Business Context and Reporting Period
This Form 8-K Current Report was filed by Muscle Maker, Inc. (not Sadot Group Inc.) on September 26, 2018. The company is an emerging growth company incorporated in California with principal executive offices in Burleson, Texas. The filing primarily addresses the appointment of new executive officers and the execution of material employment agreements.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation structures and employment terms rather than operational financial performance.
Material Changes and Executive Appointments
On September 26, 2018, the Company appointed two new executive officers and entered into two-year employment agreements:
- Ferdinand Groenewald was appointed Chief Financial Officer (CFO).
- Base Salary: $150,000 annually (increases to $175,000 upon closing of a Public Offering).
- Bonuses: $10,000 for completing the 2017 audit; $25,000 cash plus up to 10,000 shares (increasing to 25,000 shares if $5 million is raised) upon a public offering of at least $3 million.
- Kenneth Miller was appointed Chief Operating Officer (COO).
- Base Salary: $200,000 annually (increases to $275,000 upon closing of a Public Offering).
- Bonuses: $50,000 cash plus 75,000 shares (increasing to 125,000 shares if $5 million is raised) upon a public offering.
Outlook, Risks, and Contingencies
The compensation packages are heavily contingent on the successful completion of a "Public Offering" of not less than $3 million and listing on a national exchange. The agreements include standard termination provisions:
- Termination without Cause/Resignation for Good Reason: Executives are entitled to accrued salary/bonuses, expense reimbursement, and 12 months of monthly salary and benefits.
- Termination with Cause/Resignation without Good Reason: Executives are entitled only to accrued salary/bonuses and expense reimbursement through the date of termination.
- Restrictions: Executives are subject to confidentiality, non-compete, and non-solicitation clauses.
Investor Verification Checklist
- Verify the current status of the proposed $3 million to $5 million public offering referenced in the compensation agreements.
- Confirm the completion of the audit for the year ended December 31, 2017, to validate the $10,000 bonus eligibility for the CFO.
- Review the full text of Exhibits 10.1 and 10.2 for specific definitions of "cause," "good reason," and the exact terms of the non-compete restrictions.
- Assess the company's current cash position to determine its ability to fund the increased salaries and potential severance packages (12 months of salary) if terminations occur.