Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported): July 14, 2023

Commission File Number 001-39223

MUSCLE MAKER, INC.

(Exact name of small business issuer as specified in its charter)

Nevada		47-2555533
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

1751 River Run, Suite 200, Fort Worth, Texas 76107

(Address of principal executive offices)

(832) 604-9568

(Issuer’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act: Not applicable.

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.0001 par value		GRIL		The Nasdaq Stock Market

Item 1.01. Entry into a Material Definitive Agreement.

On October 19, 2022, Muscle Maker, Inc. (the “Company”) formed Sadot LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Sadot”). On November 14, 2022, the Company, Sadot and Aggia LLC FZ, a company formed under the laws of United Arab Emirates (“Aggia”) entered into a Services Agreement (the “Services Agreement”) whereby Sadot engaged Aggia to provide certain advisory services to Sadot for creating, acquiring and managing Sadot’s business of wholesaling food and engaging in the purchase and sale of physical food commodities. The closing date of the Services Agreement was November 16, 2022. The parties entered into Addendum 1 to the Services Agreement on November 17, 2022. Further, on July 14, 2023 (the “Addendum Date”), effective April 1, 2023, the parties entered into Addendum 2 to the Services Agreement (“Addendum 2”) pursuant to which the parties amended the compensation that Aggia is entitled.

Pursuant to Addendum 2, on the Addendum Date, the Company issued 8,855,452 shares (the “Shares”) of common stock, par value $0.0001 per share, of the Company, which such Shares represent 14,424,275 Shares that Aggia is entitled to receive pursuant to the Services Agreement less the 5,568,823 Shares that have been issued to Aggia pursuant to the Services Agreement as of the Addendum Date. The Company will not issue Aggia in excess of 14,424,275 Shares representing 49.999% of the number of issued and outstanding shares of common stock as of the effective date of the Services Agreement. The Shares shall be considered issued and outstanding as of the Addendum Date and Aggia shall hold all rights associated with such Shares. The Shares vest on a progressive schedule, at a rate equal to the net income of Sadot, calculated quarterly divided by $3.125, which for accounting purposes shall equal 40% of the net income of Sadot, calculated quarterly divided by $1.25. During the 30 day period after July 14, 2028 (the “Share Repurchase Date”), Aggia may purchase any Shares not vested. All Shares not vested or purchased by Aggia, shall be repurchased by the Company from Aggia at per share price of $0.001 per share. Further, the parties clarified that the Lock Up Agreement previously entered between the Company and Aggia dated November 16, 2022 shall be terminated on May 16, 2024 provided that any Shares that have not vested or been purchased by Aggia may not be transferred, offered, pledged, sold, subject to a contract to sell, granted any options for the sale of or otherwise disposed of, directly or indirectly. Following the Share Repurchase Date, in the event that there is net income for any fiscal quarter, then an amount equal to 40% of the net income shall accrue as debt payable by Sadot to Aggia (the “Debt”), until such Debt has reached a maximum of $71,520,462.

The Shares will be issued pursuant to an exemption from registration under Section 4(a)(2) and/or Rule 506 of Regulation D, which is promulgated under the Securities Act of 1933, as amended (the “Securities Act”). The Company relied on this exemption from registration based in part on representations made by Aggia in the Services Agreement.

The sale of the Shares has not been registered under the Securities Act or any state securities laws. The Shares may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither this Current Report on Form 8-K, nor the exhibits attached hereto is an offer to sell or the solicitation of an offer to buy such securities described herein.

The above description of the material terms of Addendum 2 does not purport to be complete and is qualified in its entirety by reference to Addendum 2, a copy of which is filed as Exhibit 10.1 and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained above under Item 1.01 is hereby incorporated by reference in response to this Item 2.03 of this Current Report on Form 8-K.

Item 3.02. Unregistered Sales of Equity Securities.

The information contained above under Item 1.01 is hereby incorporated by reference in response to this Item 3.02 of this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure

On July 18, 2023, the Company issued a press release with respect to Addendum 2. A copy of the press release is attached hereto as Exhibit 99.1. This press release is furnished under this Item 7.01 of this Current Report on Form 8-K and shall not be deemed filed with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits

Exhibit No.		Description
10.1		Addendum 2 to the Services Agreement entered between Muscle Maker Inc., Sadot LLC and Aggia LLC FZ dated July 14, 2023
99.1		Press Release dated July 18, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MUSCLE MAKER, INC.

	By:	/s/ Michael Roper
	Name:	Michael Roper
	Title:	Chief Executive Officer

Date: July 18, 2023

Exhibit 10.1

Exhibit 99.1

Muscle Maker, Inc. and AGGIA LLC FZ Amend Services Agreement

New Agreement to Reduce Expenses Related to Stock Issuance and Enhance Profit Potential

Fort Worth, Texas, July 18, 2023 (ACCESSWIRE) — Muscle Maker, Inc. (MMI), the “Company” (Nasdaq: GRIL), today announced it has amended its current Services Agreement with AGGIA LLC FZ. The new addendum, among other features, modifies the formula by which MMI will issue shares of common stock earned by AGGIA for net income generated through MMI’s Sadot division from 80% of net income to 40% of net income. The overall intended effect will be to reduce, by 50%, the quarterly non-cash expenses related to stock issuances to AGGIA, streamline the reporting processes and is expected to have a favorable impact the Company’s financial performance.

Previous Agreement

Under the service agreement as previously entered, AGGIA earned shares based on the net income generated by Sadot. Specifically, 80% of Sadot’s net income is used to calculate the shares earned by AGGIA. AGGIA has the potential to earn up to a total of 14,424,275 shares of MMI common stock, which the new addendum has not impacted. AGGIA has earned 5,568,823 shares through Q1 and has also nominated eight new board members by generating over $9.9 million in net income to date.

New Addendum

Under the new addendum, AGGIA may continue to earn shares using net income generated in Sadot. However, instead of allocating 80% of Sadot’s net income for stock issuance, we have modified this allocation to 40%. This change will reduce the quarterly non-cash stock based expense by 50% with the intended result of improving the bottom line results for the company.

Commenting on the new addendum, Muscle Maker CEO Michael Roper, stated, “This addendum reflects AGGIA’s continued support and confidence in their performance going forward. We believe this addendum will significantly clarify our financial reporting and improve our quarterly reported net income. While the fundamental terms of the agreement have not changed, i.e., AGGIA has nominated eight new board members, they still have the opportunity to earn up to 14,424,275 shares of stock, etc. The new addendum however is expected to cut our quarterly stock-based expense in half and more than triple the amount of net income from Sadot that will accrue to MMI’s bottom line. This is a significant improvement in our reporting processes and efforts to enhance shareholder value.”

About Muscle Maker, Inc.

MMI is an emerging player in the global food supply chain sector. MMI and its agri-foods subsidiary, Sadot LLC, connect producers and consumers across the globe, delivering agri-commodities from producing geographies such as the Americas, Africa, and the Black Sea to consumer markets in Southeast Asia, China, and the Middle East/North Africa (MENA) region.

MMI and Sadot currently operate within two verticals of the global food supply chain including 1) global agri-commodity sourcing and trading operations for food/feed products such as soybean meal, wheat, and corn and 2) food service operations with more than 50 restaurants across the U.S

MMI and Sadot continue to grow in size, diversity of operations, as well as in human and financial capital, but the principles that guided the Company remain the same - sourcing and providing healthier foods. The Company is headquartered in Ft. Worth, Texas with offices and operations in the U.S., Dubai, Israel, Singapore, Ukraine, and Zambia. For more information, please visit www.musclemakerinc.com.

Forward-Looking Statements

This press release may include “forward-looking statements” pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products, or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “should”, “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.” Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” and elsewhere in documents that we file from time to time with the SEC. Forward-looking statements speak only as of the date of the document in which they are contained, and Muscle Maker, Inc., does not undertake any duty to update any forward-looking statements except as may be required by law.

Investor Relations:

Frank Pogubila

SVP

Integrous Communications

W - 951.946.5288

E - IR@musclemakergrill.com

Cover	Jul. 14, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 14, 2023
Entity File Number	001-39223
Entity Registrant Name	MUSCLE MAKER, INC.
Entity Central Index Key	0001701756
Entity Tax Identification Number	47-2555533
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	1751 River Run
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Fort Worth
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76107
City Area Code	(832)
Local Phone Number	604-9568
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	GRIL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false