014, he was Assistant Maitre d and Banquet Manger for Landmark Hospitality in Warren, New Jersey. Prior to that, he served in the front of the house for Prigmore Corporation in New Brunswick, New Jersey.

Directors

Noel DeWinter. Mr. DeWinter has served as director of Muscle Maker, Inc since February 2017. Mr. DeWinter has over 40 years of both private and public accounting and finance experience within a number of different industries. Since January 2011, he has served as Chief Financial Officer of FileLife, a private developer of file protection and control system products. He was also the Chief Financial Officer of Apollo Medical Holdings from 2008 until 2010. Apollo Medical (AMEH) is a public healthcare company providing inpatient hospitalist services to various Southern California hospitals. Additional experience includes the Chief Financial Officer of Capital Pacific Homes and the same position at Wahlco Environmental Systems. Wahlco was an NYSE-listed public company during his tenure as Chief Financial Officer. Mr. DeWinter received his MBA from the University of Pennsylvania.

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Merlin C. Spencer. Mr. Spencer has served as director of Muscle Maker, Inc since February 2017. From 2012 to 2017, Mr. Spencer served as a consultant to staff at Waddell & Reed, an institutional investment firm. From 2000 to 2010, he advised the Sr. V.P. General Counsel of Great Plains Energy on merging legal departments with an acquisition, assisted CEO’s at electronic firms DCI and Elecsys plus served as “stand in CEO” at Pivot International and One Source Group to cut costs and increase profits. He served as Professor of Marketing and Strategy at 3 Universities, Chairman of the Board of 3 companies, Chairman of the Missouri Environmental Improvement Authority, and consultant to GE, GM, AT&T Long Lines and 5 Regional Bell Companies, Sprint, Mercedes Benz, Hitachi, two Generals in the US Army, Brookdale Senior Living, HCA, Weitz Construction, and as advisor to multiple other companies during his career. He signed over 900 million dollars of bonds and debt instruments while serving as Chairman of the Board and assisted in selling over 900 million dollars of retirement home developments while serving as director of marketing and strategy. His professional focus on management developed a 12-step process for accessing and improving performance in teams and organizations. The first application at Sprint produced a $15 million savings in 45 days and cumulative savings of over $118 million during an 18-month application. Mr. Spencer served as advisor to Bond Holders’ new owners, then was installed as Chairman of the Board during negotiations on exist plans, financing and property management issued with the 34 retirement homes opened and operated by the Forum Group, Inc., a public company. He holds a BS from Iowa State University in 1960, MBA in 1961 and DBA in 1965 from Indiana University.

A.B. Southall III. Mr. Southall has served as director of Muscle Maker, Inc since February 2017. He has over 35 years of experience managing construction and land developing businesses. Since 1997 he has been the President of a Custom Home Building Company, in addition to 20 years as President of a 189 boat slip marina complex. His involvement in the marina business led him to co-founding a local Waterway Association, where he has been on the board since it’s inception. He has diversely invested across multiple sectors including private placements, oil & gas, real estate, restaurant businesses and commodities. Mr. Southall is an advocate of a healthy approach to the food industry and the restaurant business.

Paul L. Menchik. Mr. Menchik has served as director of Muscle Maker, Inc since February 2017. Since 1986, Mr. Menchik has been Professor of Economics at Michigan State University where he has been Department chairperson and Director of Graduate Programs. He has served as Senior Economist for Economic Policy for the White House Office of Management and Budget (where among other matters he worked on Social Security solvency issues) and served as Visiting Scholar at the Tax Analysis Division of the Congressional Budget Office. Menchik has also been on the faculty of Rutgers University and the University of Wisconsin, and has served as visiting faculty at University of Pennsylvania, London School of Economics, University College London, and Victoria University in Wellington New Zealand. Over the years he has advised three state governments and five US government agencies. He holds a Ph.D. from the Wharton School of Finance and Commerce at the University of Pennsylvania. He has over 40 publications including a book on household and family economics, made over 85 paper presentations at other universities and conferences around the world and has refereed for over 20 academic journals and is currently a member of the editorial board for the Journal of Income Distribution. He is a member of Who’s Who in Economics and Who’s Who in America.

Corporate Governance

Director Qualifications

Tim M. Betts – Our board believes that Mr. Betts’s qualifications to serve on our board include his deep understanding of the restaurant/franchise industry as well as his vast experience in business and financial matters.

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Robert E. Morgan – Our board believes that Mr. Morgan’s qualifications to serve on our board include his extensive experience in the restaurant/franchise industry and related business and financial matters.

Noel DeWinter – Our board believes that Mr. DeWinter’s qualifications to serve on our board include extensive experience in financial and accounting matters.

Merlin C. Spencer – Our board believes that Mr. Spencer’s qualifications to serve on our board include extensive experience in management, marketing, and strategizing.

A.B. Southall III – Our board believes that Mr. Southall’s qualifications to serve on our board include vast business and financial experience with real estate and restaurants.

Paul L. Menchik – Our board believes that Mr. Menchik’s qualifications to serve on our board include extensive experience in economic and financial matters.

Board of Directors and Board Committees

Upon the registration of our common stock under the Exchange Act following the completion of this offering, we intend to apply to list our common stock on the NYSE MKT or the NASDAQ Capital Market (“NASDAQ”). In order to list our common stock on the NYSE MKT or the NASDAQ (each, an “Exchange”), we are required to comply with the NYSE MKT or the NASDAQ standards, whichever is applicable, relating to corporate governance, requiring, among other things, that:

●          A majority of our Board of Directors to consist of “independent directors” as defined by the applicable rules and regulations of the applicable Exchange. Our Board of Directors has affirmatively determined that Messrs. DeWinter, Spencer, Southall, and Menchik are independent directors and Messrs. Betts and Morgan are non-independent directors;

●          The compensation of our executive officers to be determined, or recommended to the Board of Directors for determination, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a Compensation Committee comprised solely of independent directors;

●          That director nominees to be selected, or recommended to the Board of Directors for selection, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a nomination committee comprised solely of independent directors; and

●          Establishment of an audit committee with at least three independent directors as well as composed entirely of independent directors. As a result, we must have at least one independent director on our audit committee at the time of listing on the Exchange, at least two independent directors within 90 days of listing on the Exchange and at least three independent directors within one year of listing on the Exchange, where at least one of the independent directors qualifies as an audit committee financial expert under SEC rules and as a financially sophisticated audit committee member under the applicable Exchange rules. The board has determined that Mr. DeWinter qualifies as an “audit committee financial expert,” as that term is defined in Item 407(d)(5) of Regulation S-K, as promulgated by the SEC.

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If we are not approved for listing on either Exchange, we intend to apply for quotation of our common stock on the OTCQX Marketplace of the OTC Markets by having a market maker file an application with FINRA for our common stock to be eligible for trading on the OTCQX Marketplace of the OTC Markets. We are not required to comply with the corporate governance rules of an Exchange, and instead may comply with less stringent corporate governance standards while listed on the OTCQX. The OTCQX does not require any of its members to establish any committees comprised of members of our board of directors, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function. Instead, the functions of those committees may be undertaken by the board of directors as a whole. Upon quotation of our common stock on the OTCQX, our securities would not be quoted on an exchange that has requirements that a majority of our board members be independent and we would not otherwise be subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we currently required to establish or maintain an Audit Committee or other committee of our board of directors. Although we may comply with less stringent corporate governance standards while listed on the OTCQX, we have elected to voluntarily comply with the corporate governance rules of the NASDAQ.

Board Leadership Structure and Board’s Role in Risk Oversight

Tim Betts is the Chairman of the Board. The Chairman has authority, among other things, to preside over Board meetings and set the agenda for Board meetings. Accordingly, the Chairman has substantial ability to shape the work of our Board. We currently believe that separation of the roles of Chairman (Tim Betts) and Chief Executive Officer (Robert Morgan) ensures appropriate oversight by the Board of our business and affairs. However, no single leadership model is right for all companies and at all times. The Board recognizes that depending on the circumstances, other leadership models, such as the appointment of a lead independent director, might be appropriate. Accordingly, the Board may periodically review its leadership structure. In addition, following the completion of the offering, the Board will hold executive sessions in which only independent directors are present.

Our Board is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities. Our principal source of risk falls into two categories, financial and product commercialization. The audit committee oversees management of financial risks; our Board regularly reviews information regarding our cash position, liquidity and operations, as well as the risks associated with each. The Board regularly reviews plans, results and potential risks related to our system-wide restaurant growth, brand awareness and menu offerings. Our Compensation Committee is expected to oversee risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on the Company.

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Committees of the Board of Directors

The Board of Directors has already established an audit committee (the “Audit Committee”), a Compensation Committee (the “Compensation Committee”) and a Nominating and Corporate Governance Committee (“Governance Committee”). The composition and function of each committee are described below.

Audit Committee

The Audit Committee has three members that are independent directors, including Messrs. DeWinter, Spencer and Menchik. Mr. DeWinter serves as the chairman of the Audit Committee and satisfies the definition of “audit committee financial expert”. Our Audit Committee has adopted a written charter, and upon the completion of this offering, a copy of this charter will be posted on the Corporate Governance section of our website, at www.musclemakergrill.com.

Our audit committee is authorized to:

● approve and retain the independent auditors to conduct the annual audit of our financial statements;

● review the proposed scope and results of the audit;

● review and pre-approve audit and non-audit fees and services;

● review accounting and financial controls with the independent auditors and our financial and accounting staff;

● review and approve transactions between us and our directors, officers and affiliates;

● recognize and prevent prohibited non-audit services; and

● establish procedures for complaints received by us regarding accounting matters; oversee internal audit functions, if any.

Compensation Committee

The Compensation Committee has three members that are independent directors, including Messrs. Spencer, DeWinter and Southall. Mr. Spencer serves as the chairman of the Compensation Committee. Our Compensation Committee has adopted a written charter, and upon the completion of this offering, a copy of this charter will be posted on the Corporate Governance section of our website, at www.musclemakergrill.com.

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Our Compensation Committee is authorized to:

● review and determine the compensation arrangements for management;

● establish and review general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals;

● administer our stock incentive and purchase plans;

● oversee the evaluation of the Board of Directors and management; and

● review the independence of any compensation advisers.

Nominating and Corporate Governance Committee

The Governance Committee has three members that are independent directors, including Messrs. Menchik, Spencer and DeWinter. Mr. Menchik serves as the chairman of the Governance Committee. Our Governance Committee has adopted a written charter, and upon the completion of this offering, a copy of this charter will be posted on the Corporate Governance section of our website, at www.musclemakergrill.com.

The functions of our Governance Committee, among other things, include:

● identifying individuals qualified to become board members and recommending director;

● nominees and board members for committee membership;

● developing and recommending to our board corporate governance guidelines;

● review and determine the compensation arrangements for directors; and

● overseeing the evaluation of our board of directors and its committees and management.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee, at any time, has been one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the Board of Directors or Compensation Committee of any entity that has one or more executive officers on our Board of Directors or Compensation Committee. For a description of transactions between us and members of our Compensation Committee and affiliates of such members, please see “Certain Relationships and Related Party Transactions”.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Prior to the completion of the offering, the code of business conduct and ethics will be available at our website at www.musclemakergrill.com. We expect that any amendments to the code, or any waivers of its requirement, will be disclosed on our website.

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EXECUTIVE COMPENSATION

The following table summarizes all compensation recorded by us in the past two fiscal years for each of our executive officers. For definitional purposes, these individuals are sometimes referred to as the “named executive officers”, or “NEOs”.

Summary Compensation Table

The following table provides information regarding the compensation paid during our fiscal years ended December 31, 2015 and December 31, 2014 to our chief executive officer (principal executive officer), our Chairman of the Board (former principal executive officer), our chief financial officer (principal financial officer), and Chief Cultural Officer. We refer to these individuals as our named executive officers.

Summary Compensation Table

Name and Principal Position	Year		Salary		Bonus		Stock Award(5)		Option Awards		Non-Equity Incentive Plan Compensation		Non-Qualified Deferred Compensation Earnings		All Other Compensation(6)		Total
Robert E. Morgan(1) Chief Executive Officer, President, and Director of Muscle Maker, Inc (principal executive officer of Muscle Maker, Inc)		2015	$	270,000	$	0	$	0	$	0	$	0	$	0	$	64,800	$	334,800
Chief Executive Officer and President of Muscle Maker Brands, LLC		2014	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Timothy M. Betts(2) Chairman of the Board and Director of Muscle Maker, Inc (former principal executive officer and principal financial officer of Muscle Maker, Inc)		2015	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Chairman of the Board of Muscle Maker Brands, LLC		2014	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Rodney C. Silva(3) Chief Culture Officer of Muscle Maker Brands, LLC		2015	$	150,000	$	0	$	28,000	$	0	$	0	$	0	$	28,800	$	206,800
		2014	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Grady Metoyer(4)
Chief Financial Officer of Muscle Maker, Inc (principal financial officer of Muscle Maker, Inc)		2015	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Chief Financial Officer and Manager of Muscle Maker Brands, LLC		2014	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

(1) Since October 2015, Mr. Morgan has served as (i) the Chief Executive Officer and President of Muscle Maker and (ii) the Chief Executive Officer and President of Muscle Maker Brands. From December 2014 to October 2015, Mr. Morgan served as the Chief Operating Officer of Muscle Maker Brands.

(2) Since December 2014, Mr. Betts has served as (i) the Chairman of the Board of Muscle Maker and (ii) the Chairman of the Board, Secretary and a Manager of Muscle Maker Brands. From December 2014 to October 2015, Mr. Betts served as (i) the Chief Executive Officer, President, Chief Financial Officer, and Secretary of Muscle Maker and (ii) Chief Executive Officer and President of Muscle Maker Brands.

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(3) Since January, 2015, Mr. Silva has served as the Chief Culture Officer of Muscle Maker Brands. From January 2015 to October, 2015, Mr. Silva served as the Director of Brand Development of Muscle Maker Brands.

(4) Since March 2017, Mr. Metoyer has served as the Chief Financial Officer of Muscle Maker and Muscle Maker Brands.

(5) On January 23, 2016, Muscle Maker issued 200,000 shares to Mr. Silva as consideration for Mr. Silva entering into a former employment agreement with its subsidiary, Muscle Maker Brands. The value of the shares issued were $0.14 per share (or $28,00 in the aggregate).

(6) For Messrs. Morgan and Silva includes the following perquisites and benefits:

● Housing Allowance: For 2015, $3,000 per month ($36,000 per year) for Mr. Morgan and $0 for Mr. Silva and for 2014, $0 for Mr. Morgan and $0 for Mr. Silva.

● Healthcare Allowance: For 2015, $2,000 per month ($24,000 per year) for Mr. Morgan and $2,000 ($24,000 per year) per month for Mr. Silva; and for 2014, $0 for Mr. Morgan and $0 for Mr. Silva.

● Auto Allowance: For 2015, $400 per month ($4,800 per year) for Mr. Morgan and $400 per month ($4,800 per year) for Mr. Silva; and for 2014, $0 for Mr. Morgan and $0 for Mr. Silva.

Employment Agreements

Neither Muscle Maker nor Muscle Maker Brands has entered into employment agreements with any of the named executive officers, except with Robert Morgan and Rod Silva. These employment agreements have expired on January 23, 2017.

On January 23, 2015, Muscle Maker Brands entered into an employment agreement (the “COO Agreement”) with Robert Morgan, its then Chief Operations Officer (the “COO”). The COO Agreement provided for a base salary of $22,500 per month and performance based bonuses, as well as standard employee insurance and other benefits as defined in the COO Agreement. The COO Agreement expired on January 23, 2017.

On January 23, 2015, Muscle Maker Brands entered into an employment agreement (the “DBD Agreement”) with Rod Silva, its then Director of Brand Development (the “DBD”). The DBD Agreement provided for a base salary of $12,500 per month and performance based bonuses, as well as standard employee insurance and other benefits as defined in the DBD Agreement. Upon the execution of the DBD Agreement, the DBD received 200,000 shares of immediately vested Company common stock valued at $0.14 per share or $28,000. The DBD Agreement expired on January 23, 2017.

Neither Muscle Maker nor Muscle Maker Brands has entered into a new employment agreement with either of them since the expiration of their respective employment agreements.

Elements of Compensation

None of our named executive officers, except for Messrs. Morgan and Silva, was compensated in 2015 or 2014 by us or Muscle Maker Brands. Messrs. Morgan and Silva were provided with the following primary elements of compensation in 2015 and 2014:

Base Salary

Messrs. Morgan and Silva received a fixed base salary in an amount determined in accordance with his then employment agreement with Muscle Maker Brands, and based on a number of factors, including:

● The nature, responsibilities and duties of the officer’s position;

● The officer’s expertise, demonstrated leadership ability and prior performance;

● The officer’s salary history and total compensation, including annual cash bonuses and long-term incentive compensation; and

● The competitiveness of the market for the officer’s services.

Messrs. Morgan’s and Silva’s base salary for 2015 and 2014 is listed in “—Summary Compensation Table.”

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Stock Award

In fiscal 2015, we issued 200,000 shares of our common stock to Rod Silva as consideration for Mr. Silva entering into his then employment agreement with our subsidiary, Muscle Maker Brands

Other Benefits

In 2015, Mr. Morgan, our President, and Mr. Silva, our Chief Cultural Officer, were provided with certain limited fringe benefits that we believe are commonly provided to similarly situated executives in the market in which we compete for talent and therefore are important to our ability to attract and retain top-level executive management. These benefits include (a) healthcare allowance and auto allowance for both Messrs. Morgan and Silva and (b) housing allowance for Mr. Morgan. The amounts paid to Messrs. Morgan and Silva in 2015 in respect of these benefits is reflected above in the “—Summary Compensation Table” section under the “All Other Compensation” heading.

Compensation Discussion and Analysis

Stock Option Grants

We have not granted any stock options to our executive officers since our incorporation.

Compensation Plans

We have not adopted any compensation plan to provide for future compensation of any of our directors or executive officers.

Director Compensation

Historically, our directors have not received compensation for their service. Notwithstanding, at some point in the near future, we plan to adopt a new director compensation program pursuant to which each of our non-employee directors will receive some form of an annual retainer. At such point in time, our corporate governance committee will review and make recommendations to the board regarding compensation of directors, including equity-based plans. We will reimburse our non-employee directors for reasonable travel expenses incurred in attending board and committee meetings. We also intend to allow our non-employee directors to participate in any equity compensation plans that we adopt in the future.

Executive Compensation Philosophy

Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executives or any future executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.

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Incentive Bonus

The Board of Directors may grant incentive bonuses to our executive officers and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.

Long-Term, Stock Based Compensation

In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executives and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.

SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information about the beneficial ownership of our common stock at March 30, 2017, as adjusted to reflect (i) the sale of 10,000,000 shares of our common stock in this offering, (ii) the issue of 14,475,676 shares of our common stock to the MMF Members in exchange for their membership units of Muscle Maker Brands, which exchange we assume will occur prior to the Offering, and (iii) the granting of 1,115,000 shares of our common stock to employees and consultants of Muscle Maker prior to the Offering, for:

● each person known to us to be the beneficial owner of more than 5% of our common stock;

● each named executive officer;

● each of our directors; and

● all of our executive officers and directors as a group.

Unless otherwise noted below, the address for each beneficial owner listed on the table is in care of Muscle Maker, Inc, 2200 Space Park Drive, Suite 310, Houston, Texas 77058. We have determined beneficial ownership in accordance with the rules of the SEC. We believe, based on the information furnished to us, that the persons and entities named in the tables below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws. We have based our calculation of the percentage of beneficial ownership on 54,150,788 shares of our common stock outstanding as of March 30, 2017 plus (i) 14,475,676 shares of our common stock which we assumed were issued to the MMF Members in exchange for their membership units in Muscle Maker Brands prior to the Offering and (ii) 1,115,000 shares of our common stock which we assumed were granted to our employees and consultants prior to the Offering.

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In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to options or restricted stock units held by that person that are currently exercisable or exercisable within 60 days of March 30, 2017. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

	Shares Beneficially Owned Prior to the Offering		Percentage of Shares Beneficially Owned
			Before Offering (1)			After Offering (1)(2)
Name of Beneficial Owner
5% Stockholders:
P. John, LLC (1)		6,184,107		8.87	%		7.76	%
Membership, LLC (1)		5,567,568		7.98	%		6.98	%
Directors and Named Executive Officers:
Timothy M. Betts		4,158,609		5.96	%		5.22	%
Robert E. Morgan(1)		2,831,610		4.06	%		3.55	%
Grady Metoyer(1)		150,000		0.22	%		0.19	%
Rod Silva(1)		1,126,397		1.62	%		1.41	%
Noel DeWinter		318,500		0.46	%		0.40	%
Merlin C. Spencer		250,256		0.36	%		0.31	%
A.B. Southall, III		884,009		1.27	%		1.11	%
Paul L. Menchik		1,155,942		1.66	%		1.45	%
All named executive officers and directors as a group (8 persons)		10,875,323		15.59	%		13.64	%

(1)

Assumes (i) the issue of 14,475,676 shares of our common stock to MMF Members for their membership units of MMB prior to the Offering (“Anticipated Exchange Shares”) and (ii) the grant of 1,115,000 shares of our common stock to our employees and consultants prior to the Offering (“Anticipated Share Grants”). More specifically, we assume that (i) of the Anticipated Exchange Shares that 6,124,324 shares, 5,567,568 shares, and 2,783,784 shares of common stock will be issued to P. John, LLC, Membership, LLC, and Robert E. Morgan, respectively, prior to the Offering and (ii) of the Anticipated Share Grants that 25,000 shares, 150,000 shares and 150,000 shares of common stock will be issued to P. John, LLC, Grady Metoyer, and Rod Silva, respectively, prior to the Offering.

(2)

Assumes the sale of all 10,000,000 shares of our common stock in this offering.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Policies and Procedures for Related Party Transactions

Following this offering, pursuant to the written charter of our Audit Committee, the Audit Committee will be responsible for reviewing and approving, prior to our entry into any such transaction, all related party transactions and potential conflict of interest situations involving:

● any of our directors, director nominees or executive officers;

● any beneficial owner of more than 5% of our outstanding stock; and

● any immediate family member of any of the foregoing.

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Our Audit Committee will review any financial transaction, arrangement or relationship that:

● involves or will involve, directly or indirectly, any related party identified above and is in an amount greater than $0;

● would cast doubt on the independence of a director;

● would present the appearance of a conflict of interest between us and the related party; or

● is otherwise prohibited by law, rule or regulation.

The Audit Committee will review each such transaction, arrangement or relationship to determine whether a related party has, has had or expects to have a direct or indirect material interest. Following its review, the Audit Committee will take such action as it deems necessary and appropriate under the circumstances, including approving, disapproving, ratifying, canceling or recommending to management how to proceed if it determines a related party has a direct or indirect material interest in a transaction, arrangement or relationship with us. Any member of the Audit Committee who is a related party with respect to a transaction under review will not be permitted to participate in the discussions or evaluations of the transaction; however, the Audit Committee member will provide all material information concerning the transaction to the Audit Committee. The Audit Committee will report its action with respect to any related party transaction to the board of directors.

Transactions with American Restaurants, LLC or American Restaurant Holdings, Inc.

On January 23, 2015, in connection with the acquisition of Muscle Maker Brands, we issued two promissory notes payable in the amount of $400,000 (“MM Note”) and $204,000 (“MMB Note”), respectively. MM Note includes interest imputed at the rate of 0.41% per annum and is payable in three installments with the final installment due eighteen months after the closing date of the Acquisition of Muscle Maker Brands. MMB Note was secured by the assets of Colonia, bore no stated interest and was due on March 9, 2015.

On January 23, 2015, Muscle Maker issued 40,500,000 shares of Common Stock to American Restaurant Holdings in exchange for cash of $3,645,000 and an obligation to repay an aggregate of $604,000 of principal due under MM Note and MMB Note.

On March 9, 2015, the American Restaurant Holdings repaid MMB Note in full. On July 21, 2015, January 23, 2016 and July 23, 2016, installments of $100,000, $150,000 and $150,000 were repaid on the balance of MM Note by the American Restaurant Holdings. As of July 23, 2016, there is no balance outstanding related to MM Note.

On December 31, 2015, we issued a promissory note in the amount of $1,082,620 to American Restaurant (the “2015 ARH Note”). The note bore note stated interest or maturity date, and was convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.50 per share. On March 14, 2017, American Restaurant Holdings elected to convert the 2015 ARH Note in the principal amount of $1,082,620 into 2,165,240 shares of Common Stock of Muscle Maker at a conversion price of $0.50 per share.

During the period from January 1 through December 15, 2016, we received $2,621,842 of advances from the American Restaurant Holdings. The payable due to the American Restaurant Holdings as a result of these advances was exchanged for a convertible promissory note in the amount of $2,621,842 (the “2016 ARH Note”). The 2016 ARH Note had no stated interest rate or maturity date and was convertible into shares of the Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the lender. The 2016 American Restaurant Holdings Note included a three-year warrant for the purchase of 2,294,112 shares of our common stock at an exercise price of $1.00 per share. On March 14, 2017, the American Restaurant Holdings elected to convert the 2016 ARH Note into 6,554,604 shares of Common Stock of Muscle Maker.

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During the period from December 31, 2016 through February 15, 2017, we received $980,949 of advances from the American Restaurant Holdings. The payable due to the American Restaurant Holdings as a result of these advances was exchanged for a convertible promissory note in the amount of $980,949 (the “2017 ARH Note”). The 2017 ARH Note had no stated interest rate or maturity date and was convertible into shares of Common Stock of Muscle Maker at a conversion price of $0.40 per share at a time to be determined by the lender. The 2017 ARH Note included a three-year warrant for the purchase of 858,330 shares of our common stock at an exercise price of $1.00 per share. On March 14, 2017, the American Restaurant Holdings elected to convert the 2017 ARH Note into 2,452,373 shares of our common stock.

Transactions with Officers and Executives of Muscle Maker

On December 22, 2014, Muscle Maker issued 100,000 shares of its common stock to the Chief Executive Officer of American Restaurant Holdings as founder shares for cash proceeds of $10.

On August 1, 2015, we entered into a consulting agreement (the “Consulting Agreement”) with an officer of Custom Technology, Inc, who is also a stockholder of CTI, (the “Consultant”). The Consulting Agreement has a term of five years, and automatically extends for successive one-year periods, unless either party provides written notice of termination at least 60 days prior to the end of the term. Pursuant to the terms of the agreement, the Consultant will receive a base fee of $11,667 per month. In connection with the agreement, we provided a $100,000 advance to the consultant, to be repaid in equal monthly installments of $1,667, over the term of the consulting agreement.

On January 24, 2015, we granted 200,000 shares of our common stock valued at $0.14 per share to our Director of Brand Development, in connection with his employment agreement. On January 24, 2015, we issued 428,571 shares of our common stock to the Director of Brand Development in exchange for cash proceeds of $0.14 per share, or $60,000.

We intend to enter into indemnification agreements with or have contractual obligations to provide indemnification to each of our directors and intend to enter into such agreements with certain of our executive officers. These agreements require us, among other things, to indemnify these individuals for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on behalf of our company or that person’s status as a member of our Board of Directors to the maximum extent allowed under California law.

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DESCRIPTION OF CAPITAL STOCK

We are offering 10,000,000 shares of Common Stock pursuant to this Offering Circular. The following description of our capital stock is based upon our articles of incorporation, as amended, our bylaws, as amended, and applicable provisions of law, in each case as currently in effect. This discussion does not purport to be complete and is qualified in its entirety by reference to our articles of incorporation, as amended, and our bylaws, as amended, copies of which are filed with the SEC as exhibits to this Offering Circular.

Pursuant to our Articles of Incorporation filed with the California Secretary of State on December 8, 2014, our authorized capital stock consists of 100,000,000 shares of common stock, no par value per share. As of March 30, 2017, we had 54,150,788 shares of common stock issued and outstanding. We had 562 holders of record of our common stock as of March 30, 2017.

COMMON STOCK

Holders of the Company’s common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. The holders of common stock have cumulative voting rights with respect to the election of directors, which means that the shareholders have a number of votes equal to the number of shares held by each shareholder, multiplied by the number of directors to be elected. A shareholder can cast all of its votes in favor of one candidate, or distribute them among the directors to be elected, as the shareholder may decide. Holders of the Company’s common stock representing a majority of the voting power of the Company’s capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders.

Holders of the Company’s common stock are entitled to share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The Company’s common stock has no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the Company’s common stock.

Cash Dividends

As of the date of this Offering Circular, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial position, the general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

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Anti-Takeover Effects of Certain Provisions of Our Bylaws

Provisions of our bylaws could make it more difficult to acquire us by means of a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.

Calling of Special Meetings of Stockholders. Our bylaws provide that special meetings of the stockholders may be called only by the board of directors, chairman of the board, or by holders of shares entitled to cast not less than ten percent of the votes at the meeting.

Amendment of Bylaws. Our bylaws provide that our board of directors may amend or repeal the bylaws, or new bylaws may be adopted by the board of directors, at any time without stockholder approval. Allowing the board to amend our bylaws without stockholder approval enhances board control over our bylaws.

Indemnification of Directors and Officers

Section 317 of the California Corporations Code, or the California Code, authorizes a corporation to indemnify, subject to certain exceptions, any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of the corporation to procure a judgment in its favor) by reason of the fact that such person is or was an agent of the corporation, as the term “agent” is defined in section 317(a) of the California Code, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. A corporation is further authorized to indemnify, subject to certain exceptions, any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was an agent of the corporation, against expenses actually and reasonably incurred by that person in connection with the defense or settlement of the action if the person acted in good faith, in a manner the person believed to be in the best interests of the corporation and its shareholders.

Section 204 of the California Code provides that a corporation’s articles of incorporation may not limit the liability of directors (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard for the director’s duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of a serious injury to the corporation or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the corporation or its shareholders, (vi) under Section 310 of the California Code (concerning transactions between corporations and directors or corporations having interrelated directors) or (vii) under Section 316 of the California Code (concerning directors’ liability for distributions, loans, and guarantees).

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Section 204 further provides that a corporation’s articles of incorporation may not limit the liability of directors for any act or omission occurring prior to the date when the provision became effective or any act or omission as an officer, notwithstanding that the officer is also a director or that his or her actions, if negligent or improper, have been ratified by the directors. Further, Section 317 has no effect on claims arising under federal or state securities laws and does not affect the availability of injunctions and other equitable remedies available to a corporation’s shareholders for any violation of a director’s fiduciary duty to the corporation or its shareholders.

The Company’s Articles of Incorporation provide for the elimination of liability for its directors to the fullest extent permissible under California law and authorize it to provide indemnification to directors, officers, employees or other agents through bylaw provisions, agreements with agents, vote of shareholders or disinterested directors or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Code, subject only to the applicable limits with respect to actions for breach of duty to the Company and its shareholders. The Company’s Articles of Incorporation also provides that any repeal or modification of the indemnification provisions of the Articles of Incorporation by the shareholders of the Company shall have no adverse affect on any rights or protection of an agent of the Company existing at the time of such repeal or modification.

The Company’s Bylaws provide that it shall indemnify its directors and officers, employees and agents against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was its agent. The Company’s Bylaws also contain provisions expressing the intent that these bylaws provide indemnity in excess of that expressly permitted by Section 317 of the California Code to indemnify each of its employees and agents (other than directors and officers) against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was its agent.

The Company’s Bylaws further provide that it may advance expenses incurred in defending any proceeding for which indemnification is required or permitted, following authorization thereof by the board of directors, prior to the final disposition of the proceeding upon receipt of an undertaking by or on behalf of the indemnified party to repay that amount if it shall be determined ultimately that the indemnified person is not entitled to be indemnified as authorized by its Bylaws.

Insofar as the limitation of, or indemnification for, liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the SEC, such limitation or indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Transfer Agent

Interwest Transfer Company, Inc. is the transfer agent and registrar for our common stock.

Interwest Transfer Company, Inc.’s address is at 1981 Murray Holladay Road, Suite 100, Salt Lake City, UT 84117 and its telephone number is (801) 292-9294.

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SHARES ELIGIBLE FOR FUTURE SALE

Shares Eligible for Future Sale

Prior to this offering, there has been no public market for our common stock, and we cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Nevertheless, sales of substantial amounts of our common stock, including shares issued upon exercise of outstanding options or warrants, or the perception that these sales could occur in the public market after this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities.

Based on the number of shares of common stock outstanding as of March 30, 2017, upon the closing of this offering, 79,741,464 shares of common stock will be outstanding. Included in the number of shares of common stock outstanding are 14,475,676 shares of our common stock which we assume will be issued to MMF Members in exchange for their membership units of Muscle Maker Brands prior to this Offering.

All of the shares sold in this offering will be freely tradable unless purchased by our affiliates. The remaining 69,741,464 shares of common stock outstanding after this offering will be restricted as a result of securities laws or lock-up agreements as described below. Following the expiration of the lock-up period, all shares will be eligible for resale in compliance with Rule 144 or Rule 701 to the extent these shares have been released from any repurchase option that we may hold.

Rule 144

In general, under Rule 144 as currently in effect, any person who is or has been an affiliate of ours during the 90 days immediately preceding the sale and who has beneficially owned shares for at least six months is entitled to sell, within any three-month period commencing 90 days after the date of this Offering Circular, a number of shares that does not exceed the greater of:

● 1% of the then-outstanding shares of common stock, which will equal approximately 797,414 shares immediately after this offering; and

● the average weekly trading volume during the four calendar weeks preceding the sale, subject to the filing of a Form 144 with respect to the sale.

Sales under Rule 144 by our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

A person who is not deemed to have been an affiliate of ours at any time during the 90 days immediately preceding the sale and who has beneficially owned his or her shares for at least six months is entitled to sell his or her shares under Rule 144 without regard to the limitations described above, subject only to the availability of current public information about us during the six months after the initial six-month holding period is met. After a non-affiliate has beneficially owned his or her shares for one year or more, he or she may freely sell his or her shares under Rule 144 without complying with any Rule 144 requirements.

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We are unable to estimate the number of shares that will be sold under Rule 144, since this will depend on the market price for our common stock, the personal circumstances of the sellers and other factors. Prior to the offering, there has been no public market for the common stock, and there can be no assurance that a significant public market for the common stock will develop or be sustained after the offering. Any future sale of substantial amounts of the common stock in the open market may adversely affect the market price of the common stock offered by this Offering Circular.

Rule 701

In general, under Rule 701 under the Securities Act, any of our employees, directors, consultants or advisors who purchased shares from us in connection with a qualified compensatory stock or option plan or other written agreement and in compliance with Rule 701, is eligible to resell those shares 90 days after the effective date of this offering in reliance on Rule 144, but without compliance with the various restrictions, including the holding period, contained in Rule 144.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a summary of certain United States federal income tax consequences generally applicable to the ownership and disposition of our common stock by a non-U.S. holder (as defined below) that purchases our common stock pursuant to this offering and holds such common stock as a “capital asset” within the meaning of the Code. This discussion is based on currently existing provisions of the Code, applicable United States Treasury regulations promulgated thereunder, judicial decisions, and rulings and pronouncements of the United States Internal Revenue Service (the “IRS”) all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or subject to different interpretation. This discussion does not address all the tax consequences that may be relevant to specific holders in light of their particular circumstances or to holders subject to special treatment under United States federal income tax laws (such as financial institutions, insurance companies, tax-exempt organizations, controlled foreign corporations, passive foreign investment companies, retirement plans, partnerships and their partners, dealers in securities, brokers, United States expatriates, persons who have acquired our common stock as compensation or otherwise in connection with the performance of services, or persons who have acquired our common stock as part of a straddle, hedge, conversion transaction or other integrated investment). This discussion does not address the state, local, or foreign tax or United States federal estate or alternative minimum tax consequences relating to the ownership and disposition of our common stock. Prospective investors should consult their tax advisors regarding the United States federal tax consequences of owning and disposing of our common stock, as well as the applicability and effect of any state, local or foreign tax laws.

As used in this discussion, the term “non-U.S. holder” refers to a beneficial owner of our common stock that is not, for United States federal income tax purposes, any of the following:

● an individual who is a citizen or resident of the United States;

● a corporation (or other entity or arrangement taxable as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;

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● any entity or arrangement treated as a partnership for United States federal income tax purposes;

● an estate the income of which is subject to United States federal income tax regardless of its source; or

● a trust (i) if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions, or (ii) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.

If a partnership or other entity or arrangement treated as a partnership for United States federal income tax purposes holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. A partnership that holds our common stock and any partner who owns an interest in such a partnership should consult their tax advisors regarding the United States federal income tax consequences of an investment in our common stock.

You should consult your tax advisors concerning the particular United States federal income tax consequences to you of the purchase, ownership, and disposition of our common stock as well as the consequences to you arising under the laws of any other applicable taxing jurisdiction in light of your particular circumstances.

Distributions on Common Stock

Distribustions Common Stock 

As discussed under “Dividend Policy” above, we do not currently expect to make distributions on our stock. If we do make a distribution of cash or other property (other than certain distributions of our stock or rights to acquire our stock) in respect of our common stock, the distribution generally will be treated as a dividend to the extent of our current or accumulated earnings and profits as determined under United States federal income tax principles. Any portion of a distribution that exceeds our current and accumulated earnings and profits will generally be treated first as a tax-free return of capital, on a share-by-share basis, to the extent of the non-U.S. holder’s tax basis in our common stock, and, to the extent such portion exceeds the non-U.S. holder’s tax basis in our common stock, the excess will be treated as gain from the disposition of the common stock, the tax treatment of which is discussed below under “—Sale, Exchange or Other Taxable Disposition.”

The gross amount of dividends paid to a non-U.S. holder with respect to our common stock generally will be subject to United States federal withholding tax at a rate of 30%, unless (i) an applicable income tax treaty reduces or eliminates such tax, and the non-U.S. holder certifies that it is eligible for the benefits of such treaty in the manner described below, or (ii) the dividends are effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment maintained by the non-U.S. holder in the United States) and the non-U.S. holder satisfies certain certification and disclosure requirements. In the latter case, generally, a non-U.S. holder will be subject to United States federal income tax with respect to such dividends on a net income basis at regular graduated United States federal income tax rates in the same manner as a United States person (as defined under the Code). Additionally, a non-U.S. holder that is a corporation may be subject to a branch profits tax equal to 30% (or such lower rate as may be specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items.

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A non-U.S. holder that wishes to claim the benefit of an applicable income tax treaty with respect to dividends on our common stock will be required to provide the applicable withholding agent with a valid IRS Form W-8BEN or W-8BEN-E (or other applicable form) and certify under penalties of perjury that such holder (i) is not a United States person (as defined under the Code) and (ii) is eligible for the benefits of such treaty, and the withholding agent must not have actual knowledge or reason to know that the certification is incorrect. This certification must be provided to the applicable withholding agent prior to the payment of dividends and may be required to be updated periodically. If our common stock is held through a non-United States partnership or non-United States intermediary, such partnership or intermediary will also be required to comply with additional certification requirements under applicable Treasury regulations. A non-U.S. holder eligible for a reduced rate of United States federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

Prospective investors, and in particular prospective investors engaged in a United States trade or business, are urged to consult their tax advisors regarding the United States federal income tax consequences of owning our common stock.

Sale, Exchange, or Other Taxable Disposition

Generally, a non-U.S. holder will not be subject to United States federal income tax on gain realized upon the sale, exchange, or other taxable disposition of our common stock unless (i) the gain is effectively connected with such non-U.S. holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States), (ii) such non-U.S. holder is an individual present in the United States for 183 days or more in the taxable year of the sale, exchange, or other taxable disposition and certain other conditions are satisfied, or (iii) we are or become a “United States real property holding corporation” (as defined in Section 897(c) of the Code) at any time during the shorter of the five-year period ending on the date of disposition or the non-U.S. holder’s holding period for our common stock and either (a) our common stock has ceased to be traded on an established securities market prior to the beginning of the calendar year in which the sale, exchange or other taxable disposition occurs, or (b) the non-U.S. holder owns (actually or constructively) more than five percent of our common stock at some time during the shorter of the five-year period ending on the date of disposition or such holder’s holding period for our common stock. Although there can be no assurances in this regard, we believe that we are not a United States real property holding corporation, and we do not expect to become a United States real property holding corporation.

Generally, gain described in clause (i) of the immediately preceding paragraph will be subject to tax on a net income basis at regular graduated United States federal income tax rates in the same manner as if the non-U.S. holder were a United States person (as defined under the Code). A non-U.S. holder that is a corporation may also be subject to a branch profits tax equal to 30% (or such lower rate as may be specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. An individual non-U.S. holder described in clause (ii) of the immediately preceding paragraph will be required to pay (subject to applicable income tax treaties) a flat 30% tax on the gain derived from the sale, exchange, or other taxable disposition, which may be offset by certain United States source capital losses, even though the individual is not considered a resident of the United States.

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Foreign Account Tax Compliance Act

Withholding at a rate of 30% is required on dividends in respect of our common stock, and, after December 31, 2016 will be required on gross proceeds from the sale or other disposition of our common stock, in each case, held by or through certain foreign financial institutions (including investment funds), unless such institution enters into an agreement with the United States Treasury Department to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain United States persons and by certain non-United States entities that are wholly or partially owned by United States persons and to withhold on certain payments. An intergovernmental agreement between the United States and an applicable foreign country, or future Treasury regulations, may modify these requirements. Accordingly, the entity through which our common stock is held will affect the determination of whether such withholding is required. Similarly, dividends in respect of, and gross proceeds from the sale or other disposition of, our common stock held by an investor that is a non-financial non-United States entity that does not qualify under certain exemptions will be subject to withholding at a rate of 30%, unless such entity either (i) certifies that such entity does not have any substantial United States owners or (ii) provides certain information regarding the entity’s substantial United States owners. Prospective investors should consult their tax advisors regarding the possible implications of these rules on their investment in our common stock.

ADDITIONAL REQUIREMENTS AND RESTRICTIONS

Broker-Dealer Requirements

Each of the participating broker-dealers, authorized registered representatives or any other person selling Offered Shares on our behalf is required to:

● make every reasonable effort to determine that the purchase of Offered Shares is a suitable and appropriate investment for each investor based on information provided by such investor to the broker-dealer, including such investor’s age, investment objectives, income, net worth, financial situation and other investments held by such investor; and

● maintain, for at least six (6) years, records of the information used to determine that an investment in our Offered Shares is suitable and appropriate for each investor.

In making this determination, your participating broker-dealer, authorized registered representative or other person selling Offered Shares on our behalf will, based on a review of the information provided by you, consider whether you:

● meet the minimum suitability standards established by us and the investment limitations established under Regulation A;

● can reasonably benefit from an investment in our Offered Shares based on your overall investment objectives and portfolio structure;

● are able to bear the economic risk of the investment based on your overall financial situation; and

● have an apparent understanding of:

● the fundamental risks of an investment in the Offered Shares;

● the risk that you may lose your entire investment;

● the lack of liquidity of the Offered Shares;

● the restrictions on transferability of the Offered Shares;

● the background and qualifications of our management; and

● our business.

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Restrictions Imposed by the USA PATRIOT Act and Related Acts

In accordance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or the USA PATRIOT Act, the securities offered hereby may not be offered, sold, transferred or delivered, directly or indirectly, to any “unacceptable investor,” which means anyone who is:

● a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in the Foreign Assets Control Regulations of the United States, or U.S., Treasury Department;

● acting on behalf of, or an entity owned or controlled by, any government against whom the U.S. maintains economic sanctions or embargoes under the Regulations of the U.S. Treasury Department;

● within the scope of Executive Order 13224 — Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001;

● a person or entity subject to additional restrictions imposed by any of the following statutes or regulations and executive orders issued thereunder: the Trading with the Enemy Act, the National Emergencies Act, the Antiterrorism and Effective Death Penalty Act of 1996, the International Emergency Economic Powers Act, the United Nations Participation Act, the International Security and Development Cooperation Act, the Nuclear Proliferation Prevention Act of 1994, the Foreign Narcotics Kingpin Designation Act, the Iran and Libya Sanctions Act of 1996, the Cuban Democracy Act, the Cuban Liberty and Democratic Solidarity Act and the Foreign Operations, Export Financing and Related Programs Appropriations Act or any other law of similar import as to any non-U.S. country, as each such act or law has been or may be amended, adjusted, modified or reviewed from time to time; or

● designated or blocked, associated or involved in terrorism, or subject to restrictions under laws, regulations, or executive orders as may apply in the future similar to those set forth above.

ERISA CONSIDERATIONS

An investment in us by an employee benefit plan is subject to additional considerations because the investments of these plans are subject to the fiduciary responsibility and prohibited transaction provisions of ERISA and restrictions imposed by Section 4975 of the Code. For these purposes the term “employee benefit plan” includes, but is not limited to, qualified pension, profit-sharing and stock bonus plans, Keogh plans, simplified employee pension plans and tax deferred annuities or IRAs established or maintained by an employer or employee organization. Among other things, consideration should be given to:

● whether the investment is prudent under Section 404(a)(1)(B) of ERISA;

● whether in making the investment, that plan will satisfy the diversification requirements of Section 404(a)(1)(C) of ERISA; and

● whether the investment will result in recognition of unrelated business taxable income by the plan and, if so, the potential after-tax investment returns.

The person with investment discretion with respect to the assets of an employee benefit plan, often called a fiduciary, should determine whether an investment in us is authorized by the appropriate governing instrument and is a proper investment for the plan.

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Section 406 of ERISA and Section 4975 of the Code prohibit employee benefit plans from engaging in specified transactions involving “plan assets” with parties that are “parties in interest” under ERISA or “disqualified persons” under the Code with respect to the plan.

In addition to considering whether the purchase of Offered Shares is a prohibited transaction, a fiduciary of an employee benefit plan should consider whether the plan will, by investing in us, be deemed to own an undivided interest in our assets, with the result that our operations would be subject to the regulatory restrictions of ERISA, including its prohibited transaction rules, as well as the prohibited transaction rules of the Code.

The Department of Labor regulations provide guidance with respect to whether the assets of an entity in which employee benefit plans acquire equity interests would be deemed “plan assets” under some circumstances. Under these regulations, an entity’s assets would not be considered to be “plan assets” if, among other things:

(1) the equity interests acquired by employee benefit plans are publicly offered securities - i.e., the equity interests are widely held by 100 or more investors independent of the issuer and each other, freely transferable and registered under some provisions of the federal securities laws;

(2) the entity is an “operating company”—i.e., it is primarily engaged in the production or sale of a product or service other than the investment of capital either directly or through a majority-owned subsidiary or subsidiaries; or

(3) there is no significant investment by benefit plan investors, which is defined to mean that less than 25% of the value of each class of equity interest is held by the employee benefit plans referred to above.

We do not intend to limit investment by benefit plan investors in us because we anticipate that we will qualify as an “operating company”. If the Department of Labor were to take the position that we are not an operating company and we had significant investment by benefit plans, then we may become subject to the regulatory restrictions of ERISA which would likely have a material adverse effect on our business and the value of our common stock.

Plan fiduciaries contemplating a purchase of Offered Shares should consult with their own counsel regarding the consequences under ERISA and the Code in light of the serious penalties imposed on persons who engage in prohibited transactions or other violations.

ACCEPTANCE OF SUBSCRIPTIONS ON BEHALF OF PLANS IS IN NO RESPECT A REPRESENTATION BY OUR BOARD OF DIRECTORS OR ANY OTHER PARTY RELATED TO US THAT THIS INVESTMENT MEETS THE RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY ANY PARTICULAR PLAN OR THAT THIS INVESTMENT IS APPROPRIATE FOR ANY PARTICULAR PLAN. THE PERSON WITH INVESTMENT DISCRETION SHOULD CONSULT WITH HIS OR HER ATTORNEY AND FINANCIAL ADVISERS AS TO THE PROPRIETY OF AN INVESTMENT IN US IN LIGHT OF THE CIRCUMSTANCES OF THE PARTICULAR PLAN.

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LEGAL MATTERS

The validity of the securities offered by this Offering Circular will be passed upon for us by Legal & Compliance, LLC, 330 Clematis Street, Suite 217, West Palm Beach, Florida 33401.

EXPERTS

Our consolidated balance sheets as of December 31, 2015 and December 31, 2014 and the related consolidated statement of operations, changes in stockholders’ equity and cash flows for the period from January 23, 2015 through December 31, 2015 (the Successor period) and the period from January 1, 2015 through January 22, 2015 and for the year ended December 31, 2014 (the Predecessor periods) included in this Offering Circular have been audited by Marcum LLP independent registered public accounting firm, as indicated in their report with respect thereto, and have been so included in reliance upon the report of such firm given on their authority as experts in accounting and auditing.

APPOINTMENT OF AUDITOR

On August 1, 2016, our board of directors appointed Marcum LLP as our independent registered public accounting firm. Marcum LLP audited our financial statements as of December 31, 2015 and 2014, and for the period from January 23, 2015 through December 31, 2015 (the Successor period) and the period from January 1, 2015 through January 22, 2015 and for the year ended December 31, 2014 (the Predecessor periods), which have been included in this Offering Circular. Prior to engaging Marcum LLP as our independent registered public accounting firm, we did not have an independent registered public accounting firm to audit our financial statements.

WHERE YOU CAN FIND MORE INFORMATION

We have filed an offering statement on Form 1-A with the Commission under Regulation A of the Securities Act with respect to the Common Stock offered by this Offering Circular. This Offering Circular, which constitutes a part of the offering statement, does not contain all of the information set forth in the offering statement or the exhibits and schedules filed therewith. For further information with respect to us and our Common Stock, please see the offering statement and the exhibits and schedules filed with the offering statement. Statements contained in this Offering Circular regarding the contents of any contract or any other document that is filed as an exhibit to the offering statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the offering statement. The offering statement, including its exhibits and schedules, may be inspected without charge at the public reference room maintained by the Commission, located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, and copies of all or any part of the offering statement may be obtained from such offices upon the payment of the fees prescribed by the Commission. Please call the Commission at 1-800-SEC-0330 for further information about the public reference room. The Commission also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of the site is www.sec.gov.

We also maintain a website at www.musclemakergrill.com. After the completion of this offering, you may access these materials at our website free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the Commission. Information contained on our website is not a part of this Offering Circular and the inclusion of our website address in this Offering Circular is an inactive textual reference only.

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After the completion of this Tier II, Regulation A offering, we intend to become subject to the information and periodic reporting requirements of the Exchange Act. If we become subject to the reporting requirements of the Exchange Act, we will file periodic reports, proxy statements and other information with the Commission. Such periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and on the Commission’s website referred to above. Until we become or never become subject to the reporting requirements of the Exchange Act, we will furnish the following reports, statements, and tax information to each stockholder:

1.	Reporting Requirements under Tier II of Regulation A. Following this Tier II, Regulation A offering, we will be required to comply with certain ongoing disclosure requirements under Rule 257 of Regulation A. We will be required to file: an annual report with the SEC on Form 1-K; a semi-annual report with the SEC on Form 1-SA; current reports with the SEC on Form 1-U; and a notice under cover of Form 1-Z. The necessity to file current reports will be triggered by certain corporate events, similar to the ongoing reporting obligation faced by issuers under the Exchange Act, however the requirement to file a Form 1-U is expected to be triggered by significantly fewer corporate events than that of the Form 8-K. Such reports and other information will be available for inspection and copying at the public reference room and on the Commission’s website referred to above. Parts I & II of Form 1-Z will be filed by us if and when we decide to and are no longer obligated to file and provide annual reports pursuant to the requirements of Regulation A.
2.	Annual Reports. As soon as practicable, but in no event later than one hundred twenty (120) days after the close of our fiscal year, ending on the last Sunday of a calendar year, our board of directors will cause to be mailed or made available, by any reasonable means, to each Stockholder as of a date selected by the board of directors, an annual report containing financial statements of the Company for such fiscal year, presented in accordance with GAAP, including a balance sheet and statements of operations, company equity and cash flows, with such statements having been audited by an accountant selected by the board of directors. The board of directors shall be deemed to have made a report available to each stockholder as required if it has either (i) filed such report with the SEC via its Electronic Data Gathering, Analysis and Retrieval, or EDGAR, system and such report is publicly available on such system or (ii) made such report available on any website maintained by the Company and available for viewing by the stockholders.
3.	Tax Information. On or before January 31st of the year immediately following our fiscal year, which is currently January 1st through December 31st, we will send to each stockholder such tax information as shall be reasonably required for federal and state income tax reporting purposes.

141

MUSCLE MAKER, INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2015 and 2014

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONTENTS 

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Financial Statements
Balance Sheets as of December 31, 2015 (Successor) and 2014 (Predecessor)	F-3
Statements of Operations for the period from January 23, 2015 through December 31, 2015 (Successor period), the period from January 1, 2015 through January 22, 2015, and the year ended December 31, 2014 (Predecessor periods)	F-4
Statements of Changes in Stockholders’ Equity / Members’ Deficit for the period from January 23, 2015 through December 31, 2015 (Successor period), the period from January 1, 2015 through January 22, 2015, and the year ended December 31, 2014 (Predecessor periods)	F-5
Statements of Cash Flows for the period from January 23, 2015 through December 31, 2015 (Successor period), the period from January 1, 2015 through January 22, 2015, and the year ended December 31, 2014 (Predecessor periods)	F-6
Notes to Consolidated Financial Statements	F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders / Members

Muscle Maker, Inc. & Subsidiaries

We have audited the accompanying consolidated financial statements of Muscle Maker, Inc. and Subsidiaries (the “Company”), which consist of the consolidated balance sheets as of December 31, 2015 and 2014, and the related consolidated statements of operations, changes in stockholders’ equity / members’ deficit, and cash flows for the period from January 23, 2015 through December 31, 2015 (the Successor period) and the period from January 1, 2015 through January 22, 2015 and for the year ended December 31, 2014 (the Predecessor periods). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Muscle Maker, Inc. and Subsidiaries, as of December 31, 2015 and 2014, and the related consolidated statements of operations, changes in stockholders’ equity / members’ deficit, and cash flows for the period from January 23, 2015 through December 31, 2015 (the Successor period) and the period from January 1, 2015 through January 22, 2015 and for the year ended December 31, 2014 (the Predecessor periods), in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has had recurring losses, and has a working capital and stockholders' deficit as of December 31, 2015. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Marcum LLP

Marcum LLP

New York, NY

March 30, 2017

F-2

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

	Successor			Predecessor
	December 31, 2015			December 31, 2014
Assets
Current Assets:
Cash	$	409,563		$	40,319
Restricted cash		189,715			78,027
Accounts receivable, net of allowance for doubtful accounts of $4,500 and $0 at December 31, 2015 and 2014, respectively		60,621			1,525
Inventory		14,199			8,599
Receivable from Parent, current portion		300,000			-
Current portion of loans receivable		67,755			22,143
Current portion of loans receivable from related parties		20,000			48,576
Prepaid expenses and other current assets		118,369			83,250
Total Current Assets
		1,180,222			282,439
Property and equipment, net		88,800			42,323
Goodwill		2,521,468			-
Intangible assets, net		3,813,494			-
Receivable from Parent - non current		329,907			-
Loans receivable - non current		30,603			17,821
Loan receivable from related party - non current		71,667			-
Security deposits and other assets		102,209			4,364
Total Assets	$	8,138,370		$	346,947
Liabilities and Stockholders' Equity / Members' (Deficit)
Current Liabilities:
Accounts payable and accrued expenses	$	93,161		$	17,328
Notes payable		308,100			376,912
Deferred revenue		646,501			718,501
Other current liabilities		193,967			80,639
Total Current Liabilities		1,241,729			1,193,380
Convertible note payable to Parent, net of debt discount of $216,524 at December 31, 2015		866,096			-
Deferred tax liability		119,245			-
Total Liabilities		2,227,070			1,193,380
Commitments and Contingencies
Stockholders' Equity / Members' (Deficit)
Members' deficit		-			(846,433	)
Common stock, no par value, 100,000,000 shares authorized, 42,978,571 shares issued and outstanding		5,157,010			-
Additional paid-in capital		216,524			-
Accumulated deficit		(732,057	)		-
Total Controlling Interest		4,641,477			(846,433	)
Non-controlling interest		1,269,823			-
Total Stockholders' Equity / Members' (Deficit)		5,911,300			(846,433	)
Total Liabilities and Stockholders' Equity / Members' (Deficit)	$	8,138,370		$	346,947

See Notes to the Consolidated Financial Statements

F-3

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Successor			Predecessor
	For the period			For the period			For the
	January 23, through			January 1, through			year ended
	December 31, 2015			January 22, 2015			December 31, 2014
Revenues:
Restaurant sales, net of discounts	$	981,690		$	50,868		$	754,957
Franchise royalty revenue		1,096,583			62,837			1,214,023
Franchise fees		293,500			5,500			505,992
Other revenues		612,192			21,653			505,905
Total Revenues		2,983,965			140,858			2,980,877
Operating costs and expenses:
Food and beverage costs		317,780			16,188			250,442
Depreciation and amortization		117,272			3,363			52,326
Compensation expense		1,515,611			55,483			769,964
General and administrative expenses		1,872,670			129,751			1,780,233
Total operating costs and expenses		3,823,333			204,785			2,852,965
(Loss) Income from operations		(839,368	)		(63,927	)		127,912
Other Income (Expense):
Other income (expense)		(1,045	)		1,000			7,922
Interest income (expense), net		883			61			(2,927	)
Total Other Income (Expense)		(162	)		1,061			4,995
Net (Loss) Income Before Income Tax		(839,530	)		(62,866	)		132,907
Income tax provision		(119,245	)		-			-
Net (Loss) Income		(958,775	)		(62,866	)		132,907
Net loss attributable to the non-controlling interest		(226,718	)		-			-
Net (Loss) Income Attributable to Controlling Interest	$	(732,057	)	$	(62,866	)	$	132,907
Net Loss Attributable to Controlling Interest Per Share:
Basic and Diluted	$	(0.02	)
Weighted Average Number of Common Shares Outstanding:
Basic and Diluted		42,130,591

See Notes to the Consolidated Financial Statements

F-4

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY / MEMBERS’ (DEFICIT)

	Member's			No Par Common Stock				Additional Paid-in		Accumulated			Non Controlling			Total Equity
	Deficit			Shares		Amount		Capital		Deficit			Interest			(Deficit)
Predecessor
Balance - December 31, 2013	$	(979,340	)		-	$	-	$	-	$	-		$	-		$	(979,340	)
Net income		132,907			-		-		-		-			-			132,907
Balance - December 31, 2014		(846,433	)		-		-		-		-			-			(846,433	)
Net loss		(62,866	)		-		-		-		-			-			(62,866	)
Balance - January 22, 2015	$	(909,299	)		-	$	-	$	-	$	-		$	-		$	(909,299	)
Successor
Balance - January 23, 2015	$	-			100,000	$	10	$	-	$	-		$	-		$	10
Common stock issued to Parent,for cash and the obligation to pay certain promissory notes		-			40,500,000		4,249,000		-		-			-			4,249,000
Issuance of common stock to certain  members of MMF in connection  with acquisition of MMB		-			500,000		70,000		-		-			1,466,541			1,536,541
Issuance of common stock in connection  with employment agreement		-			200,000		28,000		-		-			-			28,000
Issuance of common stock and warrants  for cash		-			1,678,571		810,000		-		-			-			810,000
Beneficial conversion feature - ARH Note		-			-		-		216,524		-			-			216,524
Non-controlling interest in CTI		-			-		-		-		-			30,000			30,000
Net loss		-			-		-		-		(732,057	)		(226,718	)		(958,775	)
Balance - December 31, 2015	$	-			42,978,571	$	5,157,010	$	216,524	$	(732,057	)	$	1,269,823		$	5,911,300

See Notes to the Consolidated Financial Statements

F-5

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Successor			Predecessor
	For the period			For the period
	January 23,			January 1,			For the
	through			through			Year Ended
	December 31, 2015			January 22, 2015			December 31, 2014
Cash Flows from Operating Activities
Net (Loss) Income	$	(958,775	)	$	(62,866	)	$	132,907
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		117,272			3,363			52,326
Stock-based compensation		28,000			-			-
Bad debt expense		4,500			28,576			8,180
Deferred income tax provision		119,245			-			-
Changes in operating assets and liabilities:
Restricted cash		(189,715	)		(25,858	)		130,991
Accounts receivable		(64,148	)		2,926			1,039
Inventory		(3,100	)		-			3,576
Prepaid expenses and other current assets		(110,065	)		26,368			6,262
Accounts payable and accrued expenses		80,851			(454	)		(36,025	)
Deferred revenues		(72,000	)		(12,000	)		(175,338	)
Other current liabilities		193,967			23,057			(130,917	)
Security deposits and other assets		(15,116	)		-			-
Total adjustments		89,691			45,978			(139,906	)
Net Cash Used in Operating Activities		(869,084	)		(16,888	)		(6,999	)
Cash Flows from Investing Activities
Purchase of property and equipment		(61,520	)		-			(10,270	)
Cash paid in connection with the acquisition of Springfield		(12,000	)		-			-
Cash paid in connection with the acquisition of CTI		(70,000	)		-			-
Cash paid in connection with the acquisition of MMB, net of cash acquired		(3,555,592	)		-			-
Issuances of loan receivable - related party		(100,000	)		-			(38,309	)
Issuances of loans receivable		(93,206	)		(3,182	)		-
Collections from loans receivable - related party		28,333			-			-
Collections from loans receivable		35,912			1,600			81,633
Net Cash (Used in) Provided by Investing Activities		(3,828,073	)		(1,582	)		33,054
Cash Flows from Financing Activities
Proceeds from convertible note payable to Parent		720,620			-			-
Proceeds from notes payable		-			-			-
Repayments of notes payable		(68,900	)		-			(163,812	)
Issuance of common stock to Parent for cash		3,645,000			-			-
Issuance of common stock and warrants for cash		810,000			-			-
Net Cash Provided by (Used in) Financing Activities		5,106,720			-			(163,812	)
Net Increase (Decrease) in Cash		409,563			(18,470	)		(137,757	)
Cash - Beginning of Period		-			40,319			178,076
Cash - End of Period	$	409,563		$	21,849		$	40,319

See Notes to the Consolidated Financial Statements

F-6

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

	Successor			Predecessor
	For the period			For the period
	January 23,			January 1,		For the
	through			through		Year Ended
	December 31, 2015			January 22, 2015		December 31, 2015
Supplemental Disclosures of Cash Flow Information:
Cash Paid For Interest	$	-		$	-	$	3,857
Supplemental disclosures of non-cash investing and financing activities
Beneficial conversion feature	$	216,524		$	-	$	-
Issuance of common stock to Parent in exchange for promise to pay notes payable	$	604,000			-	$	-
Payment on the promissory notes by Parent	$	(249,000	)	$	-	$	-
Non-cash advance for convertible note payable - Parent	$	362,000		$	-	$	-
Security deposit paid by Parent in exchange for reduction in receivable from Parent	$	87,093		$	-	$	-
Supplemental non-cash investing and financing activity - acquisition of 74% Muscle Maker Brands, LLC
Assets acquiried and liabilities assumed:
Cash	$	14,408		$	-	$	-
Accounts receivable		973			-		-
Inventory		8,599			-		-
Loans receivable		41,064			-		-
Loans receivable - related party		20,000			-		-
Property and equipment, net		30,376			-		-
Goodwill		2,437,578			-		-
Intangible asset - trademarks		2,524,000			-		-
Intangible asset - franchise agreements		1,360,000			-		-
Security deposit and other assets		4,364			-		-
Accounts Payable and accrued expenses		(12,320	)		-		-
Deferred revenue		(718,501	)		-		-
Subtotal		5,710,541			-		-
Non-controlling interest		(1,466,541	)		-		-
Total purchase price		4,244,000			-		-
Less: Cash acquired		(14,408	)		-		-
Less: Cash paid to acquire 74%
Muscle Maker Brands, LLC		(3,555,592	)		-		-
Non-cash consideration to seller	$	674,000		$	-	$	-
Non-cash consideration consisted of:
Common stock issued to acquire Muscle Maker Brands, LLC	$	(70,000	)	$	-	$	-
Note payable to seller		(604,000	)		-		-
Total non-cash consideration	$	(674,000	)	$	-	$	-

See Notes to the Consolidated Financial Statements

F-7

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

	Successor			Predecessor
	For the period			For the period
	January 23,			January 1,		For the
	through			through		Year Ended
	December 31, 2015			January 22, 2015		December 31, 2014
Supplemental non-cash investing and financing activity - acquisition of 70% Custom Technology, Inc.
Assets acquired and liabilities assumed:
Inventory	$	2,500		$	-	$	-
Property and equipment, net		5,000			-		-
Goodwill recognized on purchase business combination		62,500			-		-
Intangible asset - non-compete agreement		30,000			-		-
Subtotal		100,000			-		-
Non-controlling interest		(30,000	)		-		-
Total purchase price		70,000			-		-
Less: Cash paid to acquire 70% of
Custom Technology, Inc.		(70,000	)		-		-
Non-cash consideration to seller	$	-		$	-	$	-
Supplemental non-cash investing and financing activity- acquisition of a restaurant in Springfield, NJ
Assets acquired and liabilities assumed:
Property and equipment, net	$	8,670		$	-	$	-
Goodwill recognized on purchase business combination		21,390			-		-
Total purchase price		30,060			-		-
Less: Cash paid to acquire a restaurant in Springfield, NJ		(12,000	)		-		-
Non-cash consideration to seller	$	18,060		$	-	$	-

See Notes to the Consolidated Financial Statements

F-8

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF OPERATIONS

Organization and Operations

Muscle Maker, Inc. (“MMI”), a subsidiary of American Restaurant Holdings (“ARH” or the “Parent”), was incorporated in California on December 8, 2014, and is a majority owner of Muscle Maker Brands, LLC, (“MMB”). MMB’s subsidiaries include Company owned restaurants as well as Custom Technology, Inc, (“CTI”) a technology and point of sale (“POS”) systems dealer and technology consultant. (MMI together with MMB and its subsidiaries is the “Company”). MMB was formed on December 22, 2014 in the state of California for the purpose of acquiring and operating company owned restaurants, as well as franchising its name and business system to qualified franchisees. Muscle Maker Franchising, LLC (“MMF”) was founded in 1995 in order to develop a brand of healthy-option fast food restaurants.

On January 23, 2015 (the “Closing Date”), MMI, MMB and MMF entered into an agreement whereby MMB purchased substantially all of the assets and liabilities of MMF, MMI acquired 74% of the membership units of MMB, and certain members of MMF acquired 26% of the membership units of MMB.

On May 4, 2015, MMB acquired a business in Springfield, New Jersey, as a Company owned restaurant.

On August 1, 2015, the Company acquired 70% of the shares of CTI. CTI was formed on July 29, 2015 and entered into an asset purchase on August 1, 2015 pursuant to which CTI purchased POS computer systems, cash registers, camera systems and related inventory and supplies.

The Company’s financial statement presentation distinguishes a “Predecessor” for the periods prior to the Closing Date and a “Successor” for the periods following the Closing Date. The operating results of MMF and its subsidiary, MMF Colonia (“Colonia”) for the period January 1, 2015 through January 22, 2015 and as of and for the year ended December 31, 2014 are presented in the Predecessor period in the accompanying consolidated financial statements. The operating results of the Company as of December 31, 2015 and for the period from January 23, 2015 through December 31, 2015 are presented in the Successor period in the accompanying consolidated financial statements.

The Company operates under the name Muscle Maker Grill, and is a franchisor and owner operator of Muscle Maker Grill restaurants. As of December 31, 2015, the Company’s restaurant system included two Company-owned restaurants, and 46 franchised restaurants. A Muscle Maker Grill restaurant offers quality food freshly prepared with the Company’s proprietary recipes created with the guest’s health in mind. The menu is protein based, and also features various supplements, health food snacks, along with a nutritious children’s menu.

F-9

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 2 - GOING CONCERN AND MANAGEMENT’S PLANS

As of December 31, 2015, the Company had a cash balance, a working capital deficiency and an accumulated deficit of $409,563, $61,507, and $732,057, respectively. For the period ended January 23, through December 31, 2015, the Company incurred a pre-tax net loss of $839,530. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.

During the Successor period, the Company’s operations have primarily been funded through proceeds from the Parent in exchange for equity and debt. In fact, subsequent to December 31, 2015, the Company received an aggregate of $3,602,791 associated with the issuances of convertible promissory notes payable and warrants to ARH, and these notes were eventually converted into common stock. Although management believes that the Company has access to capital resources, there are no commitments in place for new financing as of the filing date of this Form 1-A and there can be no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. The Company expects to have ongoing needs for working capital in order to (a) fund operations; plus (b) expand operations by opening additional corporate-owned restaurants. To that end, the Company may be required to raise additional funds through equity or debt financing. However, there can be no assurance that the Company will be successful in securing additional capital. If the Company is unsuccessful, the Company may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund its liabilities, or (d) seek protection from creditors.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

F-10

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

The Predecessor’s significant accounting policies are substantially the same as those of the Company presented below.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Any inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates include:

● the fair value of assets acquired and liabilities assumed in a business combination;

● the assessment of recoverability of long lived assets, including property and equipment, goodwill and intangible assets, income taxes and reserves;

● the estimated useful lives of intangible and depreciable assets;

● the recognition of revenue; and

● the recognition, measurement and valuation of current and deferred income taxes.

Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

Cash, Restricted Cash and Cash Equivalents.

The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of December 31, 2015 or 2014.

As of December 31, 2015 and 2014, restricted cash includes cash reserved for gift card programs and advertising funds.

F-11

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Inventory

Inventories, which are stated at the lower of cost or market, consist primarily of perishable food items and supplies. Cost is determined using the first-in, first out method.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. Depreciation and amortization are calculated on the straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term of the related asset. The estimated useful lives are as follows:

Furniture and Equipment	5 - 7 years
Leasehold improvements	2.5 years

Intangible Assets

The Company accounts for recorded intangible assets in accordance with ASC 350 “Intangibles - Goodwill and Other”. In accordance with ASC 350, the Company does not amortize intangible assets having indefinite useful lives. The Company’s goodwill and trademarks are deemed to have indefinite lives, and accordingly are not amortized, but are evaluated for impairment at least annually, or more often whenever changes in facts and circumstances may indicate that the carrying value may not be recoverable. The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment.

When testing goodwill for impairment, the Company may assess qualitative factors for some or all of our reporting units to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this qualitative assessment for some or all of our reporting units and perform a detailed quantitative test of impairment (step 1). If the Company performs the detailed quantitative impairment test and the carrying amount of the reporting unit exceeds its fair value, the Company would perform an analysis (step 2) to measure such impairment. In 2015, the Company first performed a qualitative assessment to identify and evaluate events and circumstances to conclude whether it is more likely than not that the fair value of the Company’s reporting units are less than its carrying amounts. Based on the Company’s qualitative assessments, the Company concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of the reporting units exceeded their carrying values and no impairments were identified.

Other intangible assets include franchise agreements and a non-compete agreement which are amortized on a straight-line basis over their estimated useful lives of 13 years and 5 years, respectively.

The Company reviews the carrying value of its amortizable intangibles for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset or asset group to the undiscounted cash flows that the asset or asset group is expected to generate. If the undiscounted cash flows of such assets are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group, if any, exceeds its fair market value. No impairment was deemed to exist as of December 31, 2015.

Impairment of Long Lived Assets

When circumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, the Company performs an analysis to review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cash flows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such as expected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors. If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognized to the extent that the carrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses, which reduce net income. There were no impairments of long-lived assets as of December 31, 2015 and 2014.

F-12

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Revenue Recognition

In accordance with the Accounting Standard Codification Topic 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four criteria are met: (1) delivery has occurred or services rendered; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.

Restaurant Sales

Retail store revenue at company operated restaurants are recognized when payment is tendered at the point of sale, net of sales tax and other sales related taxes.

Royalties and Franchise Fees

Revenue principally consists of royalties and franchise fees. Royalties are based on a percentage of franchisee revenue. Initial franchise fees are recognized upon opening of a restaurant or granting of a new franchise term, which is when Company has performed substantially all material obligations and initial services required by the franchise agreement. The Company recognizes renewal fees in income when a renewal agreement becomes effective.

Other Revenues

The Company has supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to the Company based upon the dollar volume of purchases for all Company owned and franchised restaurants from these vendors. Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made. The Company recorded revenue from rebates of $384,044 and $21,653 during the periods from January 23 through December 31, 2015 and January 1 through January 22, 2015, respectively, and recorded revenue from rebates of $505,905 during the year ended December 31, 2014.

Through its subsidiary CTI, the Company derives revenue from the sale of POS computer systems, cash registers and camera systems, and from the provision of related consulting and support services, which generally include implementation, installation and training services. We recognize revenue when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the fee is fixed or determinable and collectability is reasonably assured. The Company recorded $228,148 of revenue from these technology sales and services during the period from January 23 through December 31, 2015. No technology revenue was recorded during the period from January 1 through December 31, 2015 or during the year ended December 31, 2014.

F-13

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Net Loss per Share

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of potential common shares, if dilutive, resulting from the exercise of warrants, from the conversion of convertible debt and from the conversion of MMB membership units which were obtained by the non-controlling interest in connection with the acquisition of MMB and are convertible into shares of common stock of MMI (See Note 4 – Acquisition - Acquisition of 74% of MMB).

The following securities are excluded from the calculation of weighted average dilutive common shares at December 31, 2015, because their inclusion would have been anti-dilutive:

Warrants	625,000
Convertible debt	2,165,240
MMB membership units	14,475,676
Total potentially dilutive shares	17,265,916

Deferred Revenue

Deferred revenue consists of initial franchise fees received by the Company, for which the restaurant has not yet opened. The Company collects initial franchise fees when franchise agreements are signed and recognizes the initial franchise fees as revenue when the store is opened, which is when the Company has performed substantially all initial services required by the franchise agreement.

Concentration of Credit Risk

The Company is subject to credit risk through its loans receivable consisting primarily of amounts due from franchisees. The financial condition of these franchisees is largely dependent upon the underlying business trends of our brand and market conditions within the quick service restaurant industry. At December 31, 2015, two franchisees accounted for 20% and 15%, respectively, of loans receivable, and at December 31, 2014, one franchisee accounted for 16% of loans receivable. At December 31, 2015 and 2014, a loan to a consultant, who is also a stockholder of CTI, accounted for 48% and 23%, respectively, of loans receivable and at December 31, 2014, a loan to a member of MMF in the amount of $28,576 accounted for 32% of loans receivable, and was subsequently deemed uncollectible and written off during the period from January 1 through January 22, 2015.

Controlling and Non-Controlling Interest

As a result of the MMB Acquisition on January 23, 2015, MMI acquired a controlling interest of 74% of the membership units of MMB for an aggregate purchase price of $4,244,000 and certain members of MMF acquired 26% of the membership units of MMB, valued at $1,466,541, which is recorded as non-controlling interest (the “MMB Non-Controlling Interest”). (See Note 4 – Acquisitions – Acquisition of 74% of MMB.)

As a result of the CTI acquisition on August 1, 2015, MMI acquired a 70% controlling interest in CTI for an aggregate purchase price of $70,000. The ownership interest of the other investor in CTI is recorded as a non-controlling interest in the amount of $30,000 (the “CTI Non-Controlling Interest”). (See Note 4 – Acquisitions – CTI Acquisition).

The profits and losses of CTI are allocated among the controlling interest and the CTI Non-Controlling Interest in the same proportions as their membership interests. All of the profits and losses of MMB and its subsidiaries are allocated among the controlling interest and MMB Non-Controlling Interest in proportion to the ownership interests, after adjusting for the amount profits and losses attributable to the CTI Non-Controlling Interest.

F-14

MUSCLE MAKER INC. AND SUBSIDIARIES

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Income Taxes

The Company accounts for income taxes under Accounting Standards Codification (“ASC”) 740 Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Tax benefits claimed or expected to be claimed on a tax return are recorded in the Company’s financial statements. A tax benefit from an uncertain tax position is only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Uncertain tax positions have had no impact on the Company’s financial condition, results of operations or cash flows. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the consolidated statements of operations.

F-15

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 - Revenue Recognition and most industry-specific guidance throughout the ASC. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. To allow entities additional time to implement systems, gather data and resolve implementation questions, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, in August 2015, to defer the effective date of ASU No. 2014-09 for one year, which is fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its financial statements or disclosures. In addition, the FASB issued ASU 2016-08 in March 2016, to help provide interpretive clarifications on the new guidance in ASC Topic 606. The Company is currently evaluating the accounting, transition, and disclosure requirements of the standard to determine the impact, if any, on its financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 explicitly requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist which raise substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and annual and interim periods thereafter, with early adoption permitted. The Company early-adopted ASU 2014-15. The adoption of this standard did not have a material impact on the Company’s financial statement disclosures.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” (“ASU 2015-11”). ASU 2015-11 amends the existing guidance to require that inventory should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out or the retail inventory method. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the effects of ASU 2015–11 on its financial statements.

F-16

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Recent Accounting Pronouncements, continued

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). The FASB issued ASU 2015-17 as part of its ongoing Simplification Initiative, with the objective of reducing complexity in accounting standards. The amendments in ASU 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. This guidance does not change the offsetting requirements for deferred tax liabilities and assets, which results in the presentation of one amount on the balance sheet. Additionally, the amendments in ASU 2015-17 align the deferred income tax presentation with the requirements in International Accounting Standards (IAS) 1, Presentation of Financial Statements. The amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company early adopted ASU 2015-17 and the adoption of ASU 2015-17 did not have a material impact on its financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. ASU 2016-02 will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its financial statements.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers - Principal versus Agent Considerations.” This update provides clarifying guidance regarding the application of ASU No. 2014-09 - Revenue From Contracts with Customers when another party, along with the reporting entity, is involved in providing a good or a service to a customer. In these circumstances, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The amendments in the Update clarify the implementation guidance on principal versus agent considerations. The update is effective, along with ASU 2014-09, for annual and interim periods beginning after December 15, 2017. The Company is currently evaluating ASU 2016-08 and its impact on our financial statement and disclosures.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718)” (“ASU 2016-09”). ASU 2016-09 requires an entity to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating ASU 2016-09 and its impact on its consolidated financial statements or disclosures.

F-17

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Recent Accounting Pronouncements - continued

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing.” ASU No. 2016-10 maintains the core principles of Topic 606 on revenue recognition, but clarifies identification of performance obligations and licensing implementation guidance. The amendments in ASU 2016-10 affect the guidance of ASU 2014-09 which is not yet effective. The Company will evaluate the effects, if any, that adoption of this guidance will have on its financial statements.

On May 9, 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2016-12”). ASU 2016-12 provides clarifying guidance in a few narrow areas and adds some practical expedients to the guidance. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements for ASU 2014-09. The Company is evaluating the effect of ASU 2014-09, if any, on its financial statements.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (230) – Restricted Cash.” ASU No. 2016-18 requires an entity to include amounts described as restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2018. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.

In December 2016, the FASB issued ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” ASU No. 2016-20 amends certain aspects of ASU No. 2014-09 and clarifies, rather than changes, the core revenue recognition principles in ASU No. 2014-09. It is effective for annual reporting periods beginning after December 15, 2018. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.

Subsequent Events

The Company evaluated events that have occurred after the balance sheet date through March 30, 2017, the date the financial statements are available to be issued. Based upon the evaluation and transactions, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 16.

F-18

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 4 – ACQUISITIONS

Acquisition of 74% of MMB

On January 23, 2015, MMI, MMB and MMF entered into a Unit Purchase Agreement whereby MMB purchased substantially all of the assets and liabilities of MMF, MMI acquired 74% of the membership units of MMB, and certain members of MMF acquired 26% of the membership units of MMB (the “MMB Acquisition”). The MMB acquisition allows the Company to take advantage of significant growth opportunities in the fast casual restaurant market. The aggregate purchase consideration for MMI’s membership interest in MMB was $4,244,000 and consisted of $3,570,000 in cash, $604,000 of promissory notes (see Note 11 – Notes Payable) and 500,000 shares of common stock of MMI valued at $0.14 per share or $70,000 issued (see Note 15 – Equity). On January 23, 2015, ARH provided cash of $3,645,000 in exchange for shares of MMI common stock in order to facilitate the MMB acquisition (See Note 15 – Equity). Pursuant to the terms of the Unit Purchase Agreement, certain members of MMF shall convert their non-controlling interest in MMB into an aggregate of 14,475,676 shares of MMI common stock prior to the Company going public.

The following presents a summary of the purchase price consideration for the purchase of 74% of MMB:

Cash	$	3,570,000
Promissory notes		604,000
Value of common stock issued		70,000
Total Purchase Price Consideration	$	4,244,000

The following details the allocation of the purchase price for the acquisition of 74% of MMB:

	Fair Value
Cash	$	14,408
Accounts receivable, net		973
Inventory		8,599
Loans receivable		41,064
Loans receivable - related party		20,000
Property and equipment, net		30,376
Security deposits and other assets		4,364
Intangible asset - trademark		2,524,000
Intangible asset - franchise agreements		1,360,000
Accounts payable and accrued expenses		(12,320	)
Deferred revenue		(718,501	)
Net fair value assigned to assets acquired and liabilities assumed		3,272,963
Goodwill		2,437,578
Subtotal		5,710,541
Non-controlling interest		(1,466,541	)
Total	$	4,244,000

The fair value of the trademark was determined using the “relief-from-royalty” method of income approach. The fair value of franchise agreements was determined using an income approach, discounted cash flow analysis. The purchase price in excess of the tangible and identifiable intangible assets acquired less liabilities assumed is recognized as goodwill.

The goodwill recognized in connection with the MMB Acquisition is not deductible for income tax purposes.

F-19

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 4 – ACQUISITIONS, continued

Acquisition of 74% of MMB, continued

The following details amortization periods for the identifiable intangible assets:

Intangible Asset Category	Amortization Period
Franchise agreements	13 years
Trademarks - not subject to amortization	-

Springfield Acquisition

On May 4, 2015, MMB acquired a business in Springfield, New Jersey, as a corporate store (the “Springfield Acquisition”). The purchase price of the store was $30,060, of which $8,670 related to equipment purchased and the remaining $21,390 was accounted for as goodwill. The financial results of Springfield prior to the acquisition are deemed to be not material to the Company’s consolidated financial statements.

CTI Acquisition

CTI was formed on July 29, 2015. On August 1, 2015, MMB acquired 70% of the shares of CTI in exchange for $70,000 in cash (the “CTI Acquisition”).

The following details the allocation of the purchase price for the acquisition of 70% of CTI:

	Fair Value
Inventory	$	2,500
Property and equipment, net		5,000
Intangible asset - non-compete agreement		30,000
Net fair value assigned to assets acquired and liabilities assumed		37,500
Goodwill		62,500
Subtotal		100,000
Non-controlling interest		30,000
Total	$	70,000
Cash	$	70,000
Total Purchase Price Consideration	$	70,000

F-20

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 5 - LOANS RECEIVABLE

At December 31, 2015 and 2014, the Company’s loans receivable consists of the following:

	Successor			Predecessor
	December 31, 2015			December 31, 2014
Loans to franchisees	$	98,358		$	39,964
Less: current portion		(67,755	)		(22,143	)
Loans receivable, non-current	$	30,603		$	17,821

The Company has loans receivable from franchisees totaling, in the aggregate, $98,358 and $39,964 at December 31, 2015 and 2014, respectively. The loans have original terms ranging from 6 months to 4.5 years, earn interest at rates ranging from 0% to 5%, and are paid on a weekly or monthly basis.

NOTE 6 - LOANS RECEIVABLE FROM RELATED PARTIES

At December 31, 2015 and 2014, the Company’s loans receivable from related parties consist of the following:

	Successor			Predecessor
	December 31, 2015			December 31, 2014
Loan to member of MMF	$	-		$	28,576
Loan to COO of CTI		91,667			20,000
Loans to related parties		91,667			48,576
Less: current portion		(20,000	)		(48,576	)
Loan receivable from related parties, non-current	$	71,667		$	-

At December 31, 2014, the Company had a loan balance of $28,576 receivable from a member of MMF. The loan was subsequently deemed uncollectible and was written off prior to January 22, 2015.

On August 1, 2015, the Company provided an advance of $100,000 to the current Chief Operating Officer (the “COO”) of CTI, who is also a stockholder of CTI, pursuant to a consulting agreement. The loan will be repaid in 60 equal monthly installments of $1,667 per month (See Note 14 - Commitments and Contingencies – Consulting Agreement).

F-21

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 7 – RECEIVABLE FROM PARENT

The amount receivable from Parent, current portion, consists of the Parent’s obligation to pay promissory notes issued in connection with the acquisition. These promissory notes were paid down at various dates through July 2016. (See Note 11 – Notes Payable).

The receivable from Parent - non-current consists of advances to the Parent during the year. Management does not expect repayment of these advances within the next twelve months.

NOTE 8 – PROPERTY AND EQUIPMENT, NET

As of December 31, 2015 and 2014, respectively, property and equipment consists of the following:

	Successor			Predecessor
	December 31, 2015			December 31, 2014
Furniture and equipment	$	75,566		$	266,802
Leasehold improvements		30,000			-
		105,566			266,802
Less: accumulated depreciation and amortization		(16,766	)		(224,479	)
Property and equipment, net	$	88,800		$	42,323

Depreciation and amortization expense amounted to $16,766 for the period January 23, through December 31, 2015, and $3,363 for the period January 1, through January 22, 2015. Depreciation and amortization expense amounted to $52,326 for the year ended December 31, 2014.

NOTE 9 – GOODWILL

On January 23, 2015, MMI recorded goodwill of $2,437,578 in connection with the MMB Acquisition, on August 1, 2015 the Company recorded goodwill of $62,500 in connection with the CTI Acquisition, and on May 4, 2015, the Company recorded goodwill of $21,390 in connection with the Springfield Acquisition. As of December 31, 2015, the carrying value of goodwill was $2,521,468 (see Note 4 – Acquisitions).

There was no goodwill as of December 31, 2014.

F-22

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 10 – INTANGIBLE ASSETS, NET

The Company’s intangible assets include a trademark with an indefinite useful life as well as franchise agreements and a non-compete agreement, which are amortized over useful lives of thirteen years and five years, respectively.

A summary of the intangible assets is presented below:

Intangible Assets - Successor	Trademark		Franchise Agreements			Non-Complete Agreement			Total
Balance at January 23, 2015	$	-	$	-		$	-		$	-
MMB acquisition		2,524,000		1,360,000						3,884,000
Purchase of non-compete agreement		-		-			30,000			30,000
Subtotal		2,524,000		1,360,000			30,000			3,914,000
Less accumulated amortization		-		(97,961	)		(2,545	)		(100,506	)
Intangible assets, net	$	2,524,000	$	1,262,039		$	27,455		$	3,813,494
Weighted average remaining amortization period at December 31, 2015 (in years)				12.1 years			4.6 years

There were no intangible assets as of December 31, 2014.

During the period from January 23 through December 31, 2015, amortization expense of $100,506 was charged to depreciation and amortization in the accompanying statement of operations.

The estimated future amortization expense is as follows:

For the Year Ended December 31,	Franchise Agreements		Non-Compete Agreement		Total
2016	$	104,835	$	5,993	$	110,828
2017		104,549		5,993		110,542
2018		104,549		5,993		110,542
2019		104,549		5,993		110,542
2020		104,836		3,483		108,319
Thereafter		738,721		-		738,721
	$	1,262,039	$	27,455	$	1,289,494

F-23

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 11 – NOTES PAYABLE

The following is a summary of notes payable at December 31, 2015 and 2014:

	Successor		Predecessor
	December 31, 2015		December 31, 2014
Predecessor Note	$	-	$	376,912
Note I		300,000		-
Springfield Note		8,100		-
	$	308,100	$	376,912

During 2013 the MMF entered into a promissory note payable (the “Predecessor Note”) in exchange for the membership interest of a former member of MMF. The Predecessor Note bore interest at 0.95% per annum and principal and interest were payable in monthly installments of $10,073 through January 31, 2018. The Company recognized interest of $3,857 during the year ended December 31, 2014 related to this note payable. MMF settled the Predecessor Note in January 2015, in connection with the MMB Acquisition.

On January 23, 2015, in connection with the MMB Acquisition (see Note 4 – Acquisitions), MMI issued two promissory notes payable in the amount of $400,000 (“Note I”) and $204,000 (“Note II”), respectively. Note I includes interest imputed at the rate of 0.41% per annum and is payable in three installments with the final installment due eighteen months after the closing date of the MMB acquisition. Note II was secured by the assets of the Company-owned store in Colonia, New Jersey. Note II bore no stated interest and was due on March 9, 2015. In connection with MMB acquisition on January 23, 2015, MMI issued 5,757,120 shares of its common stock to the Parent, in exchange for the Parent’s obligation to repay the promissory notes in full.

On March 9, 2015, the Parent repaid Note II in full. On July 21, 2015, January 23, 2016 and July 23, 2016, installments of $100,000, $150,000 and $150,000 were repaid on the balance of Note I by the Parent. As of July 23, 2016, there is no balance outstanding related to Note I.

On May 4, 2015, in connection with the Springfield Acquisition (see Note 4 – Acquisitions), MMB entered into a note payable in the amount of $18,060 (the “Springfield Note”). The Company made payments on the Springfield Note totaling $9,960 during 2015, resulting in a principal balance of $8,100 at December 31, 2015. The remaining principal balance on the Springfield Note was repaid during the first six months of 2016.

F-24

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 12 – CONVERTIBLE NOTE PAYABLE TO PARENT

On December 31, 2015, MMI issued a promissory note in the amount of $1,082,620 (the “2015 ARH Note”) to the Parent which owns a majority of the outstanding common stock of the Company at December 31, 2015. The 2015 ARH Note has no stated interest rate or maturity date. The note is convertible into 2,165,240 shares of the Company’s stock at $0.50 per share. The fair value of the Company’s common stock on the date the note was issued was $0.60 per share, creating an intrinsic value of $0.10 per share. In accordance with ASC 470 “Debt with Conversion and other Options”, the intrinsic value results in a beneficial conversion feature which is recorded as a debt discount with a corresponding credit to additional paid in capital. The Company recorded a debt discount of $216,524 related to the beneficial conversion feature on the 2015 ARH Note. The 2015 ARH Note was converted to common stock on March 14, 2017 (see Note 16 – Subsequent Events).

NOTE 13 – INCOME TAXES

For 2014, MMF was a limited liability company that was treated as a partnership for income tax purposes and therefore it did not incur income taxes. Instead, MMF’s earnings and losses were included in the income tax returns of the members. Therefore, no provision or liability for 2014 federal or state income taxes has been included in these consolidated financial statements.

In the Successor period, MMI is a corporation which is subject to income taxes. However, a significant subsidiary of MMI, MMB with a non-controlling interest, is treated as a partnership for income tax purposes and therefore the non-controlling interest component is not subject to U.S. federal, state or local income taxes. The remaining consolidated entities are corporations and, therefore, are subject to U.S. federal, state, and local corporate income tax. MMB’s acquisition of MMF (See Note 4) was treated as an asset acquisition for tax purposes, resulting in the tax basis of the assets acquired being stepped-up to the fair value at the date of acquisition.

The Company early adopted ASU No. 2015-17 which requires the Company to classify all deferred tax assets as non-current amounts.

The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2015 are presented below:

	Successor
	December 31, 2015
Deferred tax assets:
Net operating loss carryforwards	$	414,198
Valuation allowance		(414,198	)
Net deferred tax asset		-
Deferred tax liabilities:
Intangible assets		(119,245	)
Net deferred tax liability	$	(119,245	)

F-25

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 13 – INCOME TAXES, continued

The income tax provision for the period January 23 through December 31, 2015, consists of the following:

	Successor
	For the period January 23, through December 31, 2015
Federal:
Current	$	-
Deferred		(101,358	)
State and local:
Current		-
Deferred		(17,887	)
Income tax provision	$	(119,245	)

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the period January 23 through December 31, 2015, is as follows:

	Successor
	For the period January 23, through December 31, 2015
Federal income tax benefit at statutory rate		34.0	%
State income tax benefit, net of federal impact		6.0	%
Income passed through to non-controlling interests		(11.1	)%
Change in valuation allowance		(43.1	)%
Effective income tax rate		(14.2	)%

F-26

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 13 – INCOME TAXES, continued

At December 31, 2015, the Company had approximately $1,042,000 and $998,000, respectively, of federal and state net operating losses that may be available to offset future taxable income. The net operating loss carry forwards, if not utilized, will expire from 2020 to 2035 for federal purposes. In accordance with Section 382 of the Internal Revenue Code, the usage of the Company’s net operating loss carry forwards could be subject to annual limitations if there have been greater than 50% ownership changes.

The Company has filed income tax returns in the U.S. federal jurisdiction and the states of California, New Jersey and New York. The Company’s tax return filed for 2015 remains subject to examination.

NOTE 14 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases office space in Colonia, New Jersey. The lease has a five-year term ending September 30, 2016, with a renewal option at the end of the term. Rent for the remaining term of the lease is $2,182 per month.

The Company leases restaurant space in Colonia, New Jersey. The lease has a five-year term ending October 31, 2016, with a renewal option at the end of the term. Rent for the remaining term of the lease is $1,781 per month. On July 18, 2016, the Colonia lease was renewed and extended through October 31, 2018. Under the terms of the extended lease agreement, rent expense is increased to $1,828, per month from November 1, 2016 through October 31, 2017 and $1,875 per month from November 1, 2017 through October 31, 2018.

The Company leases restaurant space in Springfield, New Jersey, pursuant to an operating lease dated December 31, 2002, as amended on March 17, 2009. The lease expires on December 31, 2017. Rent expense pursuant to the Springfield lease is $3,100 per month.

On September 18, 2015, the Company entered into a lease agreement for office space in Houston, Texas which expires on September 30, 2020. Current rent expense related the Houston lease is $3,637 per month.

On September 30, 2015, the Company entered into a lease agreement for restaurant space in Santa Ana, California which expires on October 31, 2020. Current rent expense related to the Santa Ana lease is $7,842 per month.

F-27

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 14 – COMMITMENTS AND CONTINGENCIES, continued

Operating Leases, continued

On December 1, 2015, the Company entered into a lease agreement for restaurant space in Irvine, California which expires on February 28, 2021. Current rent expense related to the Irvine Lease is $3,380 per month.

On December 7, 2015, the Company entered into a lease agreement for restaurant space in New York City, NY (the “Columbia Lease”) which expires on December 31, 2025. Current rent expense related to the Columbia Lease is $11,750 per month.

On December 24, 2015, the Company entered into a lease agreement for restaurant space in Fort Bliss, Texas which expires on December 31, 2025. Current rent expense related to the Fort Bliss lease is $6,302 per month.

On December 30, 2015, the Company entered into a lease agreement for restaurant space in New York City, NY (the “Gramercy Lease”) which expires on December 31, 2025. Current rent expense related to the Columbia Lease is $10,500 per month.

The Company has recorded security deposits, totaling, in the aggregate, approximately $102,000 and $4,300 as of December 31, 2015 and 2014, respectively, related to the above-mentioned leases.

Future aggregate minimum lease payments for these leases as of December 31, 2015 are:

For the Year Ended December 31,	Amount
2016	$	512,657
2017		569,161
2018		545,433
2019		560,227
2020		539,906
Thereafter		2,069,583
	$	4,796,967

Total rent expense was $86,738 for the period January 23, through December 31, 2015, and $3,275 for the period January 1, through January 22, 2015. Total rent expense was $51,807 for the year ended December 31, 2014. The Company has determined that the effect of recording rent on a straight-line basis during the periods would be immaterial to the consolidated financial statements.

F-28

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 14 – COMMITMENTS AND CONTINGENCIES, continued

Employment Agreements

On January 23, 2015, the Company entered into an employment agreement (the “COO Agreement”) with its Chief Operations Officer (the “COO”). The COO Agreement provides for a base salary of $22,500 per month and performance based bonuses, as well as standard employee insurance and other benefits as defined in the COO Agreement. The COO Agreement expired on January 23, 2017.

On January 23, 2015, the Company entered into an employment agreement (the “DBD Agreement”) with its Director of Brand Development (the “DBD”). The DBD Agreement provides for a base salary of $12,500 per month and performance based bonuses, as well as standard employee insurance and other benefits as defined in the DBD Agreement. Upon the execution of the DBD Agreement, the DBD received 200,000 shares of immediately vested Company common stock valued at $0.14 per share or $28,000 (see Note 15 - Equity). The DBD Agreement expired on January 23, 2017.

Consulting Agreement

On August 1, 2015, the Company entered into a consulting agreement (the “Consulting Agreement) with an officer of CTI, who is also a stockholder of CTI, (the “Consultant”). The Consulting Agreement has a term of five years, and automatically extends for successive one-year periods, unless either party provides written notice of termination at least 60 days prior to the end of the term. Pursuant to the terms of the agreement, the Consultant will receive a base fee of $11,667 per month. In connection with the agreement, the Company provided a $100,000 advance to the consultant, to be repaid in equal monthly installments of $1,667, over the term of the consulting agreement. (See Note 6 – Loans Receivable from Related Parties)

Litigations, Claims and Assessments

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management, such matters are currently not expected to have a material impact on the Company’s financial statements.

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

F-29

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 15 – EQUITY

Common Stock

On December 22, 2014, MMI issued 100,000 shares of its common stock to the Chief Executive Officer of ARH as founder shares for cash proceeds of $10.

On January 23, 2015, in connection with original capitalization of the Company, MMI issued 40,500,000 shares of its common stock to ARH in exchange for cash of $3,645,000 and an obligation to repay an aggregate of $604,000 of principal due under Note I and Note II issued to MMF in connection with the acquisition of 74% of MMB.

On January 23, 2015, MMI issued 500,000 shares of common stock valued at $0.14 per share, or an aggregate of $70,000, to former members of MMF, in connection with the acquisition of 74% of MMB. (See Note 4 – Acquisitions).

On January 24, 2015, MMI granted 200,000 shares of its common stock valued at $0.14 per share to its Director of Brand Development, in connection with the DBD Agreement. The shares vested immediately and MMI recorded stock based compensation of $28,000 in connection with issuance of these shares (see Note 14 – Commitments and Contingencies, Employment Agreements).

On January 24, 2015, the Company issued 428,571 shares of its common stock to the Director of Brand Development in exchange for cash proceeds of $0.14 per share, or $60,000.

On July 23, 2015 and August 28, 2015, the Company issued 750,000 and 500,000 shares of its common stock, and 5-year warrants for the purchase of 375,000 and 250,000 shares of common stock respectively, for aggregate cash proceeds of $750,000. The warrants are exercisable at $0.75 per share.

F-30

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 16 – SUBSEQUENT EVENTS

Operating Leases

On July 21, 2016, the Company entered into a lease agreement for restaurant space in Fountain Valley, California. The lease has a five-year term, with two option terms of sixty months each, and expires five years after the commencement date, defined as the date the restaurant officially opens for business. The rent expense related to the Fountain Valley lease for the first year is $6,494 per month, or $77,922 annually. As of the date of filing, the restaurant had not been opened.

On September 1, 2016, the Company entered into a lease agreement for restaurant space in New York City, New York (the “Upper East Side Lease”). The lease has a ten-year term, and expires on August 31, 2026. The current rent expense related to the Upper East Side Lease is $9,650 per month, or $115,800 annually. The landlord is holding a $28,950 security deposit related to the Upper East Side Lease.

On September 21, 2016, the Company entered into an amendment of its lease agreement for office space in Colonia, New Jersey. The lease has a six-month term, and is renewable on a rolling six-month basis through September 30, 2021. The rent for the initial term is $2,266 per month, or $13,596 for six months.

On September 30, 2016, the Company assumed a lease agreement for restaurant space in Winston-Salem, North Carolina with three years remaining on the original five-year term. The lease expires on October 1, 2019. The current rent expense related to the Winston-Salem lease is $4,283 per month, or $51,396 annually. The landlord is holding a $4,117 security deposit related to the Winston-Salem lease.

On November 18, 2016, the Company assumed a lease agreement for restaurant space in New York, New York (the “Tribeca Lease”). The Tribeca lease expires on April 30, 2020. The current rent expense related to the Tribeca Lease is $7,525 per month, or $90,295 annually. The landlord is holding a $40,000 security deposit related to the Tribeca Lease, which was assigned to the Company in connection with the assumption of the Tribeca Lease.

New Company Owned Restaurants

Subsequent to December 31, 2015 and through the filing date of this report, the Company opened eight additional Company-owned restaurants.

F-31

MUSCLE MAKER INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

NOTE 16 – SUBSEQUENT EVENTS, continued

Parent Transactions

During the period from January 1 through December 15, 2016, the Parent provided $2,621,842 of advances to the Company. The payable due to the Parent as a result of these advances was exchanged for a convertible promissory note in the amount of $2,621,842 (the ‘2016 ARH Note”). The 2016 ARH Note has no stated interest rate or maturity date and is convertible into shares of MMI’s common stock at a conversion price of $0.40 per share at a time to be determined by the lender. The 2016 ARH Note includes a three-year warrant for the purchase of 2,294,112 shares of MMI’s common stock at an exercise price of $1.00 per share. On March 14, 2017, the Parent elected to convert the 2016 ARH Note into 6,554,604 shares of MMI’s common stock.

During the period from December 31, 2016 through February 15, 2017, the Parent provided $980,949 of advances to the Company. The payable due to the Parent as a result of these advances was exchanged for a convertible promissory note in the amount of $980,949 (the “2017 ARH Note”). The 2017 ARH Note has no stated interest rate or maturity date and is convertible into shares of MMI’s common stock at a conversion price of $0.40 per share at a time to be determined by the lender. The 2017 ARH Note includes a three-year warrant for the purchase of 858,330 shares of MMI’s common stock at an exercise price of $1.00 per share. On March 14, 2017, the Parent elected to convert the 2017 ARH Note into 2,452,373 shares of MMI’s common stock.

On March 14, 2017, the Parent elected to convert the 2015 ARH Note in the principal amount of $1,082,620 into 2,165,240 shares of MMI’s common stock at a conversion price of $0.50 per share.

Equity

On April 21, 2016, the Company granted a three-year warrant for the purchase of 50,000 shares of MMI common stock at an exercise price of $1.00 per share to a franchisee and developer of the Company in exchange for services. The warrant had a grant date value of $3,684.

Spin-Off of MMI by Parent

On March 23, 2017, Parent authorized and facilitated the distribution of 51,672,217 shares of Common Stock of MMI held by American Restaurants, LLC, the wholly owned subsidiary of Parent, to the shareholders of Parent (the “Spin-Off”). As a result of the Spin-Off on March 23, 2017, ARH is no longer a majority owner of MMI.

F-32

MUSCLE MAKER, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Successor)

For the Six Months Ended June 30, 2016

For the Period January 23, through June 30, 2015

(Predecessor)

For the Period January 1, through January 22, 2015

MUSCLE MAKER, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
Condensed Consolidated Balance Sheets as of June 30, 2016 (unaudited) and December 31, 2015 (Successor)	F-33
Unaudited Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2016, for the period January 23, 2015 through June 30, 2015 (Successor periods), and for the period January 1, 2015 though January 22, 2015 (Predecessor period)	F-34
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity for the Six Months Ended June 30, 2016 (Successor period)	F-35
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016, for the period January 23, 2015 through June 30, 2015 (Successor periods) and for the period January 1, 2015 through January 22, 2015 (Predecessor period)	F-36
Notes to Condensed Consolidated Financial Statements	F-39

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

	Successor
	June 30, 2016			December 31, 2015
	(unaudited)
Assets
Current Assets:
Cash	$	648,671		$	409,563
Restricted cash		169,819			189,715
Accounts receivable, net of allowance for doubtful accounts of $4,500 as of June 30 2016 and December 31, 2015		73,115			60,621
Inventory		40,838			14,199
Receivable from Parent		150,000			300,000
Current portion of loans receivable		139,252			67,755
Current portion of loan receivable from related party		20,000			20,000
Prepaid expenses and other current assets		160,652			118,369
Total Current Assets		1,402,347			1,180,222
Property and equipment, net		611,569			88,800
Goodwill		2,521,468			2,521,468
Intangible assets, net		3,758,374			3,813,494
Receivable from Parent		329,907			329,907
Loans receivable - non current		28,463			30,603
Loan receivable from related party - non current		61,667			71,667
Security deposits and other assets		124,818			102,209
Total Assets	$	8,838,613		$	8,138,370
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	304,114		$	93,161
Notes payable		150,000			308,100
Deferred revenue		1,135,856			646,501
Other current liabilities		168,111			193,967
Total Current Liabilities		1,758,081			1,241,729
Convertible note payable to Parent, net of debt discount of $149,647 and $216,524 at June 30, 2016 and December 31, 2015, respectively		932,973			866,096
Payable to Parent, non-current		1,257,000			-
Deferred tax liability		182,886			119,245
Total Liabilities		4,130,940			2,227,070
Commitments and Contingencies
Stockholders' Equity:
Common stock, no par value, 100,000,000 shares authorized, 42,978,571 shares issued and outstanding as of June 30, 2016 and December 31, 2015		5,157,010			5,157,010
Additional paid-in capital		216,524			216,524
Accumulated deficit		(1,632,982	)		(732,057	)
Total Controlling Interest		3,740,552			4,641,477
Non-controlling interest		967,121			1,269,823
Total Stockhold rs' Equity		4,707,673			5,911,300
Total Liabilities and Stockholders' Equity	$	8,838,613		$	8,138,370

See Notes to the Condensed Consolidated Financial Statements

F-33

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Successor						Predecessor
	For the Six			For the Period			For the Period
	Months Ended			January 23, Through			January 1, Through
	June 30, 2016			June 30, 2015			January 22, 2015
Revenues:
Restaurant sales, net of discounts	$	875,566		$	429,328		$	50,868
Franchise royalty revenue		610,761			610,324			62,837
Franchise fees		24,000			138,562			5,500
Other revenues		407,213			184,671			21,653
Total Revenues		1,917,540			1,362,885			140,858
Operating Costs and Expenses:
Food and beverage costs		284,922			131,413			16,188
Depreciation and amortization		84,618			51,208			3,363
Compensation expense		1,223,780			566,863			55,483
General and administrative expenses		1,398,486			655,381			129,751
Total Operating Costs and Expenses		2,991,806			1,404,865			204,785
(Loss) from Operations		(1,074,266	)		(41,980	)		(63,927	)
Other (Expense) Income:
Other income (expense)		315			(1,365	)		1,000
Interest (expense) income, net		(66,035	)		528			61
Total Other (Expense) Income, net		(65,720	)		(837	)		1,061
Net (Loss) Income Before Income Tax		(1,139,986	)		(42,817	)		(62,866	)
Income tax provision		(63,641	)		(54,991	)		-
Net (Loss) Income		(1,203,627	)		(97,808	)		(62,866	)
Net loss attributable to the non-controlling interest		(302,702	)		(11,132	)		-
Net Loss Attributable to Controlling Interest	$	(900,925	)	$	(86,676	)	$	(62,866	)
Net Loss Attributable to Controlling Interest Per Share:
Basic and Diluted	$	(0.02	)	$	(0.00	)
Weighted Average Number of Common Shares Outstanding:
Basic and Diluted		42,978,571			41,443,306

See Notes to the Condensed Consolidated Financial Statements

F-34

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited)

	No Par Common Stock				Additional Paid-in		Accumulated			Total Controlling			Non-Controlling
	Shares		Amount		Capital		Deficit			Interest			Interest			Total
Balance - December 31, 2015		42,978,571	$	5,157,010	$	216,524	$	(732,057	)	$	4,641,477		$	1,269,823		$	5,911,300
Net loss		-		-		-		(900,925	)		(900,925	)		(302,702	)		(1,203,627	)
Balance - June 30, 2016		42,978,571	$	5,157,010	$	216,524	$	(1,632,982	)	$	3,740,552		$	967,121		$	4,707,673

See Notes to the Condensed Consolidated Financial Statements

F-35

MUSCLE MAKER, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Successor						Predecessor
	For the			For the Period			For the Period
	Six Months			January 23,			January 1,
	Ended June 30, 2016			Through June 30, 2015			Through January 22, 2015
Cash Flows from Operating Activities
Net loss	$	(1,203,627	)	$	(97,808	)	$	(62,866	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		84,618			51,208			3,363
Stock based compensation		-			28,000			-
Amortization of debt discount		66,877			-			-
Bad debt expense		3,068			-			28,576
Deferred income tax provision		63,641			54,991			-
Changes in operating assets and liabilities:
Restricted cash		19,896			(194,283	)		(25,858	)
Accounts receivable		(12,494	)		(28,494	)		2,926
Inventory		(26,639	)		1,871			-
Prepaid expenses and other current assets		(42,283	)		(83,022	)		26,368
Accounts payable and accrued expenses		210,953			53,030			(454	)
Deferred revenue		489,355			(60,000	)		(12,000	)
Other current liabilities		(25,856	)		218,394			23,057
Security deposits and other assets		(22,609	)		(10,674	)		-
Total Adjustments		808,527			(31,021	)		45,978
Net Cash Used in Operating Activities		(395,100	)		(66,787	)		(16,888	)
Cash Flows from Investing Activities
Purchases of property and equipment		(552,267	)		(48,402	)		-
Cash paid in connection with the acquisition of MMB, net of cash acquired		-			(3,555,592	)		-
Cash paid in connection with the acquisition of Springfield		-			(12,000	)		-
Issuance of loans receivable		(108,000	)		(7,688	)		(3,182	)
Collections from loans receivable		35,575			15,083			1,600
Collections from loans receivable - related party		10,000			5,455			-
Net Cash Used in Investing Activities		(614,692	)		(3,603,144	)		(1,582	)
Cash Flows from Financing Activities
Issuance of common stock to Parent for cash		-			3,645,000			-
Issuance of common stock for cash		-			60,000			-
Advances from Parent		1,257,000			112,337			-
Proceeds from notes payable		-			-			-
Repayments of notes payable		(8,100	)		(6,000	)		-
Net Cash Provided by Financing Activities		1,248,900			3,811,337			-
Net Increase (Decrease) in Cash		239,108			141,406			(18,470	)
Cash - Beginning of Period		409,563			-			40,319
Cash - End of Period	$	648,671		$	141,406		$	21,849

See Notes to the Condensed Consolidated Financial Statements

F-36

	Successor					Predecessor
	For the		For the Period			For the Period
	Six Months		January 23,			January 1,
	Ended		Through			Through
	June 30, 2016		June 30, 2015			January 22, 2015
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Periods For:
Interest	$	1,797	$	658		$	-
Supplemental disclosures of non-cash investing and financing activities
Issuance of common stock to Parent in exchange for promise to pay note payable	$	-	$	604,000		$	-
Payment on note payable by Parent in exchange for reduction in receivable from Parent	$	150,000	$	204,000		$	-
Supplemental non-cash investing and financing activity - acquisition of 74% Muscle Maker Brands, LLC
Assets acquired and liabilities assumed:
Cash	$	-	$	14,408		$	-
Accounts receivable		-		973			-
Inventory		-		8,599			-
Loans receivable		-		41,064			-
Loans receivable - related party		-		20,000
Property and equipment, net		-		30,376			-
Goodwill		-		2,437,578			-
Intangible asset - trademarks		-		2,524,000			-
Intangible asset - franchise agreements		-		1,360,000			-
Security deposit and other assets		-		4,364			-
Accrued expenses		-		(12,320	)		-
Deferred revenue		-		(718,501	)		-
Subtotal		-		5,710,541			-
Non-controlling interest		-		(1,466,541	)		-
Total purchase price		-		4,244,000			-
Less: Cash acquired		-		(14,408	)		-
Less: Cash paid to acquire 74%
Muscle Maker Brands, LLC		-		(3,555,592	)		-
Non-cash consideration to seller	$	-	$	674,000		$	-
Non-cash consideration consisted of:
Common stock issued to acquire Muscle Maker Brands, LLC	$	-	$	(70,000	)	$	-
Note payable to seller		-		(604,000	)		-
Total non-cash consideration	$	-	$	(674,000	)	$	-

See Notes to the Condensed Consolidated Financial Statements

F-37

	Successor					Predecessor
	For the		For the Period			For the Period
	Six Months		January 23,			January 1,
	Ended		Through			Through
	June 30, 2016		June 30, 2015			January 22, 2015
Supplemental non-cash investing and financing activity - acquisition of a restaurant in Springfield, NJ
Assets acquired and liabilities assumed:
Property and equipment, net	$	-	$	8,670		$	-
Goodwill recognized on purchase business combination		-		21,390			-
Total purchase price		-		30,060			-
Less: Cash paid to acquire a restaurant in Springfield, NJ		-		(12,000	)		-
Non-cash consideration to seller	$	-	$	18,060		$	-

See Notes to the Condensed Consolidated Financial Statements

F-38

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 1 – BUSINESS ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF OPERATIONS

Organization and Operations

Muscle Maker, Inc. (“MMI”), a subsidiary of American Restaurant Holdings (“ARH” or the “Parent”), was incorporated in California on December 8, 2014, and is a majority owner of Muscle Maker Brands, LLC, (“MMB”). MMB’s subsidiaries include Company owned restaurants as well as Custom Technology, Inc. (“CTI”) a technology and point of sale (“POS”) systems dealer and technology consultant. (MMI together with MMB and its subsidiaries is the “Company”). MMB was formed on December 22, 2014 in the state of California for the purpose of acquiring and operating company owned restaurants, as well as franchising its name and business system to qualified franchisees. Muscle Maker Franchising, LLC (“MMF”) was founded in 1995 in order to develop a brand of healthy-option fast food restaurants.

On January 23, 2015 (the “Closing Date”), MMI, MMB and MMF entered into an agreement whereby MMB purchased substantially all of the assets and liabilities of MMF, MMI acquired 74% of the membership units of MMB, and certain members of MMF acquired 26% of the membership units of MMB.

On May 4, 2015, MMB acquired a business in Springfield, New Jersey, as a Company owned restaurant.

On August 1, 2015, the Company acquired 70% of the shares of CTI. CTI was formed on July 29, 2015 and entered into an asset purchase on August 1, 2015 pursuant to which CTI purchased POS computer systems, cash registers, camera systems and related inventory and supplies.

The Company’s financial statement presentation distinguishes a “Predecessor” for the periods prior to the Closing Date and a “Successor” for the periods following the Closing Date. The operating results of MMF and its subsidiary, MMF Colonia (“Colonia”) for the period January 1, 2015 through January 22, 2015 are presented in the Predecessor period in the accompanying condensed consolidated financial statements. The operating results of the Company for the six months ended June 30, 2016 and for the period from January 23, 2015 through June 30, 2015 are presented in the Successor period in the accompanying condensed consolidated financial statements.

The Company operates under the name Muscle Maker Grill, and is a franchisor and owner operator of Muscle Maker Grill restaurants. As of June 30, 2016, the Company’s restaurant system included five Company-owned restaurants, and 43 franchised restaurants. A Muscle Maker Grill restaurant offers quality food freshly prepared with the Company's proprietary recipes created with the guest's health in mind. The menu is protein based, and also features various supplements, health food snacks, along with a nutritious children's menu.

F-39

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 2 - GOING CONCERN AND MANAGEMENT’S PLANS

As of June 30, 2016, the Company had a cash balance, a working capital deficiency and an accumulated deficit of $648,671, $355,734 and $1,632,982, respectively, and incurred pre-tax net losses of $1,139,986 for the six months ended June 30, 2016, and $42,817 and 62,866 for the period from January 23, through June 30, 2015 and the period from January 1 through January 22, 2015, respectively. These conditions indicate that there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing.

During the Successor period, the Company’s operations have primarily been funded through proceeds from the Parent in exchange for equity and debt. Subsequent to June 30, 2016, the Company received an aggregate of $2,345,791 associated with the issuances of convertible promissory notes and warrants to ARH, and these notes were eventually converted into common stock. Although management believes that the Company has access to capital resources, there are no commitments in place for new financing as of the filing date of this Form 1-A and there can be no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. The Company expects to have ongoing needs for working capital in order to (a) fund operations; and (b) expand operations by opening additional corporate-owned restaurants. To that end, the Company may be required to raise additional funds through equity or debt financing. However, there can be no assurance that the Company will be successful in securing additional capital. If the Company is unsuccessful, the Company may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund its liabilities, or (d) seek protection from creditors.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

F-40

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

The Predecessor’s significant accounting policies are substantially the same as those of the Company presented below.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. Any inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates include:

● the fair value of assets acquired and liabilities assumed in a business combination;

● the assessment of recoverability of long lived assets, including property and equipment, goodwill and intangible assets, income taxes and reserves;

● the estimated useful lives of intangible and depreciable assets;

● the recognition of revenue; and

● the recognition, measurement and valuation of current and deferred income taxes.

Estimates and assumptions are periodically reviewed and the effects of any material revisions are reflected in the financial statements in the period that they are determined to be necessary. Actual results could differ from those estimates and assumptions.

F-41

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Cash, Restricted Cash and Cash Equivalents

The Company considers all highly-liquid instruments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of June 30, 2016 and December 31, 2015.

As of June 30, 2016 and December 31, 2015, restricted cash includes cash reserved for gift card programs and advertising funds.

Revenue Recognition

In accordance with the Accounting Standard Codification Topic 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four criteria are met: (1) delivery has occurred or services rendered; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.

Restaurant Sales

Retail store revenue at company operated restaurants are recognized when payment is tendered at the point of sale, net of sales tax and other sales related taxes.

Royalties and Franchise Fees

Revenue principally consists of royalties and franchise fees. Royalties are based on a percentage of franchisee revenue. Initial franchise fees are recognized upon opening of a restaurant or granting of a new franchise term, which is when Company has performed substantially all material obligations and initial services required by the franchise agreement. The Company recognizes renewal fees in income when a renewal agreement becomes effective.

F-42

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Other Revenues

The Company has supply agreements with certain food and beverage vendors. Pursuant to the terms of these agreements, rebates are provided to the Company based upon the dollar volume of purchases for all Company owned and franchised restaurants from these vendors. Rebates earned on purchases by franchise stores are recorded as revenue during the period in which the related food and beverage purchases are made. During the six months ended June 30, 2016 and the periods from January 23 through June 30, 2015 and January 1 through January 22, 2015 and the Company recorded rebate revenues of $172,005, $184,671 and $21,653, respectively.

Through its subsidiary CTI, the Company derives revenue from the sale of POS computer systems, cash registers and camera systems, and from the provision of related consulting and support services, which generally include implementation, installation and training services. We recognize revenue when persuasive evidence of an arrangement exists, delivery of the product or service has occurred, the fee is fixed or determinable and collectability is reasonably assured. Revenues from these technology sales and services were $235,208 for the six months ended June 30, 2016. There were no revenues from technology sales and services during the period January 1 through January 22, 2015 or the period from January 23 through June 30, 2015.

Net Loss per Share

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of potential common shares, if dilutive, resulting from the exercise of warrants, from the conversion of convertible debt and from the conversion of MMB membership units which were obtained by the non-controlling interest in connection with the acquisition of MMB and are convertible into shares of common stock of MMI.

The following securities are excluded from the calculation of weighted average dilutive common shares at June 30, 2016 and 2015, because their inclusion would have been anti-dilutive:

	June 30,
	2016		2015
Warrants		625,000		-
Convertible debt		2,165,240		-
MMB membership units		14,475,676		14,475,676
Total potentially dilutive shares		17,265,916		14,475,676

F-43

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES, continued

Deferred Revenue

Deferred revenue primarily includes initial franchise fees received by the Company, for which the restaurant has not yet opened and customer deposits received in connection with technology sales and services by CTI.

The Company collects initial franchise fees when franchise agreements are signed and recognizes the initial franchise fees as revenue when the store is opened, which is when the Company has performed substantially all initial services required by the franchise agreement. Customer deposits received for technology sales or services are recorded as deferred revenue and recognized when the sale is complete or the service is performed.

Controlling and Non-Controlling Interest

As a result of the MMB Acquisition on January 23, 2015, MMI acquired a controlling interest of 74% of the membership units of MMB for an aggregate purchase price of $4,244,000 and certain members of MMF acquired 26% of the membership units of MMB, valued at $1,466,541, which is recorded as non-controlling interest (the “MMB Non-Controlling Interest”). (See Note 4 – Acquisitions – Acquisition of 74% of MMB.)

As a result of the CTI acquisition on August 1, 2015, MMI acquired a 70% controlling interest in CTI for an aggregate purchase price of $70,000. The ownership interest of the other investor in CTI is recorded as a non-controlling interest in the amount of $30,000 (the “CTI Non-Controlling Interest”). (See Note 4 – Acquisitions – CTI Acquisition).

The profits and losses of CTI are allocated among the controlling interest and the CTI Non-Controlling Interest in the same proportions as their membership interests. All of the profits and losses of MMB and its subsidiaries are allocated among the controlling interest and MMB Non-Controlling Interests in proportion to the ownership interests, after adjusting for the amount profits and losses attributable to the CTI Non-Controlling Interest.

Subsequent Events

The Company evaluated events that have occurred after the balance sheet date through March 30, 2017, the date the financial statements are available to be issued. Based upon the evaluation and transactions, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 12 - Subsequent Events.

F-44

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 4 - LOANS RECEIVABLE

At June 30, 2016 and December 31, 2015, the Company’s loans receivable consists of the following:

	Successor
	June 30, 2016			December 31, 2015
Loans to franchisees	$	167,715		$	98,358
Less: current portion		(139,252	)		(67,755	)
Loans receivable, non-current	$	28,463		$	30,603

The Company’s loans receivable from franchisees have original terms ranging from 6 months to 4.5 years, earn interest at rates ranging from 0% to 5%, and are paid on a weekly or monthly basis.

NOTE 5 - LOAN RECEIVABLE FROM RELATED PARTY

On August 1, 2015, the Company advanced $100,000 to the Chief Operating Officer and stockholder of CTI, pursuant to a consulting agreement. The loan has no stated interest and will be repaid in 60 equal monthly installments. At June 30, 2016 and December 31, 2015, the remaining balance on the this loan receivable is as follows:

	Successor
	For the Six
	Months Ended
	June 30, 2016			December 31, 2015
Loan receivable - related party	$	81,667	$		91,667
Less: current portion		(20,000	)		(20,000	)
Loans receivable from related party, non-current	$	61,667		$	71,667

NOTE 6 – RECEIVABLE FROM PARENT

The amount receivable from Parent, current portion, consists of the Parent’s obligation to pay promissory notes issued in connection with the acquisition These promissory notes were paid down at various dates through July 2016. (See Note 8 – Notes Payable).

The receivable from Parent - non-current consists of advances to the Parent. Management does not expect repayment of these advances within the next twelve months

F-45

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 7 – DEFERRED REVENUE

At June 30, 2016 and December 31, 2015, deferred revenue consists of the following:

	Successor
	June 30, 2016		December 31, 2015
Customer deposits	$	44,355	$	-
Franchise fees		1,091,501		646,501
	$	1,135,856	$	646,501

NOTE 8 – NOTES PAYABLE

The following is a summary of notes payable at June 30, 2016 and December 31, 2015:

	Successor
	June 30, 2016		December 31, 2015
Note I	$	150,000	$	300,000
Springfield Note		-		8,100
	$	150,000	$	308,100

On January 23, 2015, in connection with the MMB Acquisition, MMI issued two promissory notes payable in the amount of $400,000 (“Note I”) and $204,000 (“Note II”), respectively. Note I includes interest imputed at the rate of 0.41% per annum and is payable in three installments with the final installment due eighteen months after the closing date of the MMB acquisition. Note II was secured by the assets of Colonia, bore no stated interest and was due on March 9, 2015. In connection with MMB acquisition on January 23, 2015, MMI issued 5,757,120 shares of its common stock to the Parent, in exchange for the Parent’s obligation to repay the promissory notes in full.

On March 9, 2015, the Parent repaid Note II in full. On July 21, 2015, January 23, 2016 and July 23, 2016, installments of $100,000, $150,000 and $150,000 were repaid on the balance of Note I by the Parent. As of July 23, 2016, there is no balance outstanding related to Note I.

On May 4, 2015, in connection with the opening of a MMB owned restaurant, MMB entered into a note payable in the amount of $18,060 (the “Springfield Note”). The Company made payments on the Springfield Note totaling $9,960 during 2015, resulting in a principal balance of $8,100 at December 31, 2015. The remaining balance on the Springfield Note was repaid during the first six months of 2016.

F-46

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 9 – CONVERTIBLE NOTE PAYABLE TO PARENT

On December 31, 2015, the Company issued a promissory note in the amount of $1,082,620 (the “2015 ARH Note”) to the Parent which owns a majority of the outstanding common stock of the Company at December 31, 2015. The 2015 ARH Note has no stated interest rate on maturity date. The note is convertible into 2,165,240 shares of the Company’s stock at $0.50 per share. The fair value of the Company’s common stock on the date the note was issued was $0.60, creating an intrinsic value of $0.10 per share. In accordance with ASC 470 “Debt with Conversion and other Options”, the intrinsic value results in a beneficial conversion feature which is recorded as a debt discount with a corresponding amount to additional paid in capital. The Company recorded a debt discount of $216,524 related to the beneficial conversion feature on the 2015 ARH Note, which will be amortized through June 30, 2017. The 2015 ARH Note was converted to common stock on March 14, 2017 (see Note 12 – Subsequent Events).

During the six months ended June 30, 2016, the Company recorded interest expense related to the amortization of the debt discount of $66,877.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigations, Claims and Assessments

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management, such matters are currently not expected to have a material impact on the Company’s financial statements.

The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.

NOTE 11 – EQUITY

On April 21, 2016, the Company granted a three-year warrant for the purchase of 50,000 shares of MMI common stock at an exercise price of $1.00 per share to a franchisee and developer of the Company in exchange for services. The warrant had a grant date value of $3,684.

F-47

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 12 – SUBSEQUENT EVENTS

Operating Leases

On July 21, 2016, the Company entered into a lease agreement for restaurant space in Fountain Valley, California. The lease has a five year term, with two option terms of sixty months each, and expires five years after the commencement date, defined as the date the restaurant officially opens for business. The rent expense related to the Fountain Valley lease for the first year is $6,494 per month, or $77,922 annually. As of the date of filing, the restaurant had not been opened.

On September 1, 2016, the Company entered into a lease agreement for restaurant space in New York City, New York (the “Upper East Side Lease”). The lease has a ten year term, and expires on August 31, 2026. The current rent expense related to the Upper East Side Lease is $9,650 per month, or $115,800 annually. The landlord is holding a $28,950 security deposit related to the Upper East Side Lease.

On September 21, 2016, the Company entered into an amendment of its lease agreement for office space in Colonia, New Jersey. The lease has a six month term, and is renewable on a rolling six month basis through September 30, 2021. The rent for the initial term is $2,266 per month, or $13,596 for six months.

On September 30, 2016, the Company assumed a lease agreement for restaurant space in Winston-Salem, North Carolina with three years remaining on the original five year term. The lease expires on October 1, 2019. The current rent expense related to the Winston-Salem lease is $4,283 per month, or $51,396 annually. The landlord is holding a $4,117 security deposit related to the Winston-Salem lease.

On November 18, 2016, the Company assumed a lease agreement for restaurant space in New York, New York (the “Tribeca Lease”). The Tribeca lease expires on April 30, 2020. The current rent expense related to the Tribeca Lease is $7,525 per month, or $90,295 annually. The landlord is holding a $40,000 security deposit related to the Tribeca Lease, which was assigned to the Company in connection with the assumption of the Tribeca Lease.

New Company Owned Restaurants

Subsequent to June 30, 2016 and through the filing date of this report, the Company opened five additional Company-owned restaurants.

F-48

MUSCLE MAKER, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 12 – SUBSEQUENT EVENTS, continued

Parent Transactions

During the period from July 1 through December 31, 2016 the Parent provided $1,364,842 of advances to the Company. These advances, combined with the $1,257,000 payable to Parent as June 30, 2016 were exchanged for a convertible note in the amount of $2,621,842 (the “2016 ARH Note”). The 2016 ARH Note has no stated interest rate or maturity date and is convertible into shares of MMI’s common stock at a conversion price of $0.40 per share at a time to be determined by the lender. The 2016 ARH Note includes a three-year warrant for the purchase of 2,294,112 shares of MMI’s common stock at an exercise price of $1.00 per share. On March 14, 2017, the Parent elected to convert the 2016 ARH Note into 6,554,604 shares of MMI’s common stock.

During the period from December 31, 2016 through February 15, 2017, the Parent provided $980,949 of advances to the Company. The payable due to the Parent as a result of these advances was exchanged for a convertible promissory note in the amount of $980,949 (the “2017 ARH Note”). The 2017 ARH Note has no stated interest rate or maturity date and is convertible into shares of MMI’s common stock at a conversion price of $0.40 per share at a time to be determined by the lender. The 2017 ARH Note includes a three-year warrant for the purchase of 858,330 shares of MMI’s common stock at an exercise price of $1.00 per share. On March 14, 2017, the Parent elected to convert the 2017 ARH Note into 2,452,373 shares of MMI’s common stock.

On March 14, 2017, the Parent elected to convert the 2015 ARH Note in the principal amount of $1,082,620 into 2,165,240 shares of MMI’s common stock at a conversion price of $0.50 per share.

Spin-Off of MMI by Parent

On March 23, 2017, Parent authorized and facilitated the distribution of 51,672,217 shares of Common Stock of MMI held by American Restaurants, LLC, the wholly owned subsidiary of Parent, to the shareholders of Parent (the “Spin-Off”). As a result of the Spin-Off on March 23, 2017, ARH is no longer a majority owner of MMI.

F-49

MUSCLE MAKER, INC

Best Efforts Offering of 10,000,000 Shares of Common Stock

OFFERING CIRCULAR

Book Runner & Lead Manager

WELLINGTON SHIELDS & CO., LLC

PART III – EXHIBITS

Index to Exhibits

Exhibit No.	Exhibit Description
1.1	Engagement Letter, dated July 10, 2016, between Wellington Shields & Co., LLC and Muscle Maker, Inc
2.1	Articles of Incorporation of Muscle Maker, Inc filed with California Secretary of State on December 8, 2014
2.2	Bylaws of Muscle Maker, Inc dated December 10, 2014.
4.1	Form of Subscription Agreement for Regulation A Offering.
6.1	Unit Purchase Agreement, dated January 23, 2015, by and among Muscle Maker Franchising, LLC, MMF Target, LLC, Muscle Maker Brands, LLC, and Muscle Maker, Inc
6.2	API and Data License Agreement, dated February 24, 2017, between Direct Transfer, LLC and Muscle Maker, Inc
8.1	Form of Subscription Escrow Agreement, between Regions Bank and Muscle Maker
10.1	Power of attorney (included on signature page of Offering Circular).
11.1	Consent of Marcum LLP
11.2	Consent of Legal & Compliance, LLC (included in Exhibit 12.1)
12.1	Opinion of Legal & Compliance, LLC
13.1	Testing the Waters materials

1

SIGNATURES

Pursuant to the requirements of Regulation A, the registrant has duly caused this Form 1-A to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on March 30, 2017.

MUSCLE MAKER, INC
By:	/s/ Robert E. Morgan
	Robert E. Morgan,
	Chief Executive Officer and President

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Robert E. Morgan as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Form 1-A offering statement and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorney-in-fact and agent or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of Regulation A, this Form 1-A has been signed by the following persons in the capacities indicated on March 30, 2017.

Name	Title
/s/ Robert E. Morgan	Chief Executive Officer, President, and
Robert E. Morgan	Director (Principal Executive Officer)
/s/ Grady Metoyer	Chief Financial Officer
Grady Metoyer	(Principal Financial Officer)
/s/ Tim M. Betts	Chairman of the Board and Director
Tim M. Betts
/s/ Noel DeWinter	Director
Noel DeWinter
/s/ Merlin C. Spencer	Director
Merlin C. Spencer /s/ A.B. Southall III	Director
A.B. Southall III
/s/ Paul L. Menchik	Director
Paul L. Menchik

2

EX1A-1 UNDR AGMT

 

 

EX1A-2A CHARTER

 

EX1A-2B BYLAWS

BYLAWS

OF

Muscle Maker, Inc,

a California Corporation

ARTICLE I

Shareholders

Section 1.1. Annual Meetings. An annual meeting of shareholders of Muscle Maker, Inc (the “Corporation”) shall be held on a date and at a time and place, either within or without the state of California, as determined by resolution of the Corporation’s Board of Directors.

Section 1.2. Special Meetings. Special meetings of the shareholders may be called at any time by the Board of Directors, the Chairperson of the Board of Directors, or the holders of shares entitled to cast not less than ten percent of the votes at the meeting. Special meetings will be held on a date and at a time and place, either within or without the state of California, as may be stated in the notice of the meeting.

Section 1.3. Notice of Meetings.

a) General; Delivery. Written notice of each annual or special shareholder meeting shall be delivered to each shareholder entitled to vote at the meeting at least 10 (or, if sent by third-class mail, 30) but no more than 60 days before the date of the meeting. All written notices and reports of any such meeting shall be delivered either personally, by first-class mail (unless the Corporation has 500 or more shareholders determined as provided by the California Corporations Code on the record date for the meeting, in which case notice may be sent by third- class mail), by electronic transmission by the corporation (including email) pursuant to Section 20 of the California Corporations Code, or by other means of written communication to each shareholder at the address of such shareholder that appears on the Corporation’s books or that was provided by such shareholder to the Corporation for the purpose of notice. Except as otherwise prescribed by the Board of Directors in particular instances or as otherwise provided by Section 601(c) of the California Corporations Code, the Secretary shall prepare and deliver, or cause to be prepared and delivered, the notice of meetings of shareholders.

b) Notice Content. Each notice shall state the following:

(i)

the place, date and time of the meeting, and

(ii)

in the case of a special meeting, the general nature of the business to be transacted, and that no other business may be transacted, or in the case of an annual meeting, those matters which the Board of Directors, at the time of the delivery of the notice, intends to present for action by the shareholders; provided, however that, any proper matter may be presented for action at an annual meeting subject to provisions of Section 601(f) of the California Corporations Code that require certain matters be stated in the notice in order to be presented at a meeting. The notice of any meeting during which directors are to be elected including, but not limited to, any annual meeting notice, shall include a list of the names of the nominees intended, at the time of the mailing of the notice, to be presented by the Board of Directors for election.

Section 1.4. Adjournments. Except as otherwise provided in this Section 1.1, when a shareholders meeting is adjourned to another time or place, notice need not be given of such adjourned meeting if the time and place are announced at the meeting at which the adjournment is taken. If the adjournment is for more than 45 days or, if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting. The Corporation may transact any business at the adjourned meeting which might have been transacted at the original meeting.

Section 1.5. Validating Meeting of Shareholders; Waiver of Notice. The transactions of any meeting of shareholders, however called and noticed and wherever held, are as valid as though such transaction had taken place at a meeting duly held after regular call and notice if (a) a quorum is present either in person or by proxy and (b) if, either before or after the meeting, each of the persons entitled, to vote but not present in person or by proxy signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A person’s attendance at a meeting shall constitute a waiver of notice of and presence at such meeting except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters that the law requires to be included in the notice of the meeting but was not so included if such objection is expressly made at the meeting. Except as required by Section 601(f) of the California Corporations Code, neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof.

Section 1.6. Quorum. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders, except as otherwise provided by the Articles of Incorporation. The shareholders present at a duly called and held meeting with a quorum present may continue to transact business until it is adjourned even if shareholders withdraw from the meeting and leave less than a quorum provided that any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. In the absence of a quorum, any meeting of shareholders may be adjourned by the vote of a majority of the shares, represented either in person or by proxy, but no other business may be transacted, except as provided in this Section 1.3.

Section 1.7. Organization. Meetings of shareholders shall be presided over by the Chairperson of the Board of Directors, if any, or in the absence of the Chairperson of the Board of Directors by a chairperson designated by the Board of Directors or by a chairperson chosen at the meeting. The Secretary or a secretary appointed by the chairperson of the meeting shall act as secretary of the meeting.

Section 1.8. Voting.

a) Unless otherwise provided in the articles of incorporation of the Corporation, as may be amended from time to time (the “Articles of Incorporation”), each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote of shareholders. Except as otherwise provided by the California Corporations Code, the Articles of Incorporation, or the bylaws of the Corporation, as may be amended from time to time (the “Bylaws”), the affirmative vote of the holders of a majority of the shares entitled to vote on the subject matter at a meeting in which a quorum is present shall be the act of the shareholders.

b) Any holder of multiple shares entitled to vote on any matter may vote part of his, her or its shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal other than elections to office. If the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholder’s approving vote is with respect to all shares such shareholder is entitled to vote.

c) Except as otherwise provided in the Articles of Incorporation and subject to the requirements of this Section 1.5, every shareholder entitled to vote at any election of directors may cumulate such shareholder’s votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which the shareholder’s shares are normally entitled, or distribute the shareholder’s votes on the same principle among as many candidates as the shareholder thinks fit. No shareholder shall be entitled to cumulate votes unless such candidate or candidates names have been placed in nomination prior to the voting and the shareholder gives notice at the meeting prior to the voting of his, her or its intention to cumulate his, her or its votes. If any one shareholder has given such notice, all shareholders may cumulate their votes for candidates in nomination. In any election of directors, the candidates receiving the highest number of votes of the shares entitled to be voted for them, up to the number of directors to be elected by such shares, are elected. Elections for directors need not be by ballot unless a shareholder demands election by ballot at the meeting and before the voting begins

Section 1.9. Shareholder’s Proxies. Every shareholder entitled to vote shares may authorize another person or persons to act by proxy with respect to such shares. Any proxy purporting to be executed in accordance with the provisions of Section 705 of the California Corporations Code shall be presumptively valid. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Except as otherwise provided in this section, every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto. Such revocation may be effected by (a) delivering to the Corporation a written document stating that the proxy is revoked, (b) presenting to the meeting a subsequent proxy executed by the person executing the prior proxy, or (c) attending and voting in person at the meeting by the person executing the proxy. A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the Corporation. A proxy may be made irrevocable as provided under the California Corporations Code. If the Corporation has 100 or more shareholders, any form of proxy distributed to 10 or more shareholders shall conform to the requirements of Section 604 of the California Corporations Code.

Section 1.10. Inspectors. Inspectors of election may be appointed by the Board of Directors as provided under the California Corporations Code.

Section 1.11. Fixing Date for Determination of Shareholders of Record.

a) In order that the Corporation may determine the shareholders entitled to notice of any meeting; vote; express consent to corporate action in writing without a meeting; receive payment of any dividend, other distribution or allotment of any rights; or exercise any rights with respect to any other lawful action, the Board of Directors may fix a record date in advance which shall be, as applicable, at least 10 but no more than 60 days prior to the date of the meeting and no more than 60 days prior to any other action.

b) If no record date is fixed: (1) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day immediately preceding the day on which notice is given or, if notice is waived, at the close of business on the business day immediately preceding the day on which the meeting is held; (2) the record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board of Directors has been taken, shall be the day on which the first written consent is given; and (3) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto or the 60th day prior to the date of such other action, whichever is later. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of a meeting unless the Board of Directors fixes a new record date for the adjourned meeting, but the Board of Directors shall fix a new record date if the meeting is adjourned for more than 45 days after the date set for the original meeting.

Section 1.12. Consent of Shareholders in Lieu of Meeting.

a) Except as otherwise provided in the Articles of Incorporation or in this Section 1.9, any action which may be taken at any annual or special meeting of the shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

b) Directors may not be elected by written consent except by unanimous consent of all shares entitled to vote for the election of directors. Notwithstanding the foregoing sentence, except for vacancies created by removal, shareholders may fill any vacancy in the Board of Directors that are not filled by the Board of Directors by electing a director through written consent of a majority of outstanding shares entitled to vote.

c) Any shareholder giving a written consent or such shareholder’s proxyholder or a transferee of the shares or a personal representative of such shareholder or its respective proxyholder may revoke the consent by a writing received by the Corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary of the Corporation, but may not do so thereafter. Such revocation is effective upon its receipt by the Secretary of the Corporation.

d) Unless all shareholders entitled to vote consent in writing, notice of any shareholder approval without a meeting shall be provided to the shareholders as required under the California Corporations Code.

e) If the Corporation has 100 or more shareholders, any form of written consent distributed to 10 or more shareholders shall conform to the requirements of Section 604 of the California Corporations Code.

ARTICLE II

Board of Directors

Section 2.1. Powers; Number. The business and affairs of the Corporation shall be managed by and all corporate powers shall be exercised by or under the direction of the Board of Directors except as otherwise provided in the Articles of Incorporation or Bylaws. The number of directors comprising the Board of Directors shall be 1 until changed by amendment of this bylaw.

Section 2.2. Election; Term of Office. At each annual meeting of shareholders, directors shall be elected to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified.

Section 2.3. Removal. Subject to Section 303 of the California Corporations Code, any or all of the directors may be removed without cause if such removal is approved by a majority of the outstanding shares then entitled to vote on the election of directors. Any reduction in the authorized number of directors does not itself automatically remove any director prior to the expiration of such director’s term in office.

Section 2.4. Vacancies; Resignation.

a) A vacancy in the Board of Directors is deemed to exist (a) if a director dies, resigns, or is removed by the shareholders or an appropriate court, as provided in Sections 303 or 304 of the California Corporations Code; (b) if the Board of Directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any shareholders meeting at which one or more directors are elected, the shareholders fail to elect the full authorized number of directors to be elected for at such meeting. Unless otherwise provided in the Articles of Incorporation or the Bylaws and except for a vacancy caused by the removal of a director, vacancies on the Board of Directors may be filled by appointment by the Board of Directors. A vacancy on the Board of Directors caused by the removal of a director may be filled only by the shareholders, except that a vacancy created by the Board of Directors declaring an office of a director vacant because a director has been convicted of a felony or declared of unsound mind by an order of court may be filled by the Board of Directors.

b) The shareholders may elect a director at any time to fill a vacancy not filled by the Board of Directors.

c) If the number of directors then in office is less than a quorum, vacancies on the Board of Directors may be filled by the unanimous written consent of the directors then in office, the affirmative vote of a majority of the directors then in office, or the sole remaining director.

d) Any director may resign effective upon giving written notice to the Chairperson of the Board of Directors, the Secretary, or the Board of Directors unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

Section 2.5. Meetings; General. Meetings of the Board of Directors may be held at such places, within or without the state of California, and at such times as the Board of Directors may from time to time determine. Annual meetings shall be held without notice immediately thereafter and at the same place as the annual meeting of shareholders unless the Board of Directors determines otherwise by resolution. Special meetings may be held at any time or place whenever called by the Chairperson of the Board of Directors or by any two directors.

Section 2.6. Notice of Meetings; Waiver of Notice.

a) Notice of special meetings shall be provided four days prior to the date of the meeting by mail or 48 hours prior to the date of the meeting if delivered personally, by telephone, by electronic transmission (including email) or by any other means permitted under Section 307 of the California Corporations Code. All such notices shall comply with requirements under the California Corporations Code.

b) Notice of a meeting need not be given to any director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting the lack of notice to such director prior thereto or at its commencement. All such waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A notice or waiver of notice need not specify the purpose of any regular or special meeting of the Board of Directors.

Section 2.7. Participation in Meetings by Conference Telephone Permitted. Members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or of such committee, as the case may be, through the use of conference telephone or any other means permitted under the California Corporations Code provided that all members participating in such meeting can hear one another. Participation in a meeting pursuant to this section shall constitute presence in person at such meeting.

Section 2.8. Quorum; Adjournment; Vote Required for Action.

a) At all meetings of the Board of Directors, a majority of the authorized number of directors shall constitute a quorum for the transaction of business. Subject to the provisions and requirements of the California Corporations Code, every act or decision done or made by a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless the Articles of Incorporation or the Bylaws require a vote of a greater number.

b) A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than 24 hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.

Section 2.9. Organization. Meetings of the Board of Directors shall be presided over by the Chairperson of the Board of Directors or in the absence of the Chairperson of the Board of Directors, by a chairperson chosen at the meeting. The Secretary or in the absence of the Secretary, any person appointed by the chairperson, shall act as secretary of the meeting.

Section 2.10. Action by Directors Without a Meeting. Any action required or permitted to be taken by the Board of Directors, or any committee thereof, may be taken without a meeting if all members of the Board of Directors or of such committee, as the case may be, individually or collectively consent in writing to such action. Any such written consent shall be filed with the minutes of the proceedings of the Board of Directors. Such action by written consent shall have the same force and effect as a unanimous vote of such directors.

Section 2.11. Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors for services in any capacity.

Section 2.12. Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or between the Corporation and any other corporation, firm or association in which one or more of the Corporation’s directors are directors or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or directors are present at the meeting during which the Board of Directors or committee thereof authorizes, approves or ratifies the contract or transaction, or solely because his or her or their votes are counted for such purpose if: (1) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the shareholders and such contract or transaction is approved by the shareholders in good faith with the shares owned by the interested director or directors not being entitled to vote thereon; (2) the material facts as to his, her or their relationship or interest and as to the contract or transaction are fully disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee authorizes, approves, or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the Corporation at the time it is authorized, approved or ratified; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the shareholders, as applicable. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

Section 2.13. Indemnification. To the maximum extent permitted under the California Corporations Code, the Corporation shall have the right and power to indemnify any person who was a party, is a party, or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative, because such person is or was an “agent” (as defined in Section 317 of the California Corporations Code) of the Corporation against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such action or proceeding. To the extent permitted under the California Corporations Code, the Corporation may advance expenses incurred in defending any such action or proceeding prior to final disposition after the Corporation has received an undertaking required by Section 317(f) of the California Corporations Code by or on behalf of the agent to repay the Corporation if it is determined ultimately that the agent is not entitled to be indemnified.

Section 2.14. Emergency Bylaws. The Board of Directors may adopt bylaws, not in conflict with the Articles of Incorporation of the Corporation, to manage and conduct the ordinary business affairs of the Corporation only in an emergency as defined in Section 207 of the California Corporations Code, including but not limited to, procedures for calling a board meeting, quorum requirements for a board meeting, and designation of additional or substitute directors. During an emergency, the Board of Directors may not take any action that requires the vote of the shareholders or otherwise is not in the Corporation’s ordinary course of business, unless the required vote of the shareholders was obtained prior to the emergency. The emergency bylaws shall not be effective after the emergency ends. Corporate action taken in good faith in accordance with the emergency bylaws binds the Corporation, and may not be used to impose liability on a corporate director, officer, employee, or agent.

ARTICLE III

Executive and Other Committees

Section 3.1. Executive and Other Committees of Directors.

a) By resolution adopted by a majority of the authorized number of directors, the Board of Directors may designate an executive committee and other committees, each of which shall serve at the pleasure of the Board of Directors; consist of two or more directors; and, to the extent provided in the resolution, have all the authority of the Board of Directors except that no such committee shall have power or authority with respect to the following matters:

(i)	Approve any action for which the approval of the shareholders or of the outstanding shares is also required under the California Corporations Code;
(ii)	Fill vacancies in the Board of Directors or in any committee thereof;
(iii)	Fix compensation of the directors for serving on the Board of Directors or on any committee thereof;
(iv)	Amend or repeal the Bylaws or adopt new bylaws;
(v)	Amend or repeal any resolution of the Board of Directors which, by its terms, is so amendable or repealable;
(vi)	Make distributions to shareholders, except at a rate or in a periodic amount or within a price range set forth in the Articles of Incorporation or as determined by the Board Directors
(vii)	Appoint other committees of the Board of Directors or the members thereof;
(viii)	Remove or indemnify any director; or
(ix)	Change the number of authorized directors on the Board of Directors.

b) The Board of Directors may designate one or more directors as alternate members of any such committee who may replace any absent member or members at any meeting of such committee.

c) Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of the Bylaws.

ARTICLE IV

Officers

Section 4.1. Officers; Election. As soon as practicable after the annual meeting of shareholders in each year, the Board of Directors shall elect a President, Chief Financial Officer, and Secretary. The Board of Directors may also elect such other officers with such duties as the Board of Directors may deem desirable or appropriate. Any number of offices may be held by the same person.

Section 4.2. Term of Office; Resignation; Removal; Vacancies. Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board of Directors after the annual meeting of shareholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board of Directors or to the Chairperson of the Board of Directors or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein and, unless otherwise specified therein, no acceptance of such resignation shall be necessary to make it effective. The Board of Directors may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by tile Board” Directors at any regular or special meeting.

Section 4.3. Powers and Duties. The officers of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in the Bylaws or in a resolution of the Board of Directors which is not inconsistent with the Bylaws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board of Directors. The Secretary shall have the duty to record the proceedings of the meetings of the shareholders, the Board of Directors and any committees of the Board of Directors in a book to be kept for that purpose. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his or her duties.

ARTICLE V

Shares and Certificates

Section 5.1. Certificates. Every holder of shares in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the (1) the President, any Vice President, or Chairperson of the Board of Directors, and (2) Chief Financial Officer, or Secretary of the Corporation. Each certificate shall be issued in numerical order, and state the shareholder’s name, the number of shares and the class, designation or series, if any, of shares owned by such shareholder, and contain any statement or legend required by any applicable law.

Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new share certificate or a new certificate for any other security in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE VI

Records and Reports

Section 6.1. Records and Minutes. The Corporation shall keep at its principal executive office (or, with respect to Corporation’s shareholder records, at the office of its transfer agent or registrar) the following corporate records: (i) a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder, (ii) minutes of proceedings of the shareholders, the Board of Directors, and committees of the Board of Directors, and (iii) accounting records. All records shall be kept either in written form or in a form capable of being converted into a clearly legible form within a reasonable time. The Corporation shall so convert any such records upon the request of any person entitled to inspect the same at the Corporation’s principal executive office.

Section 6.2. Inspection by Shareholders. The share register, minutes, and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. These rights of inspection shall extend to the records of each subsidiary of the Corporation. Shareholders shall also have the right to inspect the original or copy of the Bylaws at all reasonable times during business hours.

Section 6.3. Inspection by Directors. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the Corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

Section 6.4. Annual Report to Shareholders. For as long as there are fewer than 100 shareholders of the Corporation, the requirement of an annual report to shareholders referred to in Section 1501 of the California Corporations Code is expressly waived. However, nothing in this provision shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders, as the Board of Directors considers appropriate. If at any time and for as long as, the number of shareholders of the Corporation shall exceeds 100, the Board of Directors shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal year adopted by the Corporation. This report shall be sent at least 15 days (if third- class mail is used, 35 days) before the annual meeting of shareholders to be held during the next fiscal year and in the manner specified for giving notice to shareholders in the Bylaws. The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and a statement of changes in financial position for the fiscal year prepared in accordance with generally accepted accounting principles applied on a consistent basis and accompanied by any report of independent accountants, or, if there is no such report, the certificate of an authorized officer of the Corporation that the statements were prepared without audit from the Corporation’s books and records.

Section 6.5. Financial Statements. The Corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the Corporation on file in the Corporation’s principal office for 12 months. These documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand.

ARTICLE VII

Miscellaneous

Section 7.1. Principal Executive or Business Offices. The Board of Directors shall fix the location of the principal executive office of the Corporation at any place either within or without the state of California. The Corporation may also have additional offices in other places as the Corporation’s business may require, and as the Board of Directors may determine from time to time. If the principal executive office is located outside California and the Corporation has one or more business offices in California, the Board of Directors shall designate one of these offices as the Corporation’s principal business office in California.

Section 7.2. Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors.

Section 7.3. Amendment of Bylaws. To the extent permitted by law, the Bylaws may be amended or repealed, and new bylaws adopted, by the Board of Directors. The shareholders entitled to vote, however, retain the right to adopt additional bylaws and may amend or repeal any bylaw whether or not adopted by them.

[Remainder Intentionally Left Blank.]

EX1A-4 SUBS AGMT

EXHIBIT 4.1

FORM OF SUBSCRIPTION AGREEMENT

The securities offered hereby are highly speculative. Investing in shares of Muscle Maker, Inc involves significant risks. This investment is suitable only for persons who can afford to lose their entire investment. Furthermore, investors must understand that such investment could be illiquid for an indefinite period of time. No public market currently exists for the securities, and if a public market develops following this offering, it may not continue.

The securities offered hereby have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities or blue sky laws and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and state securities or blue sky laws. Although an offering statement (“Offering Statement”) has been filed with the Securities and Exchange Commission (the “SEC”), that offering statement does not include the same information that would be included in a registration statement under the Securities Act. The securities have not been approved or disapproved by the SEC, any state securities commission or other regulatory authority, nor have any of the foregoing authorities passed upon the merits of this offering or the adequacy or accuracy of the offering circular or any other materials or information made available to subscriber in connection with this offering. Any representation to the contrary is unlawful.

No sale may be made to persons in this offering who are not “accredited investors” if the aggregate purchase price is more than 10% of the greater of such investors’ annual income or net worth. The Company is relying on the representations and warranties set forth by each subscriber in this subscription agreement and the other information provided by subscriber in connection with this offering to determine compliance with this requirement.

Prospective investors may not treat the contents of the subscription agreement, the offering circular or any of the other materials available (collectively, the “Offering Materials”) or any prior or subsequent communications from the Company or any of its officers, employees or agents (including “testing the waters” materials) as investment, legal or tax advice. In making an investment decision, investors must rely on their own examination of the Company and the terms of this offering, including the merits and the risks involved. Each prospective investor should consult the investor’s own counsel, accountant and other professional advisor as to investment, legal, tax and other related matters concerning the investor’s proposed investment.

The Company reserves the right in its sole discretion and for any reason whatsoever to modify, amend and/or withdraw all or a portion of the offering and/or accept or reject in whole or in part any prospective investment in the securities or to allot to any prospective investor less than the amount of securities such investor desires to purchase.

Except as otherwise indicated, the Offering Materials speak as of their date. Neither the delivery nor the purchase of the securities shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date.

1

This agreement (“Agreement”) is made as of the date set forth below by and between the undersigned (“Subscriber”) and MUSCLE MAKER, INC, a California corporation (the “Company”), and is intended to set forth certain representations, covenants and agreements between Subscriber and the Company with respect to the offering (the “Offering”) for sale by the Company of shares of its common stock (the “Shares”) as described in the Company’s Offering Circular dated ____________, 2017 (the “Offering Circular”), a copy of which has been delivered to Subscriber. The Shares are also referred to herein as the “Securities.”

ARTICLE I

SUBSCRIPTION

1.01

Subscription. The minimum investment amount per investor is $250 (125 shares of Common Stock); however, we can waive the minimum purchase requirement on a case to case basis in our sole discretion. Subject to the terms and conditions hereof, Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company the number of Shares set forth on the Subscription Agreement Signature Page, and the Company agrees to sell such Shares to Subscriber at a purchase price of $2.00 per Share for the total amount set forth on the Subscription Agreement Signature Page (the “Purchase Price”), subject to the Company’s right to sell to Subscriber such lesser number of Shares as the Company may, in its sole discretion, deem necessary or desirable.

1.02

Delivery of Subscription Amount; Acceptance of Subscription; Delivery of Securities. Subscriber understands and agrees that this subscription is made subject to the following terms and conditions:

(a)	After the qualification by the SEC of the Offering Statement of the Company, contemporaneously with the electronic execution and delivery of this Agreement through the online platform of Direct Transfer, Subscriber shall pay the Purchase Price for the Shares by ACH debit transfer, wire transfer or by major credit card to the specified bank account maintained by Regions Bank. Payments made by major credit card shall be limited to $300 per Subscriber;
(b)	After the qualification by the SEC of the Offering Statement of the Company, payment of the Purchase Price shall be made by Subscriber through the online platform of Direct Transfer to Regions Bank (the “Escrow Agent”) and received and held by Escrow Agent in a non-interest bearing escrow account (“Escrow Account”) in compliance with SEC Rule 15c2-4, with funds released to the Company only after we closed on the subscription as described in the Circular. Until the Offering Statement is declared qualified by the SEC, no payment from a Subscriber will be accepted by us and put into the Escrow Account;
(c)	This subscription shall be deemed to be accepted only when this Agreement has been signed by an authorized officer or agent of the Company, and the deposit of the payment of the purchase price for clearance will not be deemed an acceptance of this Agreement. The minimum investment amount per investor is $250 (125 shares of Common Stock); however, we can waive the minimum purchase requirement on a case to case basis in our sole discretion;
(d)	The Company shall have the right to reject this subscription, in whole or in part;
(e)	The payment of the Subscription Amount (or, in the case of rejection of a portion of the Subscriber’s subscription, the part of the payment relating to such rejected portion) will be returned promptly, without interest or deduction, if Subscriber’s subscription is rejected in whole or in part or if the Offering is withdrawn or canceled;
(f)	Upon the release of Subscriber’s Purchase Price to the Company by the Escrow Agent, Subscriber shall receive notice and evidence of the digital book-entry (or other manner of record) of the number of the Shares owned by Subscriber reflected on the books and records of the Company and verified by Direct Transfer, acting in the capacity of transfer agent (the “Transfer Agent”), which books and records shall bear a notation that the Shares were sold in reliance upon Regulation A.

2

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER

By executing this Subscription Agreement, Subscriber (and, if Subscriber is purchasing the Securities subscribed for hereby in a fiduciary capacity, the person or persons for whom Subscriber is so purchasing) represents and warrants, which representations and warranties are true and complete in all material respects as of the date of each Closing Date:

2.01	Requisite Power and Authority. Such Subscriber has all necessary power and authority under all applicable provisions of law to execute and deliver this Subscription Agreement. All action on Subscriber’s part required for the lawful execution and delivery of this Subscription Agreement has been or will be effectively taken prior to the Closing. Upon execution and delivery, this Subscription Agreement will be a valid and binding obligation of Subscriber, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights and (b) as limited by general principles of equity that restrict the availability of equitable remedies.
2.02	Investment Representations. Subscriber understands that the Securities have not been registered under the Securities Act. Subscriber also understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Subscriber’s representations contained in this Subscription Agreement. Subscriber is purchasing the Shares for Subscriber’s own account.
2.03	Illiquidity and Continued Economic Risk. Subscriber acknowledges and agrees that there is no ready public market for the Securities and that there is no guarantee that a market for their resale will ever exist. Subscriber must bear the economic risk of this investment indefinitely and the Company has no obligation to list the Securities on any market or take any steps (including registration under the Securities Act or the Securities Exchange Act of 1934, as amended) with respect to facilitating trading or resale of the Securities. Subscriber acknowledges that Subscriber is able to bear the economic risk of losing Subscriber’s entire investment in the Securities. Subscriber also understands that an investment in the Company involves significant risks and has taken full cognizance of and understands all of the risk factors relating to the purchase of Securities.
2.04	Accredited Investor Status or Investment Limits. Subscriber represents that either:

(a)	Subscriber is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. Subscriber represents and warrants that the information set forth in response to question (c) on the Subscription Agreement Signature Page hereto concerning Subscriber is true and correct; or
(b)	The Purchase Price set out in paragraph (b) of the Subscription Agreement Signature Page, together with any other amounts previously used to purchase Securities in this offering, does not exceed 10% of the greater of the Subscriber’s annual income or net worth.

Subscriber represents that to the extent it has any questions with respect to its status as an accredited investor, or the application of the investment limits, it has sought professional advice.

2.05 Shareholder Information. Within five days after receipt of a request from the Company, Subscriber hereby agrees to provide such information with respect to its status as a shareholder (or potential shareholder) and to execute and deliver such documents as may reasonably be necessary to comply with any and all laws and regulations to which the Company is or may become subject, including, without limitation, the need to determine the accredited status of the Company’s shareholders. Subscriber further agrees that in the event it transfers any Securities, it will require the transferee of such Securities to agree to provide such information to the Company as a condition of such transfer.

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2.06	Company Information. Subscriber has read the Offering Circular filed with the SEC, including the section titled “Risk Factors.” Subscriber acknowledges that no representations or warranties have been made to Subscriber, or to Subscriber’s advisors or representative, by the Company or others with respect to the business or prospects of the Company or its financial condition.
2.07	Valuation. Subscriber acknowledges that the price of the Securities was set by the Company on the basis of the Company’s internal valuation and no warranties are made as to value. Subscriber further acknowledges that future offerings of Securities may be made at lower valuations, with the result that the Subscriber’s investment will bear a lower valuation.
2.08	Domicile. Subscriber maintains Subscriber’s domicile (and is not a transient or temporary resident) at the address shown on the signature page.
2.09	Placement Agent Fees. Except for the placement agent fees to Wellington Shields & Co., LLC, no fees or commissions will be payable by the Company to brokers, finders or investment bankers with respect to the sale of any of the Common Stock or the consummation of the transactions contemplated by this Agreement. The Company agrees that it will indemnify and hold harmless the Subscriber from and against any and all claims, demands or liabilities for broker’s, finder’s, placement or other similar fees or commissions incurred by the Company or alleged to have been incurred by the Company in connection with the sale of the Common Stock or the consummation of the transactions contemplated by this Agreement.
2.10	Foreign Investors. If Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Subscription Agreement, including (a) the legal requirements within its jurisdiction for the purchase of the Securities, (b) any foreign exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities. Subscriber’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
2.10	Patriot Act; Anti-Money Laundering; OFAC. The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations. Subscriber hereby represents and warrants to the Company as follows:

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(a)	The Subscriber represents that (i) no part of the funds used by the Subscriber to acquire the Securities or to satisfy his/her capital commitment obligations with respect thereto has been, or shall be, directly or indirectly derived from, or related to, any activity that may contravene United States federal or state or non-United States laws or regulations, including anti-money laundering laws and regulations, and (ii) no capital commitment, contribution or payment to the Company by the Subscriber and no distribution to the Subscriber shall cause the Company to be in violation of any applicable anti-money laundering laws or regulations including, without limitation, Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the United States Department of the Treasury Office of Foreign Assets Control regulations. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in the Memorandum or any other agreement, to the extent required by any anti-money laundering law or regulation, the Company may prohibit capital contributions, restrict distributions or take any other reasonably necessary or advisable action with respect to the Securities, and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith. U.S. federal regulations and executive orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals1 or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists.
(b)	To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from a prospective subscriber if such prospective investor cannot make the representation set forth in this paragraph. The Subscriber agrees to promptly notify the Company should the Subscriber become aware of any change in the information set forth in these representations. The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and any broker may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company or any Broker or any of the Company’s other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.
(c)	To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure2, or any immediate family3 member or close associate4 of a senior foreign political figure, as such terms are defined in the footnotes below.

1	These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs.
2	A “senior foreign political figure” is defined as a senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.
3	“Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.
4	A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.

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(d)	If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate.
(e)	The Subscriber acknowledges that, to the extent applicable, the Company will seek to comply with the Foreign Account Tax Compliance Act provisions of the U.S. Internal Revenue Code and any rules, regulations, forms, instructions or other guidance issued in connection therewith (the “FATCA Provisions”). In furtherance of these efforts, the Subscriber agrees to promptly deliver any additional documentation or information, and updates thereto as applicable, which the Company may request in order to comply with the FATCA Provisions. The Subscriber acknowledges and agrees that, notwithstanding anything to the contrary contained in the Memorandum, any side letter or any other agreement, the failure to promptly comply with such requests, or to provide such additional information, may result in the withholding of amounts with respect to, or other limitations on, distributions made to the Subscriber and such other reasonably necessary or advisable action by the Company with respect to the Securities (including, without limitation, required withdrawal), and the Subscriber shall have no claim, and shall not pursue any claim, against the Company or any other person in connection therewith
(f)	ANTI MONEY LAUNDERING REQUIREMENTS

The USA PATRIOT Act	What is money laundering?	How big is the problem and why is it important?
The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the United States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. Since April 24, 2002, all brokerage firms have been required to have new, comprehensive anti-money laundering programs.	Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.	The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at US$1 trillion a year.
To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.

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What are we required to do to eliminate money laundering?
Under new rules required by the USA PATRIOT Act, our anti-money laundering program must designate a special compliance officer, set up employee training, conduct independent audits, and establish policies and procedures to detect and report suspicious transaction and ensure compliance with the new laws.	As part of our required program, we may ask you to provide various identification documents or other information. Until you provide the information or documents we need, we may not be able to effect any transactions for you.

The foregoing representations and warranties are true and accurate as of the date hereof and shall survive such date. If any of the above representations and warranties shall cease to be true and accurate prior to the acceptance of this Agreement, Subscriber shall give prompt notice of such fact to the Company by telegram, or facsimile or e-mail, specifying which representations and warranties are not true and accurate and the reasons therefor.

ARTICLE III

SURVIVAL; INDEMNIFICATION

3.01 Survival; Indemnification. All representations, warranties and covenants contained in this Agreement and the indemnification contained herein shall survive (a) the acceptance of this Agreement by the Company, (b) changes in the transactions, documents and instruments described herein which are not material or which are to the benefit of Subscriber, and (c) the death or disability of Subscriber. Subscriber acknowledges the meaning and legal consequences of the representations, warranties and covenants in Article II hereof and that the Company has relied upon such representations, warranties and covenants in determining Subscriber’s qualification and suitability to purchase the Securities. Subscriber hereby agrees to indemnify, defend and hold harmless the Company, its officers, directors, employees, agents and controlling persons, from and against any and all losses, claims, damages, liabilities, expenses (including attorneys’ fees and disbursements), judgments or amounts paid in settlement of actions arising out of or resulting from the untruth of any representation of Subscriber herein or the breach of any warranty or covenant herein by Subscriber. Notwithstanding the foregoing, however, no representation, warranty, covenant or acknowledgment made herein by Subscriber shall in any manner be deemed to constitute a waiver of any rights granted to it under the Securities Act or state securities laws.

ARTICLE IV

MISCELLANEOUS PROVISIONS

4.01	Captions and Headings. The Article and Section headings throughout this Agreement are for convenience of reference only and shall in no way be deemed to define, limit or add to any provision of this Agreement.
4.02	Notification of Changes. Subscriber agrees and covenants to notify the Company immediately upon the occurrence of any event prior to the consummation of this Offering that would cause any representation, warranty, covenant or other statement contained in this Agreement to be false or incorrect or of any change in any statement made herein occurring prior to the consummation of this Offering.

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4.03	Assignability. This Agreement is not assignable by Subscriber, and may not be modified, waived or terminated except by an instrument in writing signed by the party against whom enforcement of such modification, waiver or termination is sought.
4.04	Binding Effect. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns, and the agreements, representations, warranties and acknowledgments contained herein shall be deemed to be made by and be binding upon such heirs, executors, administrators, successors, legal representatives and assigns.
4.05	Obligations Irrevocable. The obligations of Subscriber shall be irrevocable, except with the consent of the Company, until the consummation or termination of the Offering.
4.06	Entire Agreement; Amendment. This Agreement states the entire agreement and understanding of the parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written. No amendment of the Agreement shall be made without the express written consent of the parties.
4.07	Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect any other provision hereof, which shall be construed in all respects as if such invalid or unenforceable provision were omitted.
4.08	Venue; Governing Law. This Agreement shall be governed by and construed in accordance with the laws of California.
4.09	Notices. All notices, requests, demands, consents, and other communications hereunder shall be transmitted in writing and shall be deemed to have been duly given when hand delivered or sent by certified mail, postage prepaid, with return receipt requested, addressed to the parties as follows: to the Company, 15505 Long Vista Drive, Suite 250, Austin, TX 78728, and to Subscriber, at the address indicated below. Any party may change its address for purposes of this Section by giving notice as provided herein.
4.10	Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
4.11	Digital Signatures. Digital (“electronic”) signatures, often referred to as an “e-signature”, enable paperless contracts and help speed up business transactions. The 2001 E-Sign Act was meant to ease the adoption of electronic signatures. The mechanics of this Subscription Agreement’s electronic signature include your signing this Agreement below by typing in your name, with the underlying software recording your IP address, your browser identification, the timestamp, and a securities hash within an SSL encrypted environment. This electronically signed Subscription Agreement will be available to both you and the Company, as well as any associated brokers, so they can store and access it at any time, and it will be stored and accessible on the Direct Transfer’s software tools platform and hosting provider, including backups. You and the Company each hereby consents and agrees that electronically signing this Agreement constitutes your signature, acceptance and agreement as if actually signed by you in writing. Further, all parties agree that no certification authority or other third party verification is necessary to validate any electronic signature; and that the lack of such certification or third party verification will not in any way affect the enforceability of your signature or resulting contract between you and the Company. You understand and agree that your e-signature executed in conjunction with the electronic submission of this Subscription Agreement shall be legally binding and such transaction shall be considered authorized by you. You agree your electronic signature is the legal equivalent of your manual signature on this Subscription Agreement you consent to be legally bound by this Subscription Agreement’s terms and conditions. Furthermore, you and the Company each hereby agrees that all current and future notices, confirmations and other communications regarding this Subscription Agreement specifically, and future communications in general between the parties, may be made by email, sent to the email address of record as set forth in this Subscription Agreement or as otherwise from time to time changed or updated and disclosed to the other party, without necessity of confirmation of receipt, delivery or reading, and such form of electronic communication is sufficient for all matters regarding the relationship between the parties. If any such electronically sent communication fails to be received for any reason, including but not limited to such communications being diverted to the recipients spam filters by the recipients email service provider, or due to a recipient’s change of address, or due to technology issues by the recipients service provider, the parties agree that the burden of such failure to receive is on the recipient and not the sender, and that the sender is under no obligation to resend communications via any other means, including but not limited to postal service or overnight courier, and that such communications shall for all purposes, including legal and regulatory, be deemed to have been delivered and received. No physical, paper documents will be sent to you, and if you desire physical documents then you agree to be satisfied by directly and personally printing, at your own expense, the electronically sent communication(s) and maintaining such physical records in any manner or form that you desire.

[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]

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MUSCLE MAKER, INC

Investor Profile

(Must be completed by Subscriber)

Section A - Personal Investor Information

Investor Name(s):

Individual executing Profile or Trustee:

Social Security Numbers / Federal I.D. Number:

Date of Birth:	Marital Status:
Joint Party Date of Birth:	Investment Experience (Years):
Annual Income:	Liquid Net Worth:
Net Worth:

Tax Bracket: _____ 15% or below _____ 25% - 27.5% _____ Over 27.5%

Home Street Address:

Home City, State & Zip Code:

Home Phone: Home Fax: Home Email:

Employer:

Employer Street Address:

Employer City, State & Zip Code:

Bus. Phone: Bus. Fax: Bus. Email:

Type of Business:

Outside Broker/Dealer:

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Section B - Certificate Delivery Instructions

Shares will be issued only in book-entry form rather than in a physical certificate.

MUSCLE MAKER, INC

SUBSCRIPTION AGREEMENT SIGNATURE PAGE

The undersigned, desiring to purchase shares of common stock of Muscle Maker, Inc, by executing this signature page, hereby executes, adopts and agrees to all terms, conditions and representations of the Subscription Agreement.

(a) The number of Shares the undersigned hereby irrevocably subscribes for is:
	(enter number of Shares)

(b) The aggregate Purchase Price (based on a price of $6.00 per Share) for the Shares the undersigned hereby irrevocably subscribes for is:	$
	(enter total Purchase Price)

(c) Check the applicable box:   

[  ]	The undersigned is an accredited investor (as that term is defined in Regulation D under the Securities Act). The undersigned has checked the appropriate box on the attached Certificate of Accredited Investor Status indicating the basis of such accredited investor status.
[  ]	The amount set forth in paragraph (b) above (together with any previous investments in the Securities pursuant to this offering) does not exceed 10% of the greater of the undersigned’s net worth or annual income.

(d) The Securities being subscribed for will be owned by, and should be recorded on the Company’s books as held in the name of:

(print name of owner or joint owners)

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INDIVIDUALS

IN WITNESS WHEREOF, Subscriber has executed this Subscription Agreement _______________, 2017.

(Signature of subscriber)

PRINT NAME:

COMPANY NAME (IF APPLICABLE):

TITLE OF SIGNER (IF APPLICABLE):

TAXPAYER IDENTIFICATION OR

SOCIAL

SECURITY NO.:

RESIDENCE OR BUSINESS ADDRESS:

Street
City	State	Zip
MAILING ADDRESS (If different from business address):
Street
City	State	Zip

ACCEPTED AND AGREED TO:

MUSCLE MAKER, INC:

By:

Name:

Title:

Date: , 2017

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CORPORATIONS, PARTNERSHIPS, TRUSTS OR OTHER ENTITIES

IN WITNESS WHEREOF, Subscriber has executed this Subscription Agreement _______________, 2017.

NAME OF SUBSCRIBER

By:

Name:

Title:

Date: , 2017

TAXPAYER IDENTIFICATION OR

SOCIAL

SECURITY

NO.:

RESIDENCE OR BUSINESS ADDRESS:

Street  

City	State	Zip
MAILING ADDRESS (If different from business address):
Street
City	State	Zip

ACCEPTED AND AGREED TO:

MUSCLE MAKER, INC:

By:

Name:

Title:

Date: , 2017

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CERTIFICATE OF ACCREDITED INVESTOR STATUS

The undersigned is an individual “accredited investor,” as that term is defined in Regulation D under the Securities Act of 1933, as amended (the “Act”). The undersigned has checked the box below indicating the basis on which it is representing its status as an “accredited investor”:

[  ]	a bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(a)(13) of the Act; an investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that act; a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are “accredited investors”;
[  ]	a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;
[  ]	an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
[  ]	a natural person whose individual net worth, or joint net worth with the undersigned’s spouse, excluding the “net value” of his or her primary residence, at the time of this purchase exceeds $1,000,000 and having no reason to believe that net worth will not remain in excess of $1,000,000 for the foreseeable future, with “net value” for such purposes being the fair value of the residence less any mortgage indebtedness or other obligation secured by the residence, but subtracting such indebtedness or obligation only if it is a liability already considered in calculating net worth;
[  ]	a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with the undersigned’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
[  ]	a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment; or
[  ]	an entity in which all of the equity holders are “accredited investors” by virtue of their meeting one or more of the above standards.
[  ]	an individual who is a director or executive officer of Muscle Maker, Inc

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EX1A-6 MAT CTRCT

UNIT PURCHASE AGREEMENT

This Unit Purchase Agreement (this “Agreement”) is entered into as of January 23, 2015, by and among Muscle Maker Franchising, LLC, a New Jersey limited liability company (“Seller”), MMF Target, LLC, a Delaware limited liability company (“Company”), Muscle Maker Brands, LLC, a California limited liability company (“Buyer”) and Muscle Maker, Inc., a California corporation (“Parent”). Each of Seller, Buyer, Company and Parent may be referred to herein as a “Party” and collectively as the “Parties.”

RECITALS:

A.	Seller is the franchisor of restaurants known as MUSCLE MAKER GRILL® restaurants, located throughout the United States, including the MUSCLE MAKER GRILL® restaurant located at 1250-2 Route 27, Colonia Plaza, Colonia, NJ 07067 (collectively, the “Business”);
B.	Immediately prior to the Closing Date, Seller will transfer certain assets of the Business to Company, including all of Seller’s right, title, and interest in, and to MMF Colonia, Inc., a New Jersey corporation (“MMF Colonia”), pursuant to a contribution agreement (the “Contribution Agreement”), substantially in the form attached hereto as Exhibit A, in exchange for all of the issued and outstanding membership interests of Company (the “Company Membership Units”);
C.	On or immediately prior to the date hereof, Parent has contributed to Buyer cash consideration in an amount sufficient for Buyer to meet its obligations hereunder, including the operation of the Business following the Closing in the manner in which it is currently conducted (in an amount not to exceed $75,000), and holds all of the issued and outstanding membership interests of Buyer (the “Buyer Membership Units”);
D.	Seller desires to transfer to Buyer Company Membership Units in an amount that corresponds to twenty-six percent (26%) of the issued and outstanding Company Membership Units in exchange for twenty-six percent (26%) of the Buyer Membership Units;
E.	Seller desires to sell, transfer and assign to Buyer, and Buyer desires to purchase and acquire from Seller, seventy-four percent (74%) of the Company Membership Units on the terms and subject to the conditions set forth herein; and
F.	As a result of the within transactions, Buyer will own all of the issued and outstanding Company Membership Units.

NOW, THEREFORE, in consideration of the mutual promises, covenants and representations contained herein, the Parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

For all purposes of this Agreement, the following terms have the meanings indicated:

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Asset Acquisition Statements” has the meaning set forth in Section 6.8(b) below.

“Audited Financial Statements” has the meaning set forth in Section 4.5(a) below.

“Business” has the meaning set forth in the Recitals.

“Business Day” means all days other than a Saturday, Sunday, or a day on which banks in New York City are authorized or required by Law to be closed.

“Buyer” has the meaning set forth in the preamble to this Agreement.

“Buyer Closing Certificate” has the meaning set forth in Section 6.1(e) below.

“Buyer Membership Units” has the meaning set forth in the recitals.

“Buyer Operating Agreement” has the meaning set forth in Section 2.5 below.

“Closing” means the consummation of the purchase and sale transaction contemplated by this Agreement.

“Closing Cash Consideration” has the meaning set forth in Section 2.3(a) below.

“Closing Date” has the meaning set forth in Section 3.1 below.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” has the meaning set forth in the preamble to this Agreement.

“Company Membership Units” has the meaning set forth in the Recitals.

“Contract” means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

“Contribution Agreement” has the meaning set forth in the Recitals.

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“Deferred Payment Note I” has the meaning set forth in Section 2.3(b).

“Deferred Payment Note II” has the meaning set forth in Section 2.3(d).

“Direct Claim” has the meaning set forth in Section 7.3(c) below.

“Disclosure Schedule” means the Disclosure Schedule delivered to Buyer by Seller in connection with this Agreement.

“Encumbrance” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

“Employee” means those Persons employed by Seller in connection with the Business immediately prior to the Closing.

“Escrow Agent” means JPMorgan Chase Bank, NA.

“Escrow Agreement” has the meaning set forth in Section 7.7 below.

“Escrow Amount” means 7.45 percent (7.45%) of Buyer Membership Units (with a dollar value of $57,000 for each 1% of Buyer Membership Units) and Four Hundred Twenty-Five Thousand Three Hundred Fifty Dollars ($425,350).

“Financial Statements” has the meaning set forth in Section 4.5(a) below.

“GAAP” has the meaning set forth in Section 4.5(a) below.

“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Guaranty” has the meaning set forth in Section 2.3(d).

“Intellectual Property” means all of the following and similar intangible property and related proprietary rights, interests and protections, however arising, pursuant to the Laws of any jurisdiction throughout the world: (a) trademarks, service marks, assumed names, trade names, brand names, logos, trade dress and other proprietary indicia of goods and services, whether registered, unregistered or arising by Law, and all registrations and applications for registration of such trademarks, including intent-to-use applications, and all issuances, extensions and renewals of such registrations and applications; (b) internet domain names, whether or not trademarks, registered in any generic top level domain by any authorized private registrar or Governmental Authority; (c) original works of authorship in any medium of expression, whether or not published, all copyrights (whether registered, unregistered or arising by Law), all registrations and applications for registration of such copyrights, and all issuances, extensions and renewals of such registrations and applications; (d) confidential information, formulas, designs, devices, technology, know-how, research and development, inventions, methods, processes, compositions and other trade secrets, whether or not patentable; (e) patented and patentable designs and inventions, all design, plant and utility patents, letters patent, utility models, pending patent applications and provisional applications and all issuances, divisions, continuations, continuations-in-part, reissues, extensions, reexaminations and renewals of such patents and applications; and (f) any manuals relating to operations, training, employment, including materials provided to any licensee or franchisee.

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“Intellectual Property Assets” means all Intellectual Property that is owned by Seller and used in, or necessary for, the conduct of the Business as it is currently conducted.

“Intellectual Property Licenses” means all licenses, sublicenses and other agreements by or through which other Persons grant Seller exclusive or non-exclusive rights or interests in or to any Intellectual Property that is used in or necessary for the conduct of the Business as currently conducted.

“Intellectual Property Registrations” means all Intellectual Property Assets that are subject to any issuance, registration, application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including registered trademarks, domain names and copyrights, issued and reissued patents and pending applications for any of the foregoing.

“Interim Financial Statements” has the meaning set forth in Section 4.5(a) below.

“Indemnified Party” has the meaning set forth in Section 7.3 below.

“Indemnifying Party” has the meaning set forth in Section 7.3 below.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“Liability” means a liability, obligation or commitment of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise.

“Losses” has the meaning set forth in Section 7.1 below.

“Material Adverse Effect” means any event, occurrence, fact, condition or change that is materially adverse to (a) the business, results of operations, financial condition or assets of the Business, taken as a whole, or (b) the ability of Seller to consummate the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) conditions generally affecting the industries in which the Business operates; (iii) any changes in financial, banking or securities markets in general, including any disruption thereof and any decline in the price of any security or any market index or any change in prevailing interest rates; (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (v) any action required or permitted by this Agreement or any action taken (or omitted to be taken) with the written consent of or at the written request of Buyer; (vi) any matter of which Buyer is aware on the date hereof; (vii) any changes in applicable Laws or accounting rules (including GAAP) or the enforcement, implementation or interpretation thereof; (viii) the announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships with Seller and the Business; (ix) any natural or man-made disaster or acts of God; or (x) any failure by the Business to meet any internal or published projections, forecasts or revenue or earnings predictions (provided that the underlying causes of such failures (subject to the other provisions of this definition) shall not be excluded).

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“Material Contract” has the meaning set forth in Section 4.8(a) below.

“Material Suppliers” has the meaning set forth in Section 4.11 below.

“MMF Colonia” has the meaning set forth in the Recitals.

“Morgan Employment Agreement” has the meaning set forth in Section 2.4 below.

“Offering Circulars” has the meaning set forth in Section 4.13(c) below.

“Parent” has the meaning set forth in the preamble to this Agreement.

“Parent Closing Certificate” has the meaning set forth in Section 6.1(f) below.

“Parent Merger” has the meaning set forth in Section 6.11 below.

“Parent Stock” has the meaning set forth in Section 2.3(c) below.

“Party(ies)” has the meaning set forth in the preamble to this Agreement.

“Permits” means all permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.

“Permitted Encumbrance” means (a) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures; (b) mechanics’, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business; (c) easements, rights of way, zoning ordinances and other similar encumbrances affecting real property; (d) liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; and (e) other imperfections of title or Encumbrances, if any, that have not had, and would not have, a Material Adverse Effect.

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“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Pre-Acquisition Financings” has the meaning set forth in Section 5.5 below.

“Purchase Price” has the meaning set forth in Section 2.3 below.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Agreement” has the meaning set forth in Section 2.3(d).

“Seller Closing Certificate” has the meaning set forth in Section 6.2(e) below.

“Seller” has the meaning set forth in the preamble to this Agreement.

“Seller Members” has the meaning set forth in Section 4.17(a) below.

“Seller’s Knowledge” means the actual knowledge of Rodney Silva or Robert Morgan.

“Silva Employment Agreement” has the meaning set forth in Section 2.4 below.

“Statement of Allocation” has the meaning set forth in Section 6.8(b) below.

“Tax” means any federal, state, local, foreign or other tax (whether income, sales, FICA, Medicare, use, franchise, excise, real or personal property or other kind of tax), assessment, levy, impost, withholding or other governmental charge and includes all interest and penalties thereon.

“Tax Returns” means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Third Party Claim” has the meaning set forth in Section 7.3(a) below.

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ARTICLE II

CONTRIBUTION AND PURCHASE AND SALE

2.1 Contribution to Capital.

(a) At or prior to the Closing, Parent shall contribute to the capital of Buyer the Closing Cash Consideration in exchange for all of the issued and outstanding Buyer Membership Units. Parent shall start with an initial capital account in Buyer equal to the Closing Cash Consideration.

(b) Subject to the terms and conditions set forth herein, Seller shall contribute to the capital of Buyer Company Membership Units, representing twenty-six percent (26%) of issued and outstanding Company Membership Units. As consideration for the assignment, transfer, conveyance and delivery of twenty-six percent (26%) of the Company Membership Units to Buyer, Buyer shall issue and deliver to Seller on the Closing Date two thousand six hundred (2,600) Buyer Membership Units, representing twenty-six percent (26%) of the outstanding Buyer Membership Units. Seller shall start with an initial capital account in Buyer equal to One Million Four Hundred Ninety-One Thousand One Hundred Thirty-Five Dollars ($1,491,135).

2.2 Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller, seventy-four percent (74%) of the issued and outstanding Company Membership Units for the consideration specified in Section 2.3.

2.3 Consideration for Transfer of Company Membership Units.

The aggregate purchase price (the “Purchase Price”) for seventy-four percent (74%) of the Company Membership Units shall be Four Million Two Hundred Forty-Four Thousand Dollars ($4,244,000), which shall be paid to Seller as follows:

(a)

Closing Cash Consideration. Three Million Five Hundred Seventy Thousand Dollars ($3,570,000) (the “Closing Cash Consideration”) shall be paid by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer;

(b)

Deferred Payment Note I. A promissory note substantially in the form attached hereto as Exhibit B (the “Deferred Payment Note I”) shall be issued by Parent in favor of Seller, which note represents a deferred payment in the principal amount of Four Hundred Thousand Dollars ($400,000). The Deferred Payment Note I shall be payable in three installments be paid by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer as follows:

1.	One Hundred Thousand Dollars ($100,000) no later than six (6) months after the Closing Date;
2.	One Hundred Fifty Thousand Dollars ($150,000) no later than twelve (12) months after the Closing Date; and
3.	One Hundred Fifty Thousand Dollars ($150,000) no later than eighteen (18) months after the Closing Date.

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(c)

Parent Stock. Five Hundred Thousand (500,000) shares of the common stock of Parent (“Parent Stock”) valued at $.14 per share; and

(d)

Deferred Payment Note II. A promissory note substantially in the form attached hereto as Exhibit C (the “Deferred Payment Note II”) shall be issued by Buyer in favor of Seller, which note represents a deferred payment in the principal amount of Two Hundred Thousand Four Dollars ($204,000). The Note shall be payable in full on or prior to March 9, 2015 by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer and shall be secured solely by Buyer’s grant of a first priority security interest in all of the assets of Colonia Muscle Maker Grill as set forth in a security agreement entered into by and among Seller and Buyer, substantially in the form attached hereto as Exhibit D (the “Security Agreement”). The Deferred Payment Note II can be prepaid in whole or part at any time without the payment of any penalty or premium. Parent shall guaranty the payment in the form attached hereto as Exhibit E (the “Guaranty”).

2.4 Employment Agreements. Rodney Silva shall execute an Employment Agreement with Buyer to provide services to Buyer in a form to be reasonably, mutually acceptable to Mr. Silva and Buyer (the “Silva Employment Agreement”). The Silva Employment Agreement shall be for a two (2) year term. Robert Morgan shall execute an Employment Agreement with Buyer to provide services to Buyer in a form to be reasonably, mutually acceptable to Mr. Morgan and Buyer (the “Morgan Employment Agreement”).

2.5 Operating Agreement. At the Closing, Seller and Parent shall execute that certain Operating Agreement between Buyer, Seller and Parent, a copy of which is attached hereto as Exhibit F (the “Buyer Operating Agreement”).

ARTICLE III

CLOSING; TERMINATION

3.1 Date and Place of Closing. If all conditions of Closing set forth in Article VI are either satisfied or waived (other than conditions which by their nature are to be ratified on the Closing Date), the Closing shall take place on January ___, 2015 or such other date as the parties may mutually agree upon, by means of a “virtual” Closing with the electronic exchange of executed documents via facsimile and email necessary to consummate the contemplated transactions and shall be effective as of 12:01AM Pacific Time. The date on which the Closing is to occur is herein referred to as the “Closing Date”.

3.2 Deliveries by Seller. At the Closing, Seller will deliver or cause to be delivered to Buyer all of the following:

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(a) a certificate or certificates representing all of the Company Membership Units duly endorsed for transfer or accompanied by transfer powers duly endorsed in blank;

(b) the Buyer Operating Agreement, duly executed by Seller;

(c) the Seller Closing Certificate;

(d) the Security Agreement, duly executed by Seller;

(e) the Guaranty, duly executed by Seller;

(f) the Escrow Agreement, duly executed by Seller;

(g) the Silva Employment Agreement and the Morgan Employment Agreement duly executed by Rodney Silva and Robert Morgan, respectively;

(h) a stock certificate issued by MMF Colonia to Company representing 100% percent of the issued and outstanding equity interests of MMF Colonia;

(i) all documentation necessary to transfer and to evidence the transfer of Seller’s Intellectual Property Assets pursuant to the Contribution Agreement with the United States Patent and Trademark office and any other state Governmental Authority which has granted such rights;

(j) A duly executed Operating Agreement for the Company;

(k) A duly executed copy of the Contribution Agreement; and

(l) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

3.3 Deliveries by Buyer and Parent. At the Closing, Buyer and Parent, as applicable, shall deliver to Seller:

(a) the Closing Cash Consideration;

(b) the Deferred Payment Note I;

(c) a stock certificate in the name of Seller representing 500,000 shares of Parent Stock (Seller shall be allowed to transfer such shares of Parent Stock to some or all of its members without further consent of Buyer or Parent on a one time basis). However, Seller shall only do so in a manner which complies with all applicable state and federal securities laws;

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(d) the Deferred Payment Note II;

(e) a certificate in the name of Seller representing the Buyer Membership Units (Seller shall be allowed to transfer the Buyer Membership Units to some or all of its members without further consent of Buyer or Parent on a one time basis);

(f) the Buyer Operating Agreement, duly executed by Buyer and Parent;

(g) the Security Agreement, duly executed by Buyer;

(h) the Buyer Closing Certificate;

(i) the Guaranty, duly executed by Parent;

(j) the Escrow Agreement, duly executed by Buyer;

(k) the Silva Employment Agreement and the Morgan Employment Agreement duly executed by Buyer;

(k) the Parent Closing Certificate; and

(l) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Seller, as may be required to give effect to this Agreement.

3.4 Termination. This Agreement may be terminated only by (a) the mutual written consent of the Parties, (b) upon a material breach of this Agreement by either Party after giving the other Party written notice and ten (10) business days to cure the breach, or (c) automatically as of February 28, 2015, in the event that the Closing does not occur, unless extended by the mutual written consent of the Parties.

3.5 Effect of Termination. In the event of the termination of this Agreement in accordance with Section 3.4, this Agreement shall immediately become void and there shall be no liability on the part of any Party hereto except:

(a) in the event that the Agreement is terminated as a result of a material breach, the breaching Party shall be liable for such breach;

(b) as set forth in Section 3.4, Section 6.7 and Article IX hereof; and

(c) that nothing herein shall relieve any Party from liability for any intentional breach of any provisions hereof.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

As a material inducement to Buyer’s willingness to enter into and perform this Agreement, except as set forth in the Disclosure Schedule, Seller represents and warrants to Buyer that the following statements are true and correct as of the date hereof:

4.1 Organization of Seller. Seller is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of New Jersey.

4.2 Organization of Company. Company is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware and has full power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted.

4.3 Authority of Seller. This Agreement has been duly executed and delivered by Seller. No other company proceedings on the part of Seller are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement is a valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as may be affected by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally or by rules of law governing specific performance, injunctive relief or other equitable principles (regardless of whether such principles are considered in a proceeding at law or in equity).

4.4 No Conflicts; Consents. The execution, delivery and performance by Seller of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not:

(a) Conflict with or result in a violation or breach of, or default under, any provision of the organizational documents of Seller;

(b) Except as set forth in Section 4.4 of the Disclosure Schedule, conflict with or result in a violation or breach of any provision of any Law applicable to Seller that would result in a Material Adverse Effect;

(c) Except as set forth in Section 4.4 of the Disclosure Schedule, require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any Contract to which Seller is a party or by which Seller is bound that would result in a Material Adverse Effect; or

(d) Result in the creation or imposition of any Encumbrance other than a Permitted Encumbrance.

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(e) To Seller’s Knowledge, other than as set forth in Section 4.4 of the Disclosure Schedule, no consent, approval, Permit, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

4.5 Financial Statements.

(a) Seller has previously delivered or made available to Buyer the audited financial statements of Seller consisting of the balance sheet as of December 31 in each of the years 2011, 2012, and 2013 and the related statements of income and cash flow for the years then ended (the “Audited Financial Statements”) and interim financial statements consisting of the balance sheet of Seller as at October 31, 2014 and the related statements of income for the ten-month period then ended (the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial Statements”). The Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) at year end and to the best of Seller’s Knowledge are true, correct, complete, and not misleading.

(b) The Financial Statements are complete and correct and have been prepared from and substantially conform to the books and records of the Business and present fairly in all material respects the financial condition and results of operations of the Business as of the dates they were prepared and the result of operations of the Business for the periods indicated.

4.6 Undisclosed Liabilities. Except as set forth in Section 4.6 of the Disclosure Schedule, Seller has no Liabilities with respect to the Business, except (a) those which are adequately reflected or reserved against in the Business Financial Statements as of October 31, 2014, (b) those which have been incurred in the ordinary course of business consistent with past practice since October 31, 2014, and which are not, individually or in the aggregate, in excess of $5,000, and (c) those which are subject to normal and recurring year-end adjustments which are not material in amount or effect.

4.7 Absence of Certain Changes, Events and Conditions. Since October 31, 2014, and except as listed on Section 4.7 of the Disclosure Schedule, none of the following has occurred, except that which would not have a Material Adverse Effect:

(a) material change in any method of accounting or accounting practice for the Business, except as otherwise required by applicable law or pursuant to GAAP;

(b) entry into any Material Contract except in the ordinary course of business;

(c) incurrence, assumption or guarantee of any indebtedness for borrowed money in connection with the Business in an aggregate amount exceeding $10,000;

(d) transfer, assignment, sale, lien, or other disposition of any asset of the Business except in the ordinary course of business;

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(e) cancellation of any debts or claims or amendment, termination or waiver of any rights except in the ordinary course of business;

(f) transfer, assignment or grant of any license or sublicense of any material rights under or with respect to any of the Intellectual Property;

(g) material damage, destruction or loss, or any material interruption in use, of any assets of the Business, whether or not covered by insurance;

(h) grant of any bonuses, whether monetary or otherwise, or any general wage or salary increases in respect of any Employees, other than as provided for in any preexisting written agreements or consistent with past practice, or change in the terms of employment for any Employee;

(i) loan to, or entry into any other transaction with, any member, manager or employee of Seller;

(j) any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing;

(k) any material change in the way in which the Business has been operated;

(l) any material change in the ability of Seller to franchise the Business; or

(m) any asserted or threatened material claim or any asserted or threatened material action against the Business by any Person or Governmental Authority which is not set forth in detail in the Disclosure Schedule.

4.8 Material Contracts.

(a) Section 4.8 of the Disclosure Schedule lists each of the following Contracts to which Seller is a party or by which it is bound in connection with the Business, excluding the contracts executed in association with this Agreement (such Contracts listed or otherwise disclosed in Section 4.8 of the Disclosure Schedule and all Contracts relating to the Intellectual Property set forth in Section 4.10(c) and Section 4.10(e) of the Disclosure Schedule, being “Material Contracts”):

(i) Contracts involving aggregate consideration in excess of $5,000 and which, in each case, cannot be cancelled without penalty or without more than 30 days’ notice;

(ii) Contracts that require Seller to purchase or sell a stated portion of the requirements or outputs of the Business or that contain “take or pay” provisions;

(iii) Contracts that provide for the indemnification of any Person or the assumption of any tax, or other Liability of any Person;

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(iv) Contracts that relate to the acquisition or disposition of any business, a material amount of stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise);

(v) Broker, distributor, dealer, manufacturer’s representative, franchise, agency, sales promotion, market research, marketing consulting and advertising Contracts;

(vi) Agreements with independent contractors or consultants (or similar arrangements) which are not cancellable without penalty or without more than thirty (30) days’ notice;

(vii) Except for Contracts relating to trade receivables, all Contracts relating to indebtedness (including, without limitation, guarantees);

(viii) Contracts with any Governmental Authority;

(ix) Contracts that limit or purport to limit the ability of Seller to compete in any line of business or with any Person or in any geographic area or during any period of time;

(x) Joint venture, partnership or similar Contracts;

(xi) Contracts for the sale of any of the assets of the Business or for the grant to any Person of any option, right of first refusal or preferential or similar right to purchase any of the assets of the Business;

(xii) Powers of attorney with respect to the Business;

(xiii) Collective bargaining agreements or Contracts with any labor organization, union or association;

(xiv) Franchise agreements and any agreement, modifying or cancelling any franchise; and

(xv) other Contracts that are material to the operation of the Business as it is currently conducted and not previously disclosed pursuant to this Section 4.8(a).

(b) Each Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or, to Seller’s Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has occurred that, to Seller’s Knowledge, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been provided or made available to Buyer. Except as set forth in Section 4.8(b) of the Disclosure Schedule, there are no disputes pending or, to Seller’s Knowledge, threatened under any Material Contract.

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4.9 Sufficiency of Assets. The tangible personal property that will be owned or leased by the Company as of the Closing Date is sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as currently conducted, provided that no cash or cash equivalents will be transferred to the Company, which may impact the conduct of the Business.

4.10 Intellectual Property.

(a) Section 4.10(a) of the Disclosure Schedule lists all (i) Intellectual Property Registrations and (ii) Intellectual Property Assets that are not registered but that are material to the operation of the Business. All required filings and fees related to the Intellectual Property Registrations, the lack of which would have a Material Adverse Effect, have been timely filed with and paid to the relevant Governmental Authorities and authorized registrars, and all registrations relating to the Intellectual Property Registrations, the lack of which would have a Material Adverse Effect, are otherwise in good standing. Seller has provided Buyer, to Buyer’s satisfaction at the time of Closing, with true and complete copies of file histories, documents, certificates, office actions, correspondence and other materials related to all Intellectual Property Registrations.

(b) Seller owns and the Company will own as of the Closing Date all right, title and interest in and to the Intellectual Property Assets, free and clear of Encumbrances. Without limiting the generality of the foregoing, as of the Closing Date, Seller will have entered into binding, written agreements with every current and former employee of Seller, and with every current and former independent contractor who worked on or with Intellectual Property Assets, whereby such employees and independent contractors (i) assign to Company any ownership interest and right they may have in the Intellectual Property Assets; and (ii) acknowledge Company’s exclusive ownership of all Intellectual Property Assets. Seller is as and as of the Closing Date Company will be, to Seller’s Knowledge, in full compliance with all legal requirements applicable to the Intellectual Property Assets and Seller and Company’s ownership and use thereof.

(c) Section 4.10(c) of the Disclosure Schedule lists all Intellectual Property Licenses. Seller has made available to or provided Buyer with true and complete copies of all such Intellectual Property Licenses. All such Intellectual Property Licenses are valid, binding and enforceable against the parties thereto, and the parties are in full compliance with the terms and conditions of such Intellectual Property Licenses.

(d) The Intellectual Property Assets and Intellectual Property licensed under the Intellectual Property Licenses as currently or formerly owned, licensed or used by Company and the conduct of the Business as currently and formerly conducted by Seller and proposed to be conducted by Company have not, do not and will not, to Seller’s Knowledge, infringe, violate or misappropriate the Intellectual Property of any Person. Seller has not received any written communication, and no Action has been instituted, settled or, to Seller’s Knowledge, threatened that alleges any such infringement, violation or misappropriation.

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(e) Section 4.10(e) of the Disclosure Schedule lists all licenses, sublicenses and other agreements pursuant to which Seller has granted rights or authority to any Person with respect to any Intellectual Property Assets. Seller has made available to or provided Buyer with true and complete copies of all such agreements. All such agreements are valid, binding and enforceable between parties thereto, and such parties are, to Seller’s Knowledge, in full compliance with the terms and conditions of such agreements, and, to Seller’s Knowledge, no Person has infringed, violated or misappropriated, or is infringing, violating or misappropriating, any Intellectual Property Assets.

4.11 Suppliers. Section 4.11 of the Disclosure Schedule sets forth (i) each supplier to whom Seller has paid consideration for goods or services rendered in an amount greater than or equal to $5,000 for the period between July 1, 2014, and October 31, 2014 (collectively, the “Material Suppliers”); and (ii) the amount of purchases from each Material Supplier during such period.

4.12 Legal Proceedings.

(a) Other than as set forth in Section 4.12 of the Disclosure Schedule there are no Actions pending or, to Seller’s Knowledge, threatened, against or by Seller (a) relating to or affecting the Business, which if determined adversely to Seller would result in a Material Adverse Effect; or (b) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement; and no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such action.

(b) There are no outstanding and no unsatisfied judgments, penalties or awards against, relating to or affecting the Business.

4.13 Compliance with Laws; Permits. Except as set forth in Section 4.13 of the Disclosure Schedule:

(a) to Seller’s Knowledge, Seller and the Company are and as of the Closing Date will be, in compliance with all Laws applicable to the conduct of the Business as currently conducted or the ownership and use of its properties or assets.

(b) all Permits required for Company to conduct the Business as currently conducted, the lack of which would have a Material Adverse Effect, have been obtained by Seller and are valid and in full force and effect. All material fees and charges with respect to such Permits as of the date hereof have been paid in full. Section 4.13(b) of the Disclosure Schedule lists all current Permits issued to Seller which are related to the conduct of the Business as currently conducted, including the names of the Permits and their respective dates of issuance and expiration. To Seller’s Knowledge no event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Permit set forth in Section 4.13(b) of the Disclosure Schedule.

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(c) Seller’s franchise offering circulars (the “Offering Circulars”) and franchise agreements comply in all material respects with all Laws, statutes, rules, and regulations in each jurisdiction in which they have been used by Seller. The Offering Circulars, the form of franchise agreements used by Seller and a list of the states in which each has been used are set forth in Section 4.13(c) of the Disclosure Schedule. To Seller’s Knowledge, Seller has complied in all material respects with all applicable franchise laws in each state in which it has marketed or sold a franchise.

4.14 Employment Matters.

(a) Section 4.14 of the Disclosure Schedule contains a list of all persons who are Employees, consultants, or contractors of the Business as of the date hereof, and sets forth for each such individual the following: (i) name; (ii) title or position (including whether full or part time); (iii) hire date; (iv) current annual base compensation rate; (v) commission, bonus or other incentive-based compensation; and (vi) a description of the fringe benefits provided to each such individual as of the date hereof. As of the date hereof, all commissions and bonuses payable to Employees, consultants, or contractors of the Business for services performed on or prior to the date of Closing have been paid in full and there are no outstanding agreements, understandings or commitments of Seller with respect to any commissions, bonuses or increases in compensation. Company shall have the right, in its sole discretion, to employ, retain, or contract with any of the Employees. As of the Closing, no amount will be owed to any Employee, consultant, or contractor of the Business.

(b) Seller is not party to, or bound by, any collective bargaining or other Contract with a labor organization representing any of their respective Employees, and to Seller’s Knowledge, there are no labor organizations representing, purporting to represent or attempting to represent any Employee.

(c) To Seller’s Knowledge, Seller is and has been in compliance with all applicable Laws pertaining to employment and employment practices to the extent they relate to the Employees, except to the extent non-compliance would not result in a Material Adverse Effect. To Seller’s Knowledge, all individuals characterized and treated by Seller as consultants or contractors of the Business are properly treated as independent contractors under all applicable Laws.

(d) The representations and warranties set forth in this Section 4.14 are Seller’s sole and exclusive representations and warranties regarding employment matters.

4.15 Taxes. Except as set forth in Section 4.15 of the Disclosure Schedule:

(a) All Tax Returns with respect to the Business required to be filed by Seller for any period prior to Closing have been, or will be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all material respects. All Taxes due and owing by Seller (whether or not shown on any Tax Return) have been, or will be, timely paid.

(b) Seller has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any Employee, independent contractor, creditor or other party, and complied with all information reporting and backup withholding provisions of applicable Law.

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(c) No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of Seller.

(d) All deficiencies asserted, or assessments made, against Seller as a result of any examinations by any taxing authority have been fully paid.

(e) Seller has not been notified in writing of any pending Action by any taxing authority. To Seller’s Knowledge, there are no threatened Actions by any taxing authority.

(f) There are no Encumbrances for Taxes upon any of the assets of the Business nor, to Seller’s Knowledge, is any taxing authority in the process of imposing any Encumbrances for Taxes on any of the assets of the Business (other than for current Taxes not yet due and payable).

4.16 Brokers. Except as set forth in Section 4.16 of the Disclosure Schedule, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

4.17 Securities Law Matters.

(a) Seller is acquiring Buyer Membership Units and shares of Parent Stock for the purpose of investment and not with a view to distribution or resale thereof, except as to the distribution to members of Seller (“Seller Members”) following the Closing, which distribution shall comply with the Securities Act and any other applicable federal or state securities law. Seller shall only distribute Buyer Membership Units and shares of Parent Stock to those Seller Members who certify to Seller, or Seller determines, that they are an “Accredited Investor” as such term is defined under the Securities Act.^[1] Seller further represents that it is an Accredited Investor.

(b) Seller represents and warrants that it and each Seller Member who is an Accredited Investor has such business or financial expertise as to be able to protect its own interests in connection with an investment in the Buyer Membership Units or Parent Stock, as the case may be. Seller further represents that it has such knowledge and experience in financial and business matters that it and each of the Seller Members who are Accredited Investors is capable of evaluating the merits and risk of such investment.

(c) Seller acknowledges that Buyer and Parent have made available to it the opportunity to ask questions of and receive answers from Buyer’s and Parent’s management, including its officers and directors, concerning the business and financial condition of Buyer and Parent, and Seller has received such information about the business and financial condition of Buyer and Parent as it has requested. Seller understands that the Buyer Membership Units and Parent Stock are speculative investments, which involve a high degree of risk of loss of its entire investment.

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(d) Seller acknowledges that the Buyer Membership Units and Parent Stock are restricted and have not been registered under the Securities Act or any similar state securities law and that it must bear the economic risk of investment for an indefinite period of time. Seller further acknowledges that the Buyer Membership Units and Parent Stock may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act, unless pursuant to an exemption from registration under the Securities Act. In this regard, Seller represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and that neither Buyer, Parent nor any of their respective representatives has made any representation, warranty, or covenant whatsoever as to whether any such exemption is, or will become, available.

(e) No Seller Membership Unit or share of Parent Stock shall be distributed or otherwise transferred to any Member of Seller that is not an accredited investor.

4.18 Company Organizational Matters.

(a) The Company’s Articles of Organization are in the form attached hereto as Exhibit G.

(b) The Company’s Operating Agreement is in the form attached hereto as Exhibit H.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

As a material inducement to Seller’s willingness to enter into and perform this Agreement, Buyer and Parent hereby represent and warrant to Seller that:

5.1 Organization.

(a) Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of California, with all requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly licensed, authorized and qualified to do business and in good standing in the State of California.

(b) Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of California, with all requisite power and authority to own, lease and operate its properties and to carry on its business as it is now being conducted and is duly licensed, authorized and qualified to do business and in good standing in the State of California.

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5.2 Authority.

(a) This Agreement has been duly executed and delivered by Buyer and Parent. No other proceedings on the part of Buyer or Parent are necessary to authorize this Agreement or to consummate the transactions contemplated hereby.

(b) This Agreement is a valid and binding obligation of each of Buyer and Parent enforceable against each of Buyer and Parent in accordance with its terms, except as may be affected by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally or by rules of law governing specific performance, injunctive relief or other equitable principles (regardless of whether such principles are considered in a proceeding at law or in equity).

5.3 Buyer. Buyer has been formed solely for the purpose of engaging in the transactions contemplated hereby and prior to the date hereof has engaged in no other business activities and has incurred no liabilities or obligations other than as contemplated herein. Parent is the sole member of Buyer. All of the outstanding equity interests in Buyer are owned by Parent, free and clear of any Encumbrances. Buyer has no outstanding options, warrants, rights or other agreements pursuant to which any person other than Parent may acquire any equity security of Buyer. Buyer has not made and will not make an election to be taxed as an association without the consent of Seller or its assigns, which consent may be withheld for any or no reason.

5.4 Sufficient Funds. Buyer has and at the Closing will have immediately available funds sufficient to (i) pay the aggregate Closing Cash Consideration and any other payments contemplated in this Agreement due at Closing, (ii) pay all fees and expenses to be paid by Buyer related to the transactions contemplated by this Agreement and (iii) conduct the Business as currently conducted immediately following the Closing.

5.5 Compliance with Securities Laws. Each of Buyer and Parent has complied with all applicable federal and state securities laws in connection with any and all financing activities it has or is conducting in relation to the financing required to affect the transaction contemplated by this Agreement (the “Pre-Acquisition Financings”) and all disclosures contained in the offering documents delivered to investors participating in any such Pre-Acquisition Financings did not and will not contain any misstatements or omissions of a material fact that would make the disclosures misleading.

5.6 Ownership Interests of Buyer.

(a) Immediately following the Closing there will be 10,000 membership interests of Buyer issued and outstanding. The rights, preferences, privileges and restrictions of the membership interests of Buyer as agreed to by Seller and Parent are as stated in the Buyer Operating Agreement.

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(b) As of the date hereof there are no existing options, warrants, calls, rights (including conversion rights, preemptive rights, co-sale rights, rights of first refusal or other similar rights) or agreements to which Buyer is a party requiring the issuance, sale or transfer by Buyer of any Buyer Membership Units or any additional units of membership interest or other equity securities of Buyer or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase units of membership interest of Buyer or other equity securities of Buyer.

(c) All units of Buyer’s membership interests have been duly authorized and validly issued, and are fully paid and nonassessable and have been issued and granted in all material respects in compliance with all applicable securities laws. All units of Buyer membership interest which may be issued pursuant to the transactions contemplated hereby, when issued in accordance with the terms hereof, will be a membership interest that is duly authorized, validly issued, fully paid and nonassessable, free and clear of any Encumbrances created by Buyer (including restrictions on rights of disposition other than restrictions created under applicable securities laws) and not subject to any preemptive rights created by statute, the certificate of formation or the Buyer Operating Agreement or any Contract to which Buyer is a party or by which it is bound.

5.7 Capitalization of Parent.

(a) As of the date hereof, the authorized capital of Parent consists of 100,000,000 shares of common stock, of which 41,200,000 shares will be issued and outstanding as of the Closing. The rights, preferences, privileges and restrictions of the capital stock of Parent are as stated in Parent’s certificate of incorporation and its Bylaws.

(b) Except as set forth in the Silva Employment Agreement, as of the date hereof: (i) there are no existing options, warrants, calls, rights (including conversion rights, preemptive rights, co-sale rights, rights of first refusal or other similar rights) or agreements to which Parent is a party requiring the issuance, sale or transfer by Parent of any Parent Stock or any additional shares of capital stock or other equity securities of Parent or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock of Parent or other equity securities of Parent; and (ii) there are no outstanding stock appreciation, phantom stock, profit participation or similar rights issued by or through Parent with respect to Parent.

(c) All shares of Parent’s common stock have been duly authorized and validly issued, and are fully paid and nonassessable and have been issued and granted in all material respects in compliance with all applicable securities laws. All shares of Parent common stock which may be issued pursuant to the transactions contemplated hereby, when issued in accordance with the terms hereof, will be voting stock that is duly authorized, validly issued, fully paid and nonassessable, free and clear of any Encumbrances created by Parent (including restrictions on rights of disposition other than restrictions created under applicable securities laws) and not subject to any preemptive rights created by statute, the certificate of incorporation or bylaws of Parent or any Contract (except for the Silva Employment Agreement and this Agreement) to which Parent is a party or by which it is bound.

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5.8 Fees or Commissions. Buyer (including its officers, directors and employees) has not employed any broker, agent or finder or incurred any Liability for any brokerage fees, agent’s commissions or finder’s fee or similar obligation in connection with the transactions contemplated in this Agreement.

5.9 No Conflicts; Consents. The execution, delivery and performance by Buyer and Parent of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not:

(a) Conflict with or result in a violation or breach of, or default under, any provision of the Buyer Operating Agreement or any other organizational documents of Buyer or Parent;

(b) Conflict with or result in a violation or breach of any provision of any Law applicable to Buyer or Parent; or

(c) No consent, approval, Permit, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer or Parent in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

ARTICLE VI

CONDITIONS TO CLOSING; COVENANTS

6.1 Conditions to Obligation of Seller. The obligations of Seller to consummate the transactions in connection with the Closing are subject to satisfaction or waiver of the following conditions:

(a) The representations and warranties set forth in Article V above shall be true and correct in all respects at and as of the Closing (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on Buyer’s or Parent’s, as applicable, ability to consummate the transactions contemplated hereby;

(b) Each of Buyer and Parent shall have performed and complied with all of its agreements, covenants and conditions hereunder that are to be performed on or prior to the Closing;

(c) No action, suit, or proceeding shall be pending or threatened before any court or Governmental Authority or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of the transactions contemplated hereby, (ii) cause the transactions contemplated hereby to be rescinded following their consummation, or (iii) affect adversely the right of Buyer to own the Company Membership Units (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect), and no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any injunction, order, decree, ruling or other legal restraint or prohibition (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or prohibiting consummation of said transactions, except as disclosed;

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(d) All actions to be taken by each of Buyer and Parent in connection with the consummation of the transactions contemplated hereby and all certificates, instruments of assumption, instruments and other documents required to effect the transactions will be reasonably satisfactory in form and substance to Seller;

(e) Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of the conditions set forth in Section 6.1(a) and Section 6.1(b) have been satisfied (the “Buyer Closing Certificate”); and

(f) Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Parent, that each of the conditions set forth in Section 6.1(a) and Section 6.1(b) have been satisfied (the “Parent Closing Certificate”).

6.2 Conditions to Obligation of Buyer and Parent. The obligation of Buyer and Parent to consummate the transactions in connection with the Closing is subject to satisfaction or waiver of the following conditions:

(a) The representations and warranties set forth in Article IV above shall be true, correct, complete and not misleading in all material respects at and as of the Closing (except those representations and warranties that address matters only as of a specified date, which shall be true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be true and correct would not have a material adverse effect on Seller’s ability to consummate the transactions contemplated hereby and the information contained in all of the schedules and exhibits to this Agreement shall be true, correct, complete and not misleading in all material regards;

(b) Seller shall have performed and complied with all of their agreements, covenants and conditions hereunder that are to be performed on or prior to the Closing;

(c) No action, suit, or proceeding shall be pending or threatened before any court or Governmental Authority or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of the transactions contemplated hereby, (ii) cause the transactions contemplated hereby to be rescinded following their consummation, or (iii) affect adversely the right of Buyer to own the Company Membership Units (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect), and no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any injunction, order, decree, ruling or other legal restraint or prohibition (whether temporary, preliminary or permanent) which is then in effect and has the effect of making consummation of the transactions contemplated hereby illegal or prohibiting consummation of said transactions;

(d) All actions to be taken by Seller in connection with the consummation of the transactions contemplated hereby and all certificates, instruments of assumption, instruments and other documents required to effect the transactions will be reasonably satisfactory in form and substance to Buyer; and

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(e) Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of the conditions set forth in Section 6.2(a) and Section 6.2 (b) have been satisfied (the “Seller Closing Certificate”).

6.3 Public Announcements. Unless otherwise required by Law, neither Seller, Buyer nor Parent shall make any public announcements regarding this Agreement, the terms of this Agreement or the transactions contemplated by this Agreement without the prior written consent of the other Party. However, Buyer shall make a public announcement after Closing in a form substantially similar to Exhibit I. After Closing, Buyer may make such public announcements as it deems necessary to help develop the Business.

6.4 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other such transfer type Taxes and fees (including any penalties and interest) incurred in connection with the capital contribution and sale of the Company Membership Units hereunder shall be borne and paid equally by Seller and Buyer when due. Seller shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate with respect thereto as reasonably necessary).

6.5 Third Party Consents. To the extent that the rights of Seller under any Assigned Contract or Permit shall require the consent of any other party to be assigned to Buyer, Seller shall obtain such consents prior to closing. If Seller requires the commercially reasonable cooperation of Buyer to obtain such consent, Buyer shall provide same.

6.6 Further Assurances. Following the Closing, each of the Parties hereto shall, and shall cause their respective affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other documents to be delivered hereunder.

6.7 Confidentiality. For a period of five (5) years following the Closing Date, neither Seller nor any of its members, shall, directly or indirectly, disclose, divulge or make use of any trade secrets or other information of a business, financial, marketing, technical or other nature pertaining to the Business, except to the extent that (i) such information shall have become public knowledge other than by breach of this Agreement by Seller, (ii) disclosure of such information is required by law or legal process (but only after Seller has provided Buyer with reasonable notice and opportunity to take action against any legally required disclosure) or (iii) is independently developed by Seller without breach of this Agreement.

6.8 LVS Promissory Note. On or prior to the Closing Date, Seller shall pay to LVS & Associates, LLC the amount of Two Hundred Sixty-Five Thousand Dollars ($265,000) in full satisfaction of that certain Non-Negotiable Promissory Note, dated as of January 31, 2013, made by Seller in favor of LVS & Associates, LLC in the principal amount of Five Hundred Ninety Thousand Dollars ($590,000).

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6.9 No Issuance of Additional Parent Stock or Buyer Membership Units.

(a) Following the date hereof and through and including the Closing Date, except as set forth in the Silva Employment Agreement and pursuant to the transactions contemplated herein, Parent shall not issue any options, warrants, calls, rights (including conversion rights, preemptive rights, co-sale rights, rights of first refusal or other similar rights) or agreements to which Parent is a party requiring the issuance, sale or transfer by Parent of and shares of Parent Stock or any additional shares of capital stock or other equity securities of Parent or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of capital stock of Parent or other equity securities of Parent.

(b) Following the date hereof and through and including the Closing Date, except pursuant to the transactions contemplated herein, Buyer shall not issue any options, warrants, calls, rights (including conversion rights, preemptive rights, co-sale rights, rights of first refusal or other similar rights) or agreements to which Buyer is a party requiring the issuance, sale or transfer by Buyer of any Buyer Membership Units or any additional units of membership interest or other equity securities of Buyer or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase units of membership interest of Buyer or other equity securities of Buyer.

6.10 Tax Treatment of Transaction and Allocation of Purchase Price.

(a) All Parties agree to treat the transaction contemplated under this Agreement as a partial sale by Seller and purchase by Buyer of an undivided interest in the assets of the Company equal to seventy-four percent (74%) of the Company Membership Units and a contribution to the capital of Buyer under Section 721(a) of the Code of twenty-six percent (26%) of the Company Membership Units.

(b) Buyer and Seller recognize their mutual obligations pursuant to Section 1060 of the Code to timely file separate IRS Forms 8594 (and supplemental IRS Forms 8594, if required), with respect to the treatment as a sale of an undivided interest in the assets of the Business with each of their respective federal income Tax Returns and to comply with any similar provisions of state Law (the “Asset Acquisition Statements”). Accordingly, Buyer and Seller agree to cooperate in the preparation of the Asset Acquisition Statements for timely filing in each of their respective federal income Tax Returns and any applicable foreign, state or local Tax Return in accordance with a written statement (the “Statement of Allocation”) setting forth an allocation of the Purchase Price among the assets of the Business to be utilized on IRS Form 8594 (as applicable for each Statement of Allocation).

(c) On or before the 120th day after the Closing Date, Buyer shall prepare and deliver to Seller the proposed Statement of Allocation. If Seller approves the Statement of Allocation, then, unless otherwise prohibited by Law, all federal, state and local income Tax Returns of Buyer and Seller shall be filed consistently with the allocations made pursuant to the Statement of Allocation. If Seller does not approve the Statement of Allocation, Buyer and Seller shall make good faith efforts to agree on the allocation of the consideration among the Acquired Assets. If no agreement can be reached, Seller and Buyer shall prepare separate IRS Form 8594s.

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(d) All the Parties agree that each shall (i) be bound by the allocation set forth in the agreed upon Statement of Allocation determined in accordance with this Section 6.10, (ii) report the transaction to all Tax authorities for all Tax purposes in accordance with such allocation (including without limitation the filing of the IRS Forms 8594) and (iii) take no position inconsistent with such allocation in any proceeding before any Tax authority.

6.11 Exchange of Buyer Membership Units. Notwithstanding anything in this Agreement to the contrary, each of Parent and Buyer shall use commercially reasonable efforts to ensure that prior to the Parent going public due to an initial public offering or a merger initiation or consummation with a public company, Buyer shall be first merged with, or be acquired by the Parent (“Parent Merger”) as long as such transaction does not have a material adverse effect on Buyer or Parent. To the extent such transaction is possible with commercially reasonable efforts that does not have a materially adverse effect on Buyer or Parent, such transaction shall be done in a transaction that (i) qualifies as a tax free reorganization under section 368(a)(1) of the Code, and (ii) the Buyer Membership Units held by such Seller Members are exchanged for shares of the entity going public or the existing public company. The conversion shall be based upon the percentage of the Buyer held at the time of the transaction by Seller, adjusted by the dilution caused by any additional shares of the Parent issued between the time of the Closing and the time of the conversion, provided, that, subsequent to the Closing, no share of Parent Common stock shall be sold or transferred for less than $0.14 per share. Seller, or if Seller is no longer in legal existence, the Seller Members who hold Buyer Membership Units, agrees that it will reasonably cooperate in any such Parent Merger and that neither Seller nor any Seller Member who holds Buyer Membership Units will transfer any Membership Unit of Buyer to any Person who does not agree, in writing, to participate in any such Parent Merger. In the event of any such Parent Merger, it is agreed that a majority of interest in Buyer shall have drag-along rights with respect to all remaining members of Buyer. As used herein, the provisions of this Section shall also apply to any Buyer Membership Interest held in any escrow existing pursuant to Section 7.7 of this Agreement.

6.12 Dissolution of Seller. Seller shall not, and the Seller Members shall not cause Seller to, dissolve or liquidate during the thirty (30) month period following the Closing Date. Upon the expiration of such 30-month period and the dissolution and liquidation of Seller, Seller may assign any of its rights or obligations under this Agreement to the Seller Members.

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ARTICLE VII

INDEMNITY

7.1 Indemnity by Seller. Seller will indemnify, reimburse, defend and hold harmless Buyer and its subsidiaries, parents, officers and directors from and against and with respect to any and all demands, claims, actions, causes of action, assessments, fines, losses, damages, liabilities, interest, penalties, costs, and expenses (including, without limitation, reasonable legal fees and disbursements incurred in connection therewith) (“Losses”) resulting from, arising out of, relating to, or incurred by reason of any breach of any representation, warranty, covenant, or agreement of Seller contained in this Agreement or any agreement, certificate, instrument, or document executed and delivered by Seller pursuant hereto.

7.2 Indemnity by Buyer. Buyer will indemnify, reimburse, defend, and hold harmless Seller and its respective subsidiaries, members, officers and directors from and against and with respect to any and all Losses suffered, incurred or sustained by any of them or to which any of them becomes subject, resulting from, arising out of or relating to any breach of any representation, warranty, covenant, or agreement of Buyer contained in this Agreement or any agreement, certificate, instrument, or document executed and delivered by Buyer pursuant hereto.

7.3 Method of Asserting Claims. The Party making a claim under this Article VII is referred to as the “Indemnified Party” and the Party against whom such claims are asserted under this Article VII is referred to as the “Indemnifying Party”.

(a) Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other legal proceeding made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a representative of the foregoing (a “Third Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in good faith in such defense. In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 7.3(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party shall have the right, at its own cost and expense, to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party may, subject to Section 7.3(b), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available (subject to the provisions to Section 6.8) records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.

(b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed), except as provided in this Section 7.3(b). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense pursuant to Section 7.3(a), it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

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(c) Direct Claims. Any claim by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim. During such 30-day period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Indemnified Party’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such 30-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

7.4 Tax Treatment of Indemnification Payments. All indemnification payments made by Seller under this Agreement shall be treated by the Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

7.5 Limitations.

(a) Notwithstanding the foregoing in this Article VII, the Parties shall not be liable under this Article VII for any Losses unless and until the aggregate amount of Losses incurred or suffered by the Indemnified Party for which the Indemnified Party is entitled to recovery under this Agreement exceeds an aggregate of Fifty Thousand Dollars ($50,000), at which point the Indemnifying Party shall be liable for all Losses.

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(b) The aggregate amount of all Losses for which the Indemnified Party shall be liable pursuant to Section 7.1 or Section 7.2, as the case may be, shall not exceed One Million Dollars ($1,000,000) and shall be subject to Section 7.7 below.

(c) Payments by an Indemnifying Party pursuant to Section 7.2 or Section 7.3 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party in respect of any such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any Losses prior to seeking indemnification under this Agreement.

(d) In no event shall any Indemnifying Party be liable to any Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.

(e) Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.

7.6 Exclusive Remedy. Subject to Section 9.8, the Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud on the part of a Party hereto in connection with the transactions contemplated by this Agreement and claims for equitable relief made with respect to breaches of any covenant or agreement contained in this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article VII. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their affiliates and each of their respective representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this Article VII subject to the exceptions set forth in the first sentence of this Section 7.6. Nothing in this Section 7.6 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 9.8 or to seek any remedy on account of fraud or criminal activity by any party hereto.

7.7 Sole Source of Recovery. Buyer and Parent’s sole source of recovery for any amount to which Buyer or Parent claims to be entitled from Seller, including any amounts that may be owed under this Article VII or otherwise (except for claims based upon fraud), and subject to the limitations of Section 7.5(a) and Section 7.5(b), shall be solely satisfied as follows: (i) First, Buyer shall be entitled to set off against amounts otherwise payable by Parent to Seller under Section 2.3(b) pursuant to the terms of the Deferred Payment Note I until all amounts, reduced to present value, due thereunder are paid in full or exhausted as a result of indemnity claims (such offset shall be self-executed upon a claimed indemnity) and (ii) Second, from the Escrow Amount, pursuant to the terms of the Escrow Agreement to be entered into by and among Seller, Buyer and Escrow Agent, substantially in the form attached hereto as Exhibit J (the “Escrow Agreement”); provided, that any amounts paid to Buyer from the Escrow Amount in satisfaction of Seller’s obligations under this Article VII must first be in the form of cash and once the cash in the Escrow Amount is exhausted, in the form of Buyer Membership Units. On or prior to July 23, 2016, Seller and Buyer shall jointly instruct the Escrow Agent to deliver the certificates representing the Buyer Membership Units to Seller and to distribute the cash balance of the Escrow Amount to one or more bank accounts designated by Seller within such instruction. If the Escrow Agent receives from Buyer, prior to July 23, 2016, one or more notices that Buyer has made one or more indemnity claims based on an allegation of fraud or otherwise, then the Escrow Agent shall be instructed not distribute the portion of the Escrow Amount that is the subject of such claim(s) until the Escrow Agent shall receive a joint instruction from Buyer and Seller in respect thereof or an order of a court of competent jurisdiction that Buyer is not entitled to indemnification or an award for damages in connection with such claim(s).

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ARTICLE VIII

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

8.1 Nature and Survival of Representations. All representations and warranties of Seller, Parent and Buyer made in this Agreement will survive the Closing Date and shall remain in full force and effect for eighteen (18) months following the Closing.

8.2 Post-Closing Survival. None of the covenants or other agreements contained in this Agreement shall survive the Closing Date other than those which by their terms contemplate performance after the Closing Date, and each such surviving covenant and agreement shall survive the Closing for the period contemplated by its terms.

ARTICLE IX

MISCELLANEOUS

9.1 Amendment or Supplement; Waiver. This Agreement may only be amended or supplemented by mutual written agreement of the Parties hereto. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver with respect to any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

9.2 Expenses. Each Party hereto will bear and pay all costs and expenses incurred by it in connection with the transactions contemplated in this Agreement, including fees and expenses of its own brokers, financial consultants, accountants and counsel.

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9.3 Entire Agreement. This Agreement (including all exhibits and schedules attached hereto), and the Closing documents being executed herewith contain the entire agreement between the Parties with respect to the transactions contemplated hereunder and supersede all prior arrangements or understandings with respect thereto, written or oral, other than documents referred to herein. The terms and conditions of this Agreement will inure to the benefit of and be binding upon the Parties hereto and their respective successors. Nothing in this Agreement, expressed or implied, is intended to confer upon any party, other than the Parties hereto and their respective successors, any rights, remedies, obligations or liabilities.

9.4 Assignment. None of the Parties hereto may assign any of its rights or obligations under this Agreement to any other person (except as otherwise specifically provided herein), except that Buyer may assign all its rights and obligations hereunder to any of its subsidiaries without any other Party’s consent, but such assignment by Buyer will not relieve it of its obligations for the ultimate performance thereof.

9.5 Notices. All notices and other communications which are required or permitted hereunder will be in writing and sufficient if delivered personally (with written confirmation of receipt), sent by facsimile, sent via electronic mail, sent via registered mail or sent by a nationally recognized overnight express service addressed as follows:

If to Buyer or Parent:	Muscle Maker Brands, LLC.
	Attn: Tim M. Betts
	18818 Teller Avenue, Suite 115
	Irvine, CA 92612
With a copy to:	Lawrence I. Washor, Esq.
	21800 Oxnard Street, Suite 790
	Woodland Hills, CA 91367
If to Seller:	Muscle Maker Franchising, LLC.
	Attn: Robert Morgan
	15 Prospect Lane, Suite 2AB
	Colonia, NJ 07067
With a copy to:	Wiggin and Dana LLP
	Attn: Dean T. Fournaris, Esq.
	Two Liberty Place
	50 S. 16th Street, Suite 2925
	Philadelphia, PA 19102

or at such other address as Buyer, Parent or Seller may designate by ten (10) days advance written notice to the other Party hereto. The copies to Messrs. Washor and Fournaris do not constitute notice but must be sent to perfect notice on the parties.

9.6 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of California

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9.7 Submission to Jurisdiction. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF CALIFORNIA IN EACH CASE LOCATED IN THE COUNTY OF ORANGE, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

9.8 Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

9.9 Captions. The captions contained in this Agreement are for reference purposes only and are not part of this Agreement.

9.10 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

9.11 Counterparts/Electronic Signatures. This Agreement may be executed in any number of counterparts, and each such counterpart will be deemed to be an original instrument, but all such counterparts together will constitute but one agreement. Signatures transmitted via facsimile, ..pdf or other electronic transmission will constitute original signatures.

9.12 Exhibits and Schedules. All exhibits and schedules (including the Disclosure Schedule) attached to this Agreement are incorporated into this Agreement by reference.

[Remainder of page intentionally left blank. Signature page follows.]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed effective as of the day and year first above written.

MUSCLE MAKER BRANDS, LLC
By:	/s/ Tim Betts
Name:	Tim Betts
Title:	Manager
MUSCLE MAKER, INC.
By:	/s/ Tim Betts
Name:	Tim Betts
Title:	President
MUSCLE MAKER FRANCHISING, LLC
By:	/s/ Rodney Silva
Name:	Rodney Silva
Title:	Chairman and Managing Member
MMF TARGET, LLC
By: Muscle Maker Franchising, LLC, its sole member
By:	/s/ Rodney Silva
Name:	Rodney Silva
Title:	Chairman and Managing Member

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EX1A-6 MAT CTRCT

API AND DATA LICENSE AGREEMENT

This API and Data License Agreement (“Agreement”) applies to your access to, and use of, the content, documentation, code, data and related materials made available by Direct Transfer, LLC. (“Direct Transfer”) to you (collectively, the “Content”), including through the use of the Direct Transfer application programming interface (the “API”, together with Content, “Direct Transfer Materials”). By using any Direct Transfer Materials, you agree to this Agreement.

1. Description, Licenses, and Restrictions

1.1 Direct Transfer Services and API. Direct Transfer has created, owns and maintains proprietary tools and technology, negotiated third- party integrations, and has operational processes to provide certain back-end tools, technology, and compliance management services to persons conducting, managing and/or advising technology-driven capital raises via offerings of debt and/or equity securities (the “Service” or “Services”). The Direct Transfer API consists of programmatic web APIs, interface definitions, generated code libraries and associated tools and documentation that allow you to create software application(s) or website(s) (“Application”), which will create, read, update or delete certain content from the online platform of Direct Transfer (“Platform”), including but not limited to activities as it relates to the act of creating a shareholder (the “Content”).

1.2 Developer API Keys. In order to utilize the API, you must be granted a unique API key from Direct Transfer that associates an offering to a unique clickinvest key. You will be issued one or more unique security keys, tokens, passwords and/or other credentials (collectively, “Keys”), for accessing the Platform and managing your account. You may only access the Platform with the Keys issued to you by Direct Transfer. Access may not always be available. You may not sell, transfer, sublicense or otherwise disclose your Keys to any other party or use them with any other Application other than that for which you initially applied for it. You are responsible for maintaining the secrecy and security of your Keys. You are fully responsible for all activities that occur using your Keys, regardless of whether such activities are undertaken by you or a third party. You are responsible for maintaining up-to-date and accurate information (including a current email address and other required contact information) for your account. Direct Transfer may discontinue your access to the API if such contact information is not up-to-date and/or you do not respond to communications directed to such coordinates.

1.3 API Modifications. Direct Transfer reserves the right to modify the Service and the API, and to release subsequent versions of the API. You may be required to obtain and use the most recent version of the API in order to obtain functionality of your Application with the Service. The API is provided for a mutually agreed fee schedule herein attached, but Direct Transfer reserves the right to change fees associated with the API (or additional features or functionality therefor) in the future.

1.4 Prohibited Uses. The Direct Transfer API is made available to issuers in order to permit them to link to the Direct Transfer Platform for the purposes of processing investment information to the general public. Without limiting other restrictions in this Agreement, you agree that: (i) the API may not be used to create Applications that offer or promote services that may be damaging to, disparaging of or otherwise detrimental to Direct Transfer or its licensors, licensees, affiliates and partners; and (ii) the API may not be used for or to create Applications that transfer, display or use Content from Direct Transfer without the Application creating an additional or distinct benefit for Direct Transfer’s end users’ use of the Service.

1.5 Monitoring Use of the Direct Transfer API. You agree to provide us with access to your platform and/or other materials related to your use of the API as reasonably requested by us to verify your compliance with this Agreement. You agree that we may crawl or otherwise monitor your online platforms and you agree not to block or interfere with such efforts by Direct Transfer.

1.6 Usage Limitations. Direct Transfer may limit the number of network calls that your platform may make via the API, and/or the maximum file size, and/or the maximum Content that may be accessed, or anything else about the API and the Content it accesses as Direct Transfer deems appropriate, in its sole discretion; these limitations may on occasion be without notice. In addition, Direct Transfer may post usage limitations at the developer’s area of its web site, and change such usage limits at any time. In addition to its other rights under this Agreement, Direct Transfer may utilize technical measures to prevent over-usage and/or stop usage of the API by an Application after any usage limitations are exceeded.

1.7 Your Display of Content; Attribution and Goodwill You must clearly and conspicuously attribute the source of all Content as received from the Direct Transfer Service. Without limiting the foregoing, if your Application or the use of the Service requests a user to input a Direct Transfer username and password, your Application must clearly identify the Service (as more specifically provided in the Direct Transfer Branding and Trademark Usage Guidelines in order to use any Direct Transfer trademarks or service marks (“Trademark Guidelines”). You may not modify, obscure, delete or otherwise disable the functioning of links to the Service or Direct Transfer or third-party applications or websites, or change the resource associated with any link provided within any Content. Similarly, you may not modify, obscure or delete the text, images, artwork, logos, copyrights or similar proprietary notices or other aspects of any Content that you receive from the API, except that, with respect to graphic images, you may re-size such images while maintaining the same relative proportions of such image. If you display the Content in a way that Direct Transfer or, where applicable, a third-party provider of such Content to Direct Transfer, finds unacceptable for any reason, including if your display violates this Agreement or it disparages, damages, tarnishes or impairs the value, integrity or goodwill of the Content or its subjects or brands therein, Direct Transfer may require that you immediately change or cease your display of such Content. All Content transmitted by Direct Transfer in connection with your Application remains the property of the proper owners or licensors thereof. You acknowledge and agree that Direct Transfer has no obligation to, and does not, monitor the Content created by users of the Service.

1.8 Appropriate Conduct and Usage Restrictions. You agree that you are responsible for your own conduct while using the API and for any consequences thereof. You agree to use the API only for purposes that are legal, proper and in accordance with this Agreement, any Separate Agreement (as defined below) and any applicable policies or guidelines provided by Direct Transfer from time to time. In addition to the other restrictions contained in this Agreement, in particular those concerning appropriate use contained in Section 1.4 and the Direct Transfer Brands in Section 3.5, you agree that when using the API you will not, directly or indirectly, take or enable another to take any of the following actions:

1.8.1 interfere with or disrupt services or servers or networks connected to the Service, or disobey any requirements, procedures, policies or regulations of networks connected to the Service;

1.8.2 restrict or inhibit any user from using and enjoying the Service;

1.8.3 use the Service for any illegal or unauthorized purpose;

1.8.4 circumvent or modify any Keys or other security mechanism employed by Direct Transfer or the API;

1.8.5 request, collect, solicit or otherwise obtain access to sign-in names, passwords or other authentication credentials for Direct Transfer, other than by directing users to Direct Transfer in the mechanism specifically provided by the Direct Transfer API;

1.8.6 imply inaccurate creation, affiliation, sponsorship or endorsement of you or your Application as by Direct Transfer or of the Content as your own;

1.8.7 use any robot, spider, site search/retrieval application or other device to retrieve or index any portion of the Service or collect information about users for any unauthorized purpose;

1.8.8 create user accounts by automated means or under false or fraudulent pretenses;

1.8.9 transmit any viruses, worms, defects, Trojan horses or any items of a destructive nature; or

1.8.10 utilize the optical character recognition results or data obtained by submitting Content with images or PDF files to the Service for any independent purpose besides locating such Content among the notes within a Direct Transfer account.

1.9 Support. Direct Transfer has no obligation to provide you or your users with support, software upgrades, enhancements or modifications to the API (“Support”). You understand and agree that you are solely responsible for providing user support and any other technical assistance for your Application. Direct Transfer may redirect users and potential users of your Application to your email address on your account for purposes of answering general Application inquiries and support questions. If Direct Transfer elects at any time to provide Support, it shall be considered part of the Service for purposes of Section 7, and Direct Transfer may terminate the Support at any time without notice to you for any or no reason.

1.10 Escrow Agent. Direct Transfer shall not act as escrow for any funds raised by you. In the event you determine an escrow account is required for any activities undertaken by you under this Agreement pursuant to Securities and Exchange Commission Rule 15c2-4 or otherwise, Direct Transfer has established relationships with certain “banks” (as defined by Section 3(a)(6) of the Securities Exchange Act of 1934, as amended) set forth on Exhibit A hereto. Direct Transfer has provided each such “bank” a form of this Agreement and notified it you may be contacting it to enter into a separate agreement regarding an escrow account (a “Separate Agreement”).

2. Directory

2.1 Establishment. Direct Transfer may establish a directory of customers using the API and/or the platform resulting from issuers use of the API (a “Directory”). Whether or not you or your platform is included in such a Directory would be within Direct Transfer’s sole discretion.

2.2 Submission Requirements. Direct Transfer may establish a submission process with certain requirements in order to be included within such Directory, including additional information about and possibly an evaluation version of your Application (which would be provided to Direct Transfer free of any fees or subscriptions usually associated with the Application).

2.3 Trademark License. You hereby grant Direct Transfer a non-exclusive license to display the trade names, trademarks, service marks, logos, copyright notices, domain names and other distinctive brands associated with you and your Platform (the “Licensee Brands”) in accordance with this Agreement for the sole purposes of identifying your Application in the Directory and promoting or advertising your use of the API. Direct Transfer shall not intentionally modify or distort any Licensee Brands.

3. Proprietary Rights

3.1 Direct Transfer Property. As between you and Direct Transfer, Direct Transfer retains all right, title and interest, including without limitation all intellectual property rights, in and to, (i) the API and any and all elements and components thereof, including content, technology, software, code, user interfaces and any derivative works and/or compilations thereof; (ii) the Direct Transfer Brands, as defined in this Agreement and (iii) any feedback (including suggestions comments, improvements, ideas, etc.), about the Service, the Content, the API, or any applications Direct Transfer may be developing as discussed in Section 3.9 (collectively, the “Direct Transfer Property”).

3.2 License Grant. Subject to the terms and conditions in, and only during the term of, this Agreement, Direct Transfer grants you the limited, nonexclusive, revocable, non-sublicensable and non-transferable (except as provided in Section 12.7) license to access and use the API solely to develop, test, display, distribute and execute your Application; to access and display in your Application the Content obtained through the Service; and to allow others to access your Application. You will not, and will not permit any person, directly or indirectly, to (i) reverse engineer, disassemble, reconstruct, decompile, translate, modify, copy or, other than as explicitly permitted hereunder (except to the extent the foregoing restriction is expressly prohibited by applicable law notwithstanding this limitation), or (ii) create derivative works of the API or the Service, or any aspect or portion thereof, including without limitation, source code and algorithms. You shall not distribute or otherwise disseminate the API by any means or in any form, except as an integral part of your Application.

3.3 Government Restrictions. The API is “commercial computer software” and any associated documentation is “commercial computer software documentation,” pursuant to DFAR Section 227.7202 and FAR Section 12.212, as applicable. Any use, modification, reproduction, release, performance, display or disclosure of the API or such documentation by the United States Government shall be governed solely by the terms of this Agreement, except to the extent expressly permitted by the terms of this Agreement.

3.4 Export Controls. You shall comply with all applicable export and re-export control laws and regulations, including the Export Administration Regulations, the International Traffic in Arms Regulations and country-specific economic sanctions programs implemented by the Office of Foreign Assets Control in connection with your use of the API.

3.5 Brand License. Subject to the terms and conditions in, and during the term of, this Agreement, Direct Transfer grants you a limited, nonexclusive, revocable, non-sublicensable and non-transferable license to display the trade names, trademarks, service marks, logos, copyright notices, domain names and other distinctive brands of Direct Transfer (cumulatively, the “Direct Transfer Brands”) in accordance with this Agreement and the Trademark Guidelines and solely for attributing the source of the API and the Direct Transfer Service, and for the purpose of promoting or advertising that you use the API and in your resulting Application. All use by you of the Direct Transfer Brands (including any goodwill associated therewith) shall inure to the benefit of Direct Transfer.

3.6 Brand Protection. At no time during or after the term of this Agreement shall you challenge or assist others to challenge the Direct Transfer Brands (except to the extent such restriction is prohibited by law) or the registration thereof by Direct Transfer, nor shall you attempt to register any Direct Transfer Brands or brand identifiers (including domain names) that are confusingly similar in any way (including but not limited to, sound, appearance and spelling) to any of the Direct Transfer Brands.

3.7 Prohibitions. In using the Direct Transfer Brands pursuant to Section 3.5, you may not do the following (and for purposes of this Section “use” shall include any use or display of a Direct Transfer Brand):

3.7.1 use a Direct Transfer Brand in any manner that implies a relationship or affiliation with, sponsorship or endorsement by Direct Transfer, other than your licensed right to use the API;

3.7.2 use a Direct Transfer Brand in any manner that can be reasonably interpreted to suggest Content has been authored by or represents the views or opinions of Direct Transfer or Direct Transfer personnel;

3.7.3 use a Direct Transfer Brand to disparage Direct Transfer, its products or services;

3.7.4 use a Direct Transfer Brand in a way that tarnishes, dilutes or otherwise impairs the Direct Transfer Brands;

3.7.5 use a Direct Transfer Brand on your site if it contains or promotes illegal actions or activities;

3.7.6 use a Direct Transfer Brand as the largest or most prominent brand in your Application;

3.7.7 use a Direct Transfer Brand in a manner that is misleading, defamatory, infringing, libelous, disparaging, obscene or otherwise objectionable to Direct Transfer; or

3.7.8 remove, obscure, distort or alter any element of a Direct Transfer Brand.

3.8 Your Warranty, Ownership and License Grants. You represent and warrant that: (i) your Application and the Licensee Brands is your original work or was legally obtained; and (ii) our and our sublicensees’ and affiliates’ use of your Application and the Licensee Brands as permitted by the licenses granted herein will not violate any third party’s rights. Except to the extent your Application and its content contains Direct Transfer Property, Direct Transfer claims no ownership or control over your Application or the content sent, posted or displayed through your Application, or any of the Licensee Brands. During the term of this Agreement you hereby grant to us a paid-up, royalty-free, nonexclusive, worldwide, irrevocable right and license, under all of your intellectual property rights, to: (i) use, perform and display your Application (to the extent you have provided us the means to do so) and Licensee Brands; (ii) link to and direct users to your Application and (iii) sublicense the foregoing rights to our affiliates or any third parties that are working with us as development partners, hosting facilities and in similar capacities in order to enable them to perform their services for us. Following the termination of this Agreement and upon written request from you, Direct Transfer shall make commercially reasonable efforts, as determined in its sole discretion, to remove all references and links to your Application and any Licensee Brands from the Direct Transfer website and service. Direct Transfer shall have no other obligation to delete copies of, or references or links to, your Application.

3.9 Direct Transfer Application Development. You acknowledge and agree that Direct Transfer may be independently creating platforms, content and other products or services that may be similar to or competitive with your platform and its content, and nothing in this Agreement will be construed as restricting or preventing Direct Transfer from creating and fully exploiting such platforms, content and other items, without any obligation to you. If you elect to provide us with any Feedback you assign all right, title and interest in and to such Feedback to us, and acknowledge that we will be entitled to use, implement and exploit any such feedback in any manner without restriction, and without any obligation of confidentiality, attribution, accounting or compensation or other duty to account.

4. Privacy and Legal Compliance

4.1 Direct Transfer Privacy Policy. Direct Transfer ‘s collection and use of personal information from its customers, their visitors and is governed by Direct Transfer ‘s Privacy Policy, with the exception that Direct Transfer may reveal personal information about you as noted in this Agreement (e.g., for attribution purposes and handling inquiries from users or potential users). You understand and agree that Direct Transfer may access, preserve and disclose your contact information and your platform details if required to do so by law or in a good faith belief that such access, preservation or disclosure is reasonably necessary to comply with legal process or protect the rights, property and/or safety of Direct Transfer, its affiliates or partners, the Direct Transfer Service users or the general public.

4.2 Your Privacy Policy. For information you obtain from users of your Application, you will, at all times, maintain a high standard privacy policy reasonably consistent with Direct Transfer’s Privacy Policy. You must clearly post a link to your privacy policy at the point such information is collected. You agree to comply with your privacy policy in the collection, use and storage of such information.

4.3 User Passwords. If your Application runs as a “client” on a computer or mobile device owned by a Direct Transfer user, you: (i) may not store the user’s password on that device without consent from the user; (ii) may not transmit or store that password to any system other than the Direct Transfer service; (iii) must protect the password using the standard protection mechanism for the platform (the password MUST NOT be stored in cleartext); and (iv) must provide a mechanism for the user to log out, which must completely remove the username and password from your application and its persistent storage. If your Application runs as an Internet service on a multi-user server, you must not ask for, view, store or cache the sign-in name or password of Direct Transfer user accounts. Authorization to access the user’s account is only permitted via the “web service” authentication scheme in the API.

5. Publicity

You are free to promote your platform, including advertising in traditional and online media and communicating with your users about your offering, so long as you do so truthfully and without implying that your platform is created or endorsed in any manner by Direct Transfer (or otherwise embellishing your relationship with Direct Transfer). For example, you may factually state that your platform is “used with the Service” (during the term of this Agreement), provided that your use of any Direct Transfer Brands is in compliance with our guidelines. In addition, you must submit to us a copy or image of any media release or advertising you create including any Direct Transfer Brands, and we request that you provided us a copy of any other media release concerning your Application; these should be submitted via our website.

6. Indemnity

You agree to indemnify and hold Direct Transfer, its subsidiaries, affiliates, directors, officers, agents, employees, advertisers and partners harmless from and against any and all claims, liabilities, damages (actual and consequential), losses and expenses (including legal and other professional fees) arising from or in any way related to any third party claims relating to your use of the API, your Application, any violation of this Agreement or any other actions connected with your use of or interaction with, or the Application’s use of or interaction with, the Direct Transfer Service. In the event of such claim, we will provide notice of the claim, suit or action to the contact information we have for you, provided that any failure to deliver such notice to you shall not eliminate or reduce your indemnification obligation hereunder.

7. Disclaimer of Warranties

YOU EXPRESSLY UNDERSTAND AND AGREE THAT:

(a) YOUR USE OF THE API AND THE SERVICE IS AT YOUR SOLE RISK. THE API AND THE SERVICE ARE EACH PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY LAW, DIRECT TRANSFER EXPRESSLY DISCLAIMS ALL WARRANTIES AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

(b) DIRECT TRANSFER DOES NOT WARRANT THAT (i) THE API OR THE SERVICE WILL MEET ALL OF YOUR REQUIREMENTS; (ii) THE OPERATION OF THE API OR THE SERVICE WILL BE UNINTERRUPTED, TIMELY, SECURE OR ERROR-FREE, OR THAT KNOWN OR DISCOVERED ERRORS WILL BE CORRECTED; OR (iii) WILL PROVIDE RESULTS THAT ARE ACCURATE OR RELIABLE OR (iv) WILL MEET YOUR EXPECTATIONS.

(c) DIRECT TRANSFER IS NOT RESPONSIBLE FOR ANY CONTENT OR OTHER MATERIAL DOWNLOADED OR OTHERWISE OBTAINED THROUGH THE USE OF THE API OR THE SERVICE, ALL OF WHICH IS OBTAINED AT YOUR OWN DISCRETION AND RISK, AND YOU ACKNOWLEDGE AND AGREE THAT YOU WILL BE SOLELY RESPONSIBLE FOR ANY DAMAGE TO YOUR COMPUTER OR OTHER DEVICE OR LOSS OF DATA THAT RESULTS FROM THE DOWNLOAD AND/OR USE OF ANY SUCH MATERIAL.

(d) NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED BY YOU FROM DIRECT TRANSFER ‘S EMPLOYEES OR AGENTS, OR THROUGH OR FROM THE USE OF THE API OR SERVICE, SHALL CREATE ANY WARRANTY NOT EXPRESSLY STATED IN THIS AGREEMENT.

8. Limitation of Liability

YOU EXPRESSLY UNDERSTAND AND AGREE THAT DIRECT TRANSFER, ITS SUBSIDIARIES, AFFILIATES AND LICENSORS, AND OUR AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, SHALL NOT BE LIABLE TO YOU FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING BUT NOT LIMITED TO, DAMAGES FOR LOSS OF PROFITS, GOODWILL, USE, DATA, COVER OR OTHER INTANGIBLE LOSSES (EVEN IF DIRECT TRANSFER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES) RESULTING FROM: (i) THE USE OF OR THE INABILITY TO USE THE API; (ii) UNAUTHORIZED ACCESS TO, OR THE LOSS, CORRUPTION OR ALTERATION OF, YOUR APPLICATION, TRANSMISSIONS, CONTENT OR DATA; (iii) STATEMENTS OR CONDUCT OF ANY THIRD PARTY USING THE APPLICATION OR THE SERVICE; (iv) DIRECT TRANSFER ‘S ACTIONS OR OMISSIONS IN RELIANCE UPON YOUR ACCOUNT INFORMATION AND ANY CHANGES THERETO OR NOTICES RECEIVED THEREFROM; (v) YOUR FAILURE TO PROTECT THE CONFIDENTIALITY OF ANY PASSWORDS OR ACCESS RIGHTS TO YOUR ACCOUNT INFORMATION OR THE ACCOUNT INFORMATION OF ANY USER OF YOUR APPLICATION; (vi) THE ACTS OR OMISSIONS OF ANY THIRD PARTY USING THE APPLICATION OR THE SERVICE; (vii) THE TERMINATION OF AVAILABILITY OF THE API OR THIS AGREEMENT; OR (viii) ANY OTHER MATTER RELATING TO THE API.

9. Confidential Information

The term “Direct Transfer Confidential Information” means any information of or relating to Direct Transfer that becomes known to you through disclosure, observation or otherwise, and that either is designated as confidential by Direct Transfer or that is not generally known or readily ascertainable to the public, including, without limitation, nonpublic information regarding Direct Transfer ‘s API and Direct Transfer ‘s products, services, programs, features, data, techniques, technology, code, ideas, inventions, research, testing, methods, procedures, know-how, trade secrets, business and financial information and other activities. All Direct Transfer Confidential Information remains the property of Direct Transfer, and no license or other right in any Direct Transfer Confidential Information is granted hereby. You will not disclose any Direct Transfer Confidential Information to any third party, and will take all reasonable precautions to prevent its unauthorized dissemination, both during and after the term of this Agreement. If you are an organization, you will limit your internal distribution of Direct Transfer Confidential Information to your personnel and agents who have a need to know, and will take steps to ensure that dissemination is so limited. You will not use any Direct Transfer Confidential Information for the benefit of anyone other tha Direct Transfer. Upon Direct Transfer ‘s written request, you will destroy or return to Direct Transfer all Direct Transfer Confidential Information in your custody or control. In addition to the terms of this provision, you and Direct Transfer will continue to be subject to any nondisclosure agreement that you and Direct Transfer have entered into separately. This provision will survive any termination of this Agreement.

10. Term and Termination

10.1 Term. You agree that this Agreement shall be deemed to be in effect upon the date on which you connect to the API, link your key, or successfully login to active your platform, for a period of 1 year.

10.2 Direct Transfer Termination. Direct Transfer may change, suspend or discontinue the availability of the API, or the functioning of the API with the Service, at any time and without advance notice. Furthermore, Direct Transfer may limit, suspend or terminate your use of the API (and your rights under this Agreement) at any time. In addition, this Agreement shall terminate automatically and without notice immediately upon any breach of the terms of this Agreement by you.

10.3 Your Termination. You may terminate this Agreement (subject to Section 10.6) for any reason or no reason at all, at your convenience, by ceasing your use of the API.

10.4 Refusal of Certain Applications. Direct Transfer shall have the right, in its sole discretion, to refuse to permit your use of the API with a particular Platform. Unless Direct Transfer states otherwise, such rejection will not terminate this Agreement with respect to any other Application. Direct Transfer shall have no liability to you for such refusal.

10.5 Effect of Termination. Upon the termination of this Agreement for any reason the rights granted to you herein, including all licenses to the API and Direct Transfer brands shall terminate. Neither party shall be liable to the other party for damages of any sort resulting solely from the termination of this Agreement.

10.6 Survival. Notwithstanding any termination of this Agreement, Sections 3.1, 3.6, 3.9, 4.1, 5 and 6, 7, 8, 9, 10.5, 10.6, 10.7 and 11 shall continue to apply and survive termination.

10.7 Remedies. You acknowledge that your breach of this Agreement may cause irreparable harm to Direct Transfer, the extent of which would be difficult to ascertain. Accordingly, you agree that, in addition to any other remedies to which Direct Transfer may be legally entitled, Direct Transfer shall have the right to seek immediate injunctive relief in the event of a breach of this Agreement by you or any of your officers, employees, consultants or other agents.

11. Fees

11.1 Refer to Exhibit B herein.

12. Miscellaneous

12.1 This Agreement constitutes the entire agreement between you and Direct Transfer and governs your use of the API, except and then only to the extent that you have entered into a Separate Agreement. If, through accessing or using the API or the Service, you utilize or obtain any product or service from a third party, you may additionally be subject to such third party’s terms and conditions applicable thereto, and this Agreement shall not affect your legal relationship with such third party.

12.2 You acknowledge and agree that each affiliate of Direct Transfer shall be a third-party beneficiary to this Agreement and that such other parties shall be entitled to directly enforce, and rely upon, any provision of this Agreement which confers a benefit on (or provides rights in favor of) them. Other than this, no other person or company shall be a third-party beneficiary to this Agreement.

12.3 This Agreement and the relationship between you and Direct Transfer shall be governed by the laws of the State of North Carolina without regard to its conflict of law provisions. You and Direct Transfer agree to submit to the personal and exclusive jurisdiction of the courts located within the county of Wake, North Carolina. Notwithstanding this, you agree that Direct Transfer shall still be allowed to apply for injunctive remedies (or an equivalent type of urgent legal relief) in any applicable jurisdiction.

12.4 The failure or delay by Direct Transfer to exercise or enforce any right or provision of this Agreement or rights under applicable law shall not constitute a waiver of any such provisions or rights. If any provision of this Agreement is found by a court of competent jurisdiction to be invalid, the parties nevertheless agree that the court should endeavor to give effect to the parties’ intentions as reflected in the provision, and the other provisions of the Agreement remain in full force and effect.

12.5 You agree that regardless of any statute or law to the contrary, any claim or cause of action you may have arising out of or related to use of the Service or otherwise under this Agreement must be filed within one (1) year after such claim or cause of action arose or you hereby agree to be forever barred from bringing such claim.

12.6 The section headings in this Agreement are for convenience only and have no legal or contractual effect.

12.7 You may not assign or transfer your rights or obligations under this Agreement, except that both you and Direct Transfer may assign this Agreement to a third party into which it has merged or which has otherwise succeeded to all or substantially all of its business and assets to which this Agreement pertains, by purchase of stock, assets, merger, reorganization or otherwise, and which has assumed in writing or by operation of law its obligations under this Agreement.

Signature Page to follow

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year below written.

COMPANY

Date: February 20, 2017

Company Name: MUSCLE MAKER, INC

Signatory Name: Robert E. Morgan

Signature: /s/ Robert E. Morgan

Title: Chief Executive Officer

SERVICE PROVIDER

Date: February 24, 2017

Company Name: Direct Transfer LLC.

Signatory Name: Brain R. Balbirnie

Signature: /s/ Brian R. Balbirnie

Title: Chief Executive Officer

EXHIBIT A

Regions Bank

EXHIBIT B

Click Invest API/Platform

Test the Waters Platform	$	1,500.00	One-time
Click Invest Platform	$	1,000.00	One-time
SubDoc Builder	$	500.00	One-time
Investor onboarding	$	5.00	Per investor
AML - Domestic	$	2.00	Per investor
AML - International	$	65.00	Per investor
ACH	$	1.50	Per Instance
Wire (inbound/outbound)	$	25.00	Per Instance

EX1A-8 ESCW AGMT

FORM OF SUBSCRIPTION ESCROW AGREEMENT

(REGULATION A OFFERING)

SUBSCRIPTION ESCROW AGREEMENT (the “Agreement”) executed this ______ day of ___________ , 2017 (“Effective Date”) by and between Muscle Maker, Inc, a California corporation (the “Issuer”), and REGIONS BANK, an Alabama banking corporation, as escrow agent (“Escrow Agent”).

RECITALS

WHEREAS, the Issuer proposes to offer for sale to investors as disclosed in its offering statement on Form 1-A (the “Offering Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) shares of its Common Stock (the “Securities”) pursuant to Tier 2 of Regulation A under the Securities Act of 1933, as amended (the “Offering”), in the maximum amount of $20,000,000 (the “Maximum Offering Amount”).

WHEREAS, the Issuer desires to establish an escrow account (“Escrow Account”), a segregated non-interest bearing bank account, with the Escrow Agent, an FDIC insured bank, in which funds (“Subscription Funds”) received from a prospective investor (each, a “Subscriber” and collectively, “Subscribers”) for the purchase of Securities pursuant to the terms and conditions of a Subscription Agreement with the Issuer (the “Subscription Agreement”) will be held during the course of the Offering, subject to the terms and conditions of this Agreement.

WHEREAS, Escrow Agent agrees to serve as escrow agent and establish the Escrow Account for purpose of holding the Subscription Funds received during the course of the Offering, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt of which is acknowledged by each of the parties hereto, the Issuer and the Escrow Agent hereby agree as follows:

1. DEFINITIONS. In addition to the terms defined above, the following terms shall have the following meanings when used herein:

“Cash Investment” shall mean the number of Securities to be purchased by any Subscriber multiplied by the offering price per Security as set forth in the Offering document.

“Cash Investment Funds” shall mean funds submitted by Subscribers, while subscribing on Direct Transfer’s online platform, by wire transfer, electronic funds transfer via ACH, or major credit card to the Escrow Account maintained by the Escrow Agent in full payment for the Securities to be purchased by any Subscriber pending their respective closings.

“Direct Transfer” shall mean Direct Transfer, LLC, a wholly owned subsidiary of Issuer Direct Corp, a Delaware corporation.

“Escrow Funds” shall mean the funds deposited into the Escrow Account with the Escrow Agent pursuant to this Agreement.

“Subscription Accounting” shall mean an accounting of all subscriptions for Securities received and accepted by Issuer as of the date of such accounting, indicating for each subscription the Subscriber’s name, social security number and address, the number and total purchase price of subscribed Securities, the date of receipt by Issuer of the Cash Investment Funds, and notations of any nonpayment of the Cash Investment Funds submitted with such subscription, any withdrawal of such subscription by the Subscriber, any rejection of such subscription by Issuer, or other termination, for whatever reason, of such subscription. The purpose of the Subscription Accounting is to provide Escrow Agent with an accurate listing of each Subscriber up to and until such time as the closing of the subscriptions by the Subscribers (which closings will be on a rolling basis throughout the Offering) and funds are disbursed to the Issuer in accordance with Section 8 of this Agreement.

“Subscriber” shall mean any individual or entity who, with full knowledge and understanding of the risks associated with the Offering, delivers to the Issuer funds for the purpose of making a Cash Investment in connection with the Offering.

2. APPOINTMENT OF ESCROW AGENT. The Issuer does hereby appoint the Escrow Agent as escrow agent for the purposes described herein.

3. ACCEPTANCE OF APPOINTMENT BY ESCROW AGENT. The Escrow Agent does hereby accept the appointment as escrow agent and agrees to act on the terms and conditions described herein.

4. NO ENDORSEMENT. THE ISSUER UNDERSTANDS THAT THE ESCROW AGENT, BY ACCEPTING THE APPOINTMENT AND DESIGNATION AS ESCROW AGENT HEREUNDER, IN NO WAY ENDORSES THE MERITS OF THE OFFERING OF THE SECURITIES. THE ISSUER AGREES TO NOTIFY ANY PERSON ACTING ON ITS BEHALF THAT THE ESCROW AGENT’S POSITION AS ESCROW AGENT DOES NOT CONSTITUTE SUCH AN ENDORSEMENT, AND TO PROHIBIT SAID PERSONS FROM THE USE OF THE ESCROW AGENT’S NAME AS AN ENDORSER OF SUCH OFFERING. The Issuer further agrees to include with any sales literature, in which the Escrow Agent’s name appears and which is used in connection with the Offering, a statement to the effect that the Escrow Agent in no way endorses the merits of the Offering.

5. ESCROW PERIOD. The Escrow Period shall begin on the Qualification Date and shall terminate in whole or in part upon the earlier to occur of the following:

a. The first to occur of (i) the maximum offering amount being raised or (ii) 18-months from the qualification date or;

b. Within fifteen (15) days from the date upon which a determination is made by Issuer to terminate the Offering prior to closing.

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During the Escrow Period, the parties agree that (i) Escrow Account and escrowed funds will be held for the benefit of the Subscribers, and that (ii) the Issuer is not entitled to any funds received into escrow, and that no amounts deposited into the Escrow Account shall become the property of Issuer or any other entity, or be subject to any debts, liens or encumbrances of any kind of Issuer or any other entity, until the Issuer has triggered closing of such funds (which closings will be on a rolling basis throughout the Offering). Even after the sale of Securities to investors, the Issuer may elect to continue to leave funds in the Escrow Account in order to protect investors as needed.

In addition, Issuer and Escrow Agent acknowledge that the total funds raised cannot exceed the Maximum Offering Amount of the Offering permitted by the Offering Statement. Issuer represents that no funds have yet been raised for the Issuer. The parties acknowledge and agree that all funds received by the Escrow Agent from a Subscriber in the Offering will be deposited in the Escrow Account established by the Escrow Agent.

6. INVESTORS PROCEDURES FOR SUBSCRIBING. If an investor decides to subscribe for shares of common stock in this Offering, they will be instructed as follows:

Go to www.musclemakergrill.com, click on the “Invest Now” button and follow the procedures as described.

a. Electronically receive, review, execute and deliver to us a subscription agreement; and

b. Deliver funds directly by wire, electronic funds transfer via ACH., or by major credit card to the Escrow Account described on Exhibit A hereto maintained by Escrow Agent (“Deposit”).

Direct Transfer will provide the Escrow Agent with a Subscription Accounting associated with each Deposit as well as results from background checks (anti-money laundering, USA PATRIOT Act, social security number issues, etc.) conducted by Direct Transfer.

The Muscle Maker website will redirect interested investors via the “Invest Now” button to a site operated by Direct Transfer, where investors can receive, review, execute and deliver subscription agreements electronically and deliver funds directly to the Escrow Account described on Exhibit A hereto maintained by Escrow Agent for deposit.

7. DEPOSITS INTO THE ESCROW ACCOUNT. Escrow Agent shall process all Escrow Amounts for collection through the banking system and shall maintain an accounting of each deposit posted to its ledger, which also sets forth, among other things, each Subscriber’s name and address, the quantity of Securities purchased, and the amount paid. All monies so deposited in the Escrow Account and which have cleared the banking system are hereinafter referred to as the “Escrow Amount.” As required by government regulations pertaining to the US Treasury, Homeland Security, the Internal Revenue Service and the SEC, federal law requires financial institutions to obtain, reasonably verify and record information that identifies each person (natural person or legal entity, including its authorized persons) who funds and executes securities transactions. Direct Transfer shall be responsible for conducting background checks (anti-money laundering, USA PATRIOT Act, social security number issues, etc.) on Subscribers and providing such results to the Escrow Agent in connection with the Escrow Agent processing the funds from such Subscribers. Information requested by Direct Transfer of the Issuer and Subscribers will be typical information requested in the gathering and verification guidelines and best practices promulgated by anti-money laundering (“AML”) rules and regulations and those regulatory agencies that enforce them. Escrow Agent is under no duty or responsibility to enforce collection of any wire or ACH delivered to it hereunder.

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If any Subscription Agreement for the purchase of Securities is rejected by the Issuer in its sole discretion, then the Subscription Agreement and the Escrow Amount for such Subscriber shall be returned to the rejected Subscriber by the Escrow Agent within fifteen (15) business days from the date of rejection by the Issuer.

Escrow Agent reserves the right to deny, suspend or terminate participation in the Escrow Account of any Subscriber to the extent Escrow Agent deems it advisable or necessary to comply with applicable laws or to eliminate practices that are not consistent with securities industry laws, rules, regulations or best practices. Escrow Agent may at any time reject or return funds to any Subscriber (i) that do not clear background checks (anti-money laundering, USA PATRIOT Act, social security number issues, etc.) conducted by Direct Transfer to the satisfaction of Direct Transfer, in its sole and absolute discretion, or, (ii) for which Escrow Agent determines, in its sole discretion, that it would be improper or unlawful for Escrow Agent to accept or hold the applicable Subscriber’s funds, as Escrow Agent, due to, among other possible issues, issues with the Subscriber or the source of the Subscriber’s funds. Escrow Agent shall promptly inform Issuer of any such return or rejection.

ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS ACCORDING TO THEIR RESPECTIVE INTERESTS IN THEIR CASH INVESTMENT AND SHALL NOT BE SUBJECT TO ANY LIEN OR CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS’ CLAIMS AGAINST ISSUER UNTIL RELEASED OR ELIGIBLE TO BE RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 8(a) HEREOF.

8. DISBURSEMENTS OF ESCROW FUNDS.

a. In the event Escrow Agent does not receive written instructions from the Issuer to release funds from Escrow on or prior to the termination of the Escrow Period, Escrow Agent shall terminate Escrow and make a full and prompt return of funds so that refunds are made to each Subscriber in the exact amount received from said Subscriber, without deduction, penalty, or expense to Subscriber. In the event Escrow Agent receives cleared funds prior to the termination of the Escrow Period and Escrow Agent receives a written instruction from Issuer, Escrow Agent shall, pursuant to those instructions, distribute funds from such Escrow Amount pursuant to the instructions of Issuer. The Escrow Agent shall effect such transfer by the close of business on the date the Escrow Agent receives the written instruction from the Issuer; provided, however if the Escrow Agent receives the written instruction from the Issuer after 2 pm Eastern Time, then the Escrow Agent shall effect such transfer by the close of business the on the next succeeding business day. Issuer’s written instructions to Escrow Agent shall certify that all conditions set forth in the Offering Statement for release of funds have been met for a closing of the Offering and include a schedule of deductions from the Escrow Account for any funds for management and offering and selling expenses, including without limitation, any process fees incurred by the Escrow Agent, from the gross proceeds of the Escrow Account prior to remitting such funds, if and when due, to Issuer. Escrow Agent is hereby directed to remit such funds as directed by Issuer directly to the appropriate parties, if any, to which they are due. Net proceeds (meaning gross proceeds less amounts remitted pursuant to Issuer’s instructions certain parties), will then be remitted to Issuer as described above.

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No later than fifteen (15) business days after receipt by Escrow Agent of written notice (i) from Issuer that Issuer intends to reject a Subscriber’s subscription, (ii) from Issuer that there will be no closing of the sale of Securities to Subscribers, (iii) from any federal or state regulatory authority that any application by Issuer to conduct a banking business has been denied, or (iv) from the Securities and Exchange Commission or any other federal or state regulatory authority that a stop or similar order has been issued with respect to the Offering document and has remained in effect for at least twenty (20) days, Escrow Agent shall pay to the applicable Subscriber(s), by certified or bank check and by first-class mail, the amount (without any interest) of the Cash Investment paid by such Subscriber.

9. SUSPENSION OF PERFORMANCE OR DISBURSEMENT INTO COURT. If, at any time, (i) there shall exist any dispute between Issuer, Escrow Agent, any Subscriber or any other person with respect to the holding or disposition of all or any portion of the Escrow Funds or any other obligations of Escrow Agent hereunder, or (ii) if at any time Escrow Agent is unable to determine, to Escrow Agent’s sole satisfaction, the proper disposition of all or any portion of the Escrow Funds or Escrow Agent’s proper actions with respect to its obligations hereunder, or (iii) if Issuer has not within 30 days of the furnishing by Escrow Agent of a notice of resignation pursuant to Section 14 hereof appointed a successor Escrow Agent to act hereunder, then Escrow Agent may, in its sole discretion, take either or both of the following actions:

a. suspend the performance of any of its obligations (including without limitation any disbursement obligations) under this Escrow Agreement until such dispute or uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until a successor Escrow Agent shall have been appointed (as the case may be).

b. petition (by means of an interpleader action or any other appropriate method) any court of competent jurisdiction in any venue convenient to Escrow Agent, for instructions with respect to such dispute or uncertainty, and to the extent required or permitted by law, pay into such court all funds held by it in the Escrow Funds for holding and disposition in accordance with the instructions of such court.

Escrow Agent shall have no liability to Issuer, any Subscriber or any other person with respect to any such suspension of performance or disbursement into court, specifically including any liability or claimed liability that may arise, or be alleged to have arisen, out of or as a result of any delay in the disbursement of the Escrow Funds or any delay in or with respect to any other action required or requested of Escrow Agent.

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10. ESCROW FUND. All Cash Investments received by the Issuer in connection with the sale of the Securities shall be deposited with the Escrow Agent. The Escrow Agent shall hold, maintain and secure the Escrow Funds subject to the terms, conditions and restrictions herein described. Escrow Agent shall release Escrow Funds only in accordance with the instructions as set forth in Exhibit A, or as otherwise expressly set forth in this Agreement. The Issuer understands and agrees that all funds received by Escrow Agent are subject to collection requirements of presentment and final payment, and that the funds represented thereby cannot be drawn upon or disbursed until such time as final payment has been made and is no longer subject to dishonor. Upon receipt of funds, Escrow Agent shall process payments by wire transfer, electronic funds transfer via ACH, and major credit card for collection and the proceeds thereof shall be held as part of the Escrow Funds until disbursed in accordance with Exhibit A hereof. Any Subscriber funds which fail to clear or are subsequently reversed, including but not limited to ACH charge-backs, wire recalls or credit card charge-backs or recalls, shall be debited to the Escrow Account, with such debits reflected on the escrow ledger. Any and all fees paid by Issuer for funds receipt and processing are non-refundable, regardless of whether ultimately cleared, failed, rescinded, returned or recalled. In the event of any Subscriber refunds, returns or recalls after funds have already been remitted to Issuer, then Issuer hereby irrevocably agrees to immediately and without delay or dispute send equivalent funds to Escrow Agent to cover the refund, return or recall. If Issuer has any dispute or disagreement with its Subscriber then that is separate and apart from this Agreement and Issuer will address such situation directly with said Subscriber, including taking whatever actions necessary to return such funds to Subscriber, but Issuer shall not involve Escrow Agent in any such disputes.

11. INVESTMENT OF ESCROW FUND. The Escrow Amount shall be deposited in the Escrow Account in accordance with Section 7 and held uninvested in the Escrow Account, which shall be non-interest bearing. All parties agree to maintain the Escrow Account and escrowed funds in a manner that is compliant with SEC Rules 10b-9 and 15c2-4, promulgated under the Securities Exchange Act of 1934, as amended.

12. LIABILITY OF ESCROW AGENT. Escrow Agent shall have no liability or obligation with respect to the Escrow Funds except for Escrow Agent’s willful misconduct or gross negligence. Escrow Agent’s sole responsibility shall be for the safekeeping, investment, and disbursement of the Escrow Funds in accordance with the terms of this Escrow Agreement. Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein or in a written notice provided hereunder. Escrow Agent may rely upon any instrument, not only as to its due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein which Escrow Agent shall in good faith believe to be genuine, to have been signed or presented by the person or parties purporting to sign the same and to conform to the provisions of this Escrow Agreement. In no event shall Escrow Agent be liable for incidental, indirect, special, consequential or punitive damages. Escrow Agent shall not be obligated to take any legal action or commence any proceeding in connection with the Escrow Funds or any account in which Escrow Funds are deposited or this Escrow Agreement, or to appear in, prosecute or defend any such legal action or proceeding. Without limiting the generality of the foregoing, Escrow Agent shall not be responsible for or required to enforce any of the terms or conditions of any subscription agreement with any Subscriber or any other agreement between Issuer, Agent and/or any Subscriber. Escrow Agent shall not be responsible or liable in any manner for the performance by Issuer or any Subscriber of their respective obligations under any subscription agreement nor shall Escrow Agent be responsible or liable in any manner for the failure of Issuer, Agent or any third party (including any Subscriber) to honor any of the provisions of this Escrow Agreement. Escrow Agent may consult legal counsel selected by it in the event of any dispute or question as to the construction of any of the provisions hereof or of any other agreement or of its duties hereunder, and shall incur no liability and shall be fully protected from any liability whatsoever in acting in good faith in accordance with the opinion or instruction of such counsel. Issuer shall promptly pay, upon demand, the reasonable fees and expenses of any such counsel.

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The Escrow Agent is authorized, in its sole discretion, to comply with orders issued or process entered by any court with respect to the Escrow Funds, without determination by the Escrow Agent of such court’s jurisdiction in the matter. If any portion of the Escrow Funds is at any time attached, garnished or levied upon under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property or any part thereof, then and in any such event, the Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree which it is advised by legal counsel selected by it is binding upon it without the need for appeal or other action; and if the Escrow Agent complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person or entity by reason of such compliance even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated.

13. RIGHTS AND DUTIES OF ESCROW AGENT. This Agreement shall represent the entire understanding of the parties hereto, and the Escrow Agent shall only be required to perform the duties expressly described herein, and no further duties shall be implied from this Agreement or any other written or oral agreement by and between the Escrow Agent, and the Issuer made previous or subsequent to this Agreement, unless such written amendment to this Agreement is executed by all parties to this Agreement. The Escrow Agent may rely upon any written instructions believed in good faith to be genuine when signed and presented by the requesting party and shall not have a duty to inquire or investigate the validity of any such written instruction. The Escrow Agent shall not be required to solicit funds from the Issuer in connection with this Agreement. The Escrow Agent shall be permitted to execute any and all powers under this Agreement directly or through its agents and/or attorneys, and shall be allowed to seek counsel from any professional regarding the performance of this Agreement, which professionals shall be selected at the sole discretion of the Escrow Agent. Should the Escrow Agent receive conflicting directions or become uncertain as to its duties under this Agreement, it shall be permitted (a) to immediately abstain from further action until such duties are expressly defined in writing by the parties hereto, and shall only be required to protect and keep the Escrow Funds uninvested until such time as a written agreement among the parties is executed or a court of competent jurisdiction shall render an order directing further action, or (b) to petition any court of competent jurisdiction (by means of an interpleader action or other appropriate action) for instructions regarding such uncertainty, and pay all Escrow Funds into such court for holding and disposition. Upon release of Escrow Funds to a court as provided in the preceding sentence or as set forth in Exhibit A hereto, Escrow Agent shall be fully released from any and all further obligations, except for the provision of written notice to the other parties to this Agreement, setting forth in such notice the date of release of the Escrow Funds, the party to whom released, the amount released and a statement setting forth Escrow Agent’s release from further obligations to any other party to this Agreement.

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14. RESIGNATION AND SUCCESSION OF ESCROW AGENT. The Escrow Agent may resign and be discharged of all duties and obligations under this Agreement by providing ten (10) days written notice of such resignation to the Issuer. If no successor escrow agent shall have been named by the Issuer at the expiration of the ten (10) day notice period, the Escrow Agent shall have no further obligations hereunder except to hold the Escrow Funds as a depository. Upon notification by the Issuer of the appointment of a successor escrow agent, the Escrow Agent shall promptly deliver the Escrow Funds and all materials and instruments in its possession which relate to the Escrow Funds to such successor, and the duties of the resigning Escrow Agent shall terminate in all respects, and it shall be released and discharged from all further obligations herein. Any merger, consolidation or the purchase of all or substantially all of the Escrow Agent’s corporate assets resulting in a new corporate entity shall not be considered a successor for the purposes of this Agreement, and the Escrow Funds shall be transferred to such entity without written consent or further action under this Agreement.

15. TERMINATION OF ESCROW AGENT. The Escrow Agent may be discharged from its duties under this Agreement upon thirty days (30) written notice from the Issuer and upon the payment of any and all costs and fees due to Escrow Agent. In such event, the Escrow Agent shall be entitled to rely upon written instructions from the Issuer as to the disposition and delivery of the Escrow Funds. Upon thirty (30) days after receipt of such written notice of termination, if no successor has been named, the Escrow Agent shall immediately cease further action under this Agreement and shall have no further obligations hereunder except to hold the Escrow Funds as a depository.

16. TAXES. The Issuer represents that its Federal Tax Identification Number listed in Exhibit A is true and correct, and will notify the Escrow Agent in writing immediately upon any change to such number. The Issuer grants to the Escrow Agent a right of set-off which may be exercised to pay any and all taxes, whether federal, state or local, incurred by the investment of the Escrow Funds. The Issuer will indemnify and hold harmless the Escrow Agent against and in respect to liability for taxes and/or any penalties or interest attributable to the investment of Escrow Funds by Escrow Agent pursuant to this Agreement. For purposes of federal income taxes and other taxes based on income, the Issuer will be treated as owner of the Escrow Funds unless and until such time as any portion of the Escrow Funds is returned to its Subscriber.

17. FEES. Issuer shall also agree to pay compensation for the services rendered by the Escrow Agent under this Agreement. Compensation for services rendered by the Escrow Agent shall be paid per the instructions set forth on Exhibit B, and Issuer agrees to pay or reimburse the Escrow Agent for all expenses and disbursements, including attorney’s fees and expenses, incurred in connection with the preparation, execution, performance, delivery, modification or termination of this Agreement.

18. INDEMNIFICATION OF ESCROW AGENT. The Issuer shall indemnify, defend and hold harmless the Escrow Agent and its directors, officers, agents and employees from all loss, liability or expense arising from the execution and/or performance of this Agreement or the undertaking of any instructions from the Issuer, except for any loss which has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of the Escrow Agent, and such indemnification shall include attorney’s fees and expenses. The Escrow Agent’s right of indemnification shall survive the resignation or termination of the Escrow Agent and the termination of the duties described in this Agreement. The Issuer further grants the Escrow Agent a right of set-off and a security interest against the Escrow Funds for the payment of any claim for indemnification, expenses or compensation due hereunder.

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19. NOTICES. All communications, notices and instructions required herein shall be in writing and shall be deemed to have been duly given if delivered by hand or first class, registered mail, return receipt requested, postage prepaid, by overnight courier or by facsimile or electronic transmission, if followed by letter and affirmative confirmation of receipt is received (such facsimile or electronic transmission notice to be effective on the date such affirmative confirmation of receipt is received), and addressed as follows:

(a)	If to Escrow Agent:	Regions Bank
		Corporate Trust Department
		Odell Romeo
		1180 West Peachtree Street NW, Suite 1200
		Atlanta, GA 30309
		Odell.Romeo@regions.com
		404-581-3729

(b)	If to Issuer:	Muscle Maker, Inc
		2200 Space Park Drive, Suite 310
		Houston, Texas 77058
		Phone: (732) 669-1200
		Attn: Robert E. Morgan, Chief Executive Officer
		MRem1@aol.com
		732-669-1200

With a copy to:	Legal & Compliance, LLC
	330 Clematis Street, Suite 217
	West Palm Beach, FL 33401
	Attn: Laura Anthony, Esq.
	lantohony@legalandcompliance.com
	561-514-0936

In the event the Escrow Agent shall receive such written instructions and shall determine pursuant to its sole discretion that verification of such instructions shall be required, then the Escrow Agent shall be permitted to seek confirmation of such instructions by way of telephone contact to the author of such written instructions. Verification of the instructions by the purported author of the instructions called at the telephone number placed on the instructions shall serve to verify such instructions.

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20. ASSIGNMENT. This Agreement shall not be assignable absent written consent of the parties hereto. Any assignment absent written consent shall be deemed void ab initio, except that the merger or acquisition of all or substantially all the assets of the parties shall not require written consent, but shall require written notice to all the parties hereto. Notwithstanding the foregoing, all covenants contained in this Agreement by or on behalf of the parties hereto shall bind and inure to the benefit of such parties and their respective heirs, administrators, legal representatives, successors and assigns.

21. MODIFICATION OF AGREEMENT. This Agreement shall constitute the complete and entire understanding of the parties hereto, and shall supersede any and all prior agreements between or among them. The provisions of this Agreement shall not be waived, modified, amended, altered or supplemented, in whole or in part, except by a writing signed by all the parties hereto.

22. CHOICE OF LAW. This Agreement shall be governed and construed in accordance with the laws of the State of Alabama. The parties further waive any right to a trial by jury with respect to any judicial proceeding arising out of occurrences related to this Agreement.

23. FORCE MAJEURE. No party to this Agreement shall be liable to any other party for losses arising out of, or the inability to perform its obligations under the terms of this Agreement, due to acts of God, which shall include, but shall not be limited to, fire, floods, strikes, mechanical failure, war, riot, nuclear accident, earthquake, terrorist attack, computer piracy, cyber-terrorism or other acts beyond the control of the parties hereto.

24. EXECUTION. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but such counterparts together shall constitute one and the same instrument. The effective date of this Agreement shall be the date it is executed by the last party to do so.

25. SEVERABILITY. If any provision of this Agreement or the application thereof to any party or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

26. USE OF REGIONS NAME. No party to this Agreement shall, without prior written consent of the Escrow Agent, publish or print or cause to be published or printed any printed or other material in any language, including prospectuses, notices, reports, internet web sites and promotional material, which mentions “Regions Bank” by name or logo or the rights, powers, or duties of the Escrow Agent under this Agreement.

27. EXHIBITS. The Exhibits attached hereto are by this reference incorporated into this Agreement and made a part hereof.

28. REPRESENTATIVES. The applicable persons designated on Exhibit “A” hereto have been duly appointed to act as its representatives hereunder and have full power and authority to execute and deliver any written directions, to amend, modify or waive any provision of this Agreement and to take any and all other actions on behalf of the Issuer, as applicable, under this Agreement, all without further consent or direction from, or notice to, it or any other party.

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29. USA PATRIOT ACT. No party to this Agreement is (or will be) a person with whom Escrow Agent is restricted from doing business with under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury of the United States of America (including, those persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons. Direct Transfer shall be responsible for conducting background checks (anti-money laundering, USA PATRIOT Act, social security number issues, etc.) on Subscribers and providing such results to the Escrow Agent in connection with the Escrow Agent processing the funds from such Subscribers. In addition, the Issuer and Depositor hereby agree to provide to Escrow Agent any additional information that Escrow Agent deems necessary from time to time in order to ensure compliance with all applicable laws concerning money laundering and similar activities. The following notification is provided to the Issuer and Depositor pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318 (“Patriot Act”): IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product. In the event the Issuer or the Depositor violates any of the provisions of the USA Patriot Act and the regulations thereunder, such event shall constitute a default hereunder and shall entitle the Escrow Agent to exercise all of its rights and remedies at law or in equity, including but not limited to terminating this Escrow Agreement.

30. ILLEGAL ACTIVITIES. Escrow Agent shall have the rights in its sole discretion to not accept appointment as escrow agent and reject funds and collateral from any party in the event that Escrow Agent has reason to believe that such funds or collateral violate applicable banking practices or applicable laws or regulations, including but not limited to the Patriot Act. In the event of suspicious or illegal activity and pursuant to all applicable laws, regulations and practices, the other parties to this Agreement will assist Escrow Agent and comply with any reviews, investigations and examinations directed against the deposited Escrow Funds.

31. SECURITY PROCEDURES. In the event funds transfer instructions are given (other than in writing at the time of execution of this Escrow Agreement, as indicated in Schedule 1 attached hereto), whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated in Section 17 hereto, and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized representatives identified in Section 17, the Escrow Agent is hereby authorized to seek confirmation of such instructions by telephone call-back to any one or more of your executive officers, (“Executive Officers”), which shall include the titles of Chief Executive Officer and Principal Financial Officer, as the Escrow Agent may select. Such “Executive Officer” shall deliver to the Escrow Agent a fully executed Incumbency Certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer. The Escrow Agent and the beneficiary’s bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Purchaser or the Seller to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary bank. The Escrow Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number, even when its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an intermediary bank designated. The parties to this Escrow Agreement acknowledge that these security procedures are commercially reasonable.

[Signatures on Following Page]

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IN WITNESS WHEREOF, the parties hereto have executed this Subscription Escrow Agreement as of the date first written above.

REGIONS BANK,
As Escrow Agent
By:
Name:	Odell Romeo
Its:	Vice President
ISSUER
MUSCLE MAKER, INC
By:
Name:	Robert E. Morgan
Its:	Chief Executive Officer

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Schedule 1

[Insert wire transfer instructions here.]

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Exhibit A

1. Issuer Federal Employer Identification Number:

Issuer
Representative:	The following individuals are hereby appointed as representative of the Issuer under the Escrow Agreement:

Name:	Robert E. Morgan (Chief Executive Officer) Specimen Signature: ___________________________
Name:	Timothy M. Betts (Chairman of the Board) Specimen Signature: __________________________

2. Definitions. “Expiration Date” means              , 2017.

3.	Escrow Account:
	Regions Bank
	ABA# 062005690
	AC Name: Wealth Management Operations
	AC#
	FFC Name:
	FFC#
	ATTN: Odell Romeo
4.	Termination and Disbursement. In the event there is any termination or failure of the offering pursuant to Sections 6b or 6c of the Escrow Agreement, the Escrow Agent shall, in accordance with the Offering document and as directed in writing by the Issuer, pay as soon as practicable to the applicable Subscriber(s), by certified or bank check and by first-class mail, the amount of each Subscriber’s Cash Investment without interest.

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Exhibit B

Fee Schedule

These fees are based upon our current understanding of our duties under of the above-referenced agreement. Regions Bank reserves the rights to adjust its fees should its duties change under the agreement.

CLOSING FEE:	$	300
Due upon last closing of the Offering
ADMINISTRATION FEE:	$	7,000.00
Due in advance at launch
TRANSACTION FEES:
Wire fee:		Waived
Check Disbursement:
Return Subscription Deposit to Subscribers:		$10.00 each
LEGAL FEES:		None

The Administrative Fee is payable upon execution of the escrow documents. In the event the escrow is not funded, the Administrative Fee will not be refunded. All other fees, if any, will be billed to the client in arrears.

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EX1A-11 CONSENT

Independent Registered Public Accounting Firm’s Consent

We consent to the inclusion in this Offering Statement of Muscle Maker, Inc. and Subsidiaries (the “Company”) on Form 1-A of our report dated March 30, 2017, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audits of the consolidated financial statements of Muscle Maker, Inc. and Subsidiaries, as of December 31, 2015 and 2014 and for the period from January 23, 2015 through December 31, 2015 (the Successor period) and the period from January 1, 2015 through January 22, 2015 and for the year ended December 31, 2014 (the Predecessor periods), which report appears in the Offering Circular, which is part of this Offering Statement. We also consent to the reference to our Firm under the heading “Experts” in such Offering Circular.

/s/ Marcum llp

Marcum llp

New York, NY

March 30, 2017

EX1A-12 OPN CNSL

EXHIBIT 12.1

LEGAL& COMPLIANCE, LLC

LAURA ANTHONY, ESQ. LAZARUS ROTHSTEIN, ESQ. CHAD FRIEND, ESQ., LLM MARC S. WOOLF, ESQ. OF COUNSEL: JOHN CACOMANOLIS, ESQ. CRAIG D. LINDER, ESQ. PETER P. LINDLEY, ESQ., CPA, MBA STUART REED, ESQ. WWW.LEGALANDCOMPLIANCE.COM WWW.SECURITIESLAWBLOG.COM WWW.LAWCAST.COM DIRECT E-MAIL: LANTHONY@LEGALANDCOMPLIANCE.COM

March 30, 2017

Muscle Maker, Inc

2200 Space Park Drive, Suite 310

Houston, Texas 77058

Re: Muscle Maker, Inc Offering Statement on Form 1-A

Ladies and Gentlemen:

We have acted as securities counsel to Muscle Maker, Inc (the “Company”), in connection with the preparation and filing with the Securities and Exchange Commission of a Regulation A Offering Statement on Form 1-A (the “Offering Statement”) relating to the offer by the Company of up to 10,000,000 shares of the Company’s common stock, no par value per share, for a purchase price of $2.00 per share (the “Shares”).

This opinion letter is being delivered in accordance with the requirements of Item 17(12) of Form 1-A under the Securities Act of 1933, as amended.

In connection with rendering this opinion, we have examined the originals, or certified, conformed or reproduction copies, of all such records, agreements, instruments and documents as we have deemed relevant or necessary as the basis for the opinion hereinafter expressed. In all such examinations, we have assumed the genuineness of all signatures on original or certified copies and the conformity to original or certified copies of all copies submitted to us as conformed or reproduction copies. As to various questions of fact relevant to this opinion, we have relied upon, and assumed the accuracy of, certificates and oral or written statements and other information of or from public officials, officers or representatives of the Company, and others.

We have reviewed: (a) the certificate of incorporation of the Company; (b) the bylaws of the Company; (c) the offering circular; (d) form of Subscription Agreement; and (e) such other corporate documents, records, papers and certificates as we have deemed necessary for the purposes of the opinions expressed herein.

1

Based upon and subject to the foregoing and to the other qualifications and limitations set forth herein, we are of the opinion that the Shares, when issued and delivered in the manner and/or the terms described in the Offering Statement as filed (after it is declared qualified), will be validly issued, fully paid and non-assessable.

We express no opinion with regard to the applicability or effect of the law of any jurisdiction other than, as in effect on the date of this letter, (a) the internal laws of the State of California and (b) the federal laws of the United States. We express no opinion as to laws of any other jurisdiction. We assume no obligation to revise or supplement this opinion should the laws be changed after the effective date of the Offering Statement by legislative action, judicial decision or otherwise.

We hereby consent to the filing of this opinion as an exhibit to the Offering Statement and to the reference to our firm under the caption “Legal Matters” in the Offering Statement. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.

Sincerely yours,

/s/ Laura E. Anthony

Laura E. Anthony,

For the Firm

330 CLEMATIS STREET, #217 ● WEST PALM BEACH, FLORIDA ● 33401 ● PHONE: 561-514-0936 ●
FAX 561-514-0832

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EX1A-13 TST WTRS