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Operator: Good afternoon, and welcome to the Muscle Maker, Inc.’s Q1 2023 Earnings Call. Today’s call is being recorded and all participants will be in listen-only mode. After managements prepared remarks, we will open the call to questions from analysts. At this time for opening remarks and introductions, I’d like to turn the call over to Frank Pogubila, Muscle Maker, Inc.’s Investor Relations Contact.

Frank Pogubila: Thank you, operator, and welcome, everyone, to Muscle Maker, Inc.’s first quarter 2023 earnings call and webcast. Before we get started, I would like to say that this call 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 on this call can discuss financial projections, information or expectations about business plans, results of operations, products or markets or otherwise make statements about future events, such statements may be forward-looking. Such forward-looking statements can be identified by the use of the words such as should, may, intends, anticipates, believes, estimates, projects, forecasts, expects, plans and proposes.

Although management sees 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 Muscle Maker, Inc. files 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. For this call, all numbers and percentages disclosed have been rounded.

On this call we will refer to Muscle Maker, Inc. as MMI. With me on the call today are MMI’s Chief Executive Officer, Michael Roper; and Chief Financial Officer, Jennifer Black. Michael and Jennifer will be presenting prepared remarks related to MMI’s financials filed on May 10, 2023, and those documents may be found on MMI’s website, Newswire fees and on the SEC’s website linked from the MMI IR pages at www.musclemakerinc.com. At this point, I would like to turn the call over to MMI’s CEO, Michael Roper. Michael?

Michael Roper: Thanks, Frank. Good afternoon, everyone. And thank you for joining us today. I’m pleased to report that Q1 was a strong continuation of Q4 and mark the first full quarter of MMI’s significant pivot towards a diversified global food organization through the creation of our wholly owned subsidiary, Sadot LLC. As you may recall, in late 2022, we began a transformation from a U.S. centric restaurant business into a global food focused organization with two distinct business units. Sadot LLC and the MMI Restaurant Group. Our first business unit Sadot LLC is our newly formed international agri commodity subsidiary specializing in the trading and shipping of food and feed commodities such as soybean meal, meat and corn.

Today, Sadot is our largest operating unit and has been instrumental in our performance for this quarter. This pivot into a new business and operations was done with a long term strategic view of the opportunities in the global food supply chain, instead of only focusing on food, retail or restaurants, we broadened our view and saw that there’s an increasing need for companies that can build and operate sustainable supply chains and can take part in providing food security to global communities. Along with vast financial opportunities. This creates social and environmental values, and correlates with our long term values of providing food that is healthy and fresh around the globe. Our second business unit, the MMI Restaurant Group is our legacy business, which includes 50 plus restaurant units across two fast casual concepts.

Pokemoto and Muscle Maker Grill, with Pokemoto being a high growth restaurant brand. The restaurant also includes the subscription based fresh meal prep service, Superfit Foods with 30 plus points of distribution. So let me take a couple of minutes here and discuss some of the Q1 highlights. I’m pleased to announce that MMI achieve top line revenue of $213 million for the first quarter of 2023. This revenue announcement marks the accomplishment of five consecutive months above $50 million in revenue per month for the company and demonstrates the continued performance of Sadot, with the total revenue since inception in November of 2022 of over $361 million. Overall, our first quarter non-GAAP adjusted EBITDA was $2.4 million in 2023. Compared to a 1.5 million non-GAAP adjusted EBITDA loss in the first quarter of 2022.

The $3.9 million increase is primarily attributable to the net income generated by Sadot as we continue to execute against our new business plan. This excludes the non-cash charges required under GAAP to account for the issuance of shares to AGGIA, the company providing consulting and operations support to Sadot. And I’ll share more about AGGIA in a moment. We see Q1 results along with other strategic actions as a foundation for our future growth and diversification within the global food supply chain. In addition, we announced in the second quarter that we’ve instituted a share repurchase program. Regarding AGGIA as disclosed in an 8-K filing on November 18 2022, MMI and its wholly owned subsidiary Sadot LLC entered into a service agreement whereby Sadot engaged AGGIA to perform services related to the purchase and sale of physical food commodities.

The service agreement allows AGGIA to nominate up to eight board directors, one upon signing service agreement and an additional seven nominations upon Sadot generating specific net income targets. Two Directors at $3.3 million, two more at $6.6 million and the final three at $9.9 million. Since inception and through March 31 2023, Sadot has generated approximately $8.7 million in net income. As Sadot crossed the second threshold of $6.6 million in net income, AGGIA and nominated and MMI accepted two new board directors, Marvin Yao and Paul Sansom. Both of these new board directors bring industry specific knowledge and a wealth of experience. As of today, MMI has added five of the possible eight new AGGIA nominated board directors. We believe the agreement with AGGIA being intelligent and creative investment in the strategic future of our company.

We are confident that AGGIA will continue to provide valuable insight and expertise as we grow our global food organization. We are committed to the execution of our strategic vision and to capitalize on the opportunities presented by the global food market. MMI success this quarter is a testament to the hard work and dedication of our team. And we look forward to building on this momentum as we move forward. Now I’d like to turn the call over to our CFO Jennifer Black to review the financial performance of the company for the first quarter of 2023. Jennifer?

Jennifer Black: Thanks, Mike. And thank you to everyone joining us here today. Before I begin, I would like to note that our financial results for the quarter ended March 31 2023 on Form 10-Q were filed with the SEC on May 10. And then a press release that same day. With that I’d like to give an overview of the financials for the first quarter of 2023. For the quarter ended March 31 2023, our company-wide revenue significantly increased in total $213 million, compared to $3 million for the prior quarter ended March 31 2022. Of the $213 million revenue increase, $210 million was primarily due to the commodity sales revenue generated by Sadot, and its servicing agreement with AGGIA. Sadot completed 19 transactions in Q1 with the average revenue per transaction of $11.1 million and an average cost of goods sold per transaction at $10.8 million.

These 19 transactions were completed throughout 11 different countries. The MMI restaurant business unit, generated a total revenue of $3 million. This consisted a $2.7 million from company owned and operated locations and $300,000 in royalty fees collected from both Muscle Maker Grill and Pokemoto franchise locations for the quarter ended March 31 2023. Company owned and operated location revenue decreased to the closing of underperforming and non-profitable Muscle Maker Grill restaurants. Well, royalty revenue increased by 36.5% as the company continues to focus its restaurant business unit strategy on franchising the Pokemoto concept. As of today, the company has over 45 additional Pokemoto franchise agreements sold, but not yet open. The increase in franchise royalties is due to an increase in Pokemoto franchisees and a closure of one Muscle Maker Grill franchise.

Overall, our first quarter non-GAAP adjusted EBITDA was $2.4 million in 2023, compared to a $1.5 million non-GAAP adjusted EBITDA loss in the first quarter of 2022. The $3.9 million increase is primarily due to the net income generated by Sadot. As we continue to execute against our new business plan. Our Sadot subsidiary generated a net income of $4.3 million, while our MMI Restaurant Brands generated a net loss of $406,000 for the first quarter. Adjusted EBITDA excludes non-cash charges required under GAAP to account for the issuance of shares to AGGIA, and the gain related to the issuance of these shares, which we feel is an intelligent and accretive investment in the strategic future of our company. The issuance of the common shares to AGGIA for the stock based consulting agreement was the most significant change in our expense in the first quarter of 2023, compared to the same period in 2022.

The stock based consulting expense of $3.4 million for the quarter ended March 31 2023, is the result of common stock to be issued as consulting fee, to AGGIA for the Sadot net income performance. Based on the servicing agreement with AGGIA, the stock-based consulting fees are calculated at approximately 80% of the net income generated by the Sadot business unit. As of March 31 2023, we had a cash balance of $6.4 million and a working capital surplus of $6.4 million. The cash decrease in the first quarter of 2023 was due primarily to Sadot offering terms on the commodity trade transactions to generate higher margin on these trades. In addition, the company deployed capital into smaller such trades, which tend to generate higher margins. The company has over $4 million in receivables that are due in less than nine — in less than 60 days.

With that, I’d like to turn the call back over to Michael Roper.

Michael Roper: Thanks for the financial review, Jennifer. We’re excited to report that our new diversification strategy and company pivot towards a diversified global food organization is starting to bear fruit. We firmly believe that adding a Sadot subsidiary has created significant value for the company. We are very pleased with Sadot performance to date and our diversification strategy into the agri commodity space. We’ve spoken a lot about Sadot and its impact on the overall company. Let me say a few words about our restaurant unit. As we’ve mentioned previously, we are focusing our strategy and growing the Pokemoto franchise business, while also optimizing our other restaurant concepts, which could include closing underperforming locations or investigating other strategic alternatives.

We currently have over 45 Pokemoto franchise agreements sold, but not yet open, and also have recently launched a new dual concept unit that combines our Pokemoto brand, with our Muscle Maker Grill concept under the same roof. This leverages our existing infrastructure, reducing our overall costs while offering a wide variety of options for consumers, while potentially turning a negative impact location into a positive impact location. More to come on these types of initiatives. Investors may notice that our public company brand profile and investor communications have started to shift this quarter and will continue in the current quarter to better reflect a growth story around Sadot and focus on performance from that business unit. We believe there’s an ability to become more vertically integrated with the goal of generating higher contribution margins and further diversification.

These are opportunities we’ll explore as we move forward. It should be noted that the agri commodity business is slightly seasonal during the U.S. winter months. So our last two quarters are a good indication of baselines for us to grow upon. Investors may also notice a growing disparity in the operating results between the two business units, while our management is committed to focusing our resources on the path that will create the most value for shareholders moving forward. In summary, we’re extremely pleased with MMI’s performance this quarter, fueled by Sadot, and our need diversification strategy. We’re confident in our strategy, we look forward to continuing growth in the months and years to come. With that, let’s open the call to questions from the analysts.

Operator: Thank you, Michael, we’ll take our first question from Aaron Grey with Alliance Global Partners. Aaron, if you go ahead, please.

Frank Pogubila: Thank you, William. And I think we have run out of time today. That’s all the time we have. Let’s go ahead and wrap up the Q&A. Thank you, everyone, for your questions. Mr. Roper, do you have any final comments?

Michael Roper: Yes, look, just in closing, I do want to thank all of our shareholders and stakeholders for their support, and supporting our initiatives that are out there. I know, we’ve done a major pivot, and there can be a lot of questions that are there. And we’re doing our best to get the narrative out there of exactly kind of what we’re doing. And we do feel that, the message is getting better, and people understanding kind of what’s happening here and things. So, I do appreciate the patience. And I do want to thank our employees for everything they do. I do think we got an incredible team, not only at MMI, but also at AGGIA, who are working with us, we’re working really well together. And, between the two, they’re really, who deserve all the credit for our successful so far and as far as being part of what we built, and we’re going to continue to build here and move forward.

So with that, I’d like to thank everybody. And one last final thing go Blackhawks, they got first in the draft, and you get kind of a dart.

Frank Pogubila: Wonderful. Thank you all for joining. We’ll go ahead and conclude the call. Thank you.