SCHEDULE: Investor Seemab Discloses 6.2% Stake in FAT Brands

Muhammad Asif Seemab has reported a 6.2% beneficial ownership stake in FAT Brands, Inc.'s Class A Common Stock.

Summary

• Muhammad Asif Seemab reported beneficial ownership of 1,030,000 shares of FAT Brands, Inc. Class A Common Stock.
• This represents 6.2% of the Class A Common Stock, based on 16,668,520 shares outstanding as of September 28, 2025.
• Mr. Seemab also owns 390,500 shares of Series B Cumulative Preferred Stock, which are currently non-voting.
• FAT Brands, Inc. is in default of seven monthly dividend payments on its Series B Cumulative Preferred Stock.
• Preferred shareholders gain the right to elect two directors if the company defaults on 18 or more monthly dividend payments.

Sentiment

Score: 4

Explanation: While a significant investor stake can be positive, the disclosed default on preferred dividends is a clear negative, indicating financial strain for the issuer. The non-voting status of preferred shares due to insufficient defaults mitigates immediate governance impact but highlights underlying issues.

Positives

• A significant individual investor, Muhammad Asif Seemab, has taken a 6.2% beneficial ownership stake in the company's Class A Common Stock, indicating confidence.

Negatives

• FAT Brands, Inc. is in default of seven monthly dividend payments on its Series B Cumulative Preferred Stock.

Risks

• The Issuer is in default of seven monthly dividend payments on its Series B Cumulative Preferred Stock.
• If the Issuer defaults on 18 or more monthly dividend payments, holders of the Series B Cumulative Preferred Stock will be entitled to elect two directors, potentially impacting corporate governance.

Future Outlook

The Issuer faces a potential change in corporate governance if it defaults on 18 or more monthly dividend payments on its Series B Cumulative Preferred Stock, as preferred shareholders would then gain the right to elect two directors. Currently, 7 payments are in default.

Industry Context

This filing indicates a significant individual investor's position in a publicly traded company, which can be seen as a vote of confidence or a strategic move. The mention of preferred dividend defaults highlights potential financial stress for the company, which could be a concern in the broader restaurant or franchising industry, especially if it impacts growth or operational stability.

Corporate Governance

Stakeholder Impact

• Shareholders (Class A Common Stock): The dividend default on preferred shares could signal financial weakness, potentially impacting common stock valuation. The significant stake by Mr. Seemab could be seen as a positive, but the underlying issues are concerning.
• Preferred Shareholders (Series B Cumulative Preferred Stock): Directly impacted by the dividend defaults, losing income. They also have a contingent right to elect directors if defaults worsen.
• Creditors: The dividend defaults could be a red flag for the company's overall financial health and ability to meet its obligations.

Next Steps

• Monitor FAT Brands, Inc.'s progress regarding its Series B Cumulative Preferred Stock dividend payments to assess the risk of preferred shareholders gaining voting rights.

Key Dates

Recommendation

The filing reveals a significant beneficial ownership stake by an individual investor, which could be interpreted positively. However, the disclosure of seven monthly dividend payment defaults on Series B Cumulative Preferred Stock indicates financial strain for FAT Brands, Inc. This financial weakness presents a notable risk, including potential future changes in corporate governance if defaults continue. Given these mixed signals—a vote of confidence from a large investor alongside clear financial challenges—a "hold" recommendation is appropriate. Investors should monitor the company's financial performance, particularly its ability to address the preferred dividend defaults, before making further investment decisions.

Keywords

FAT Brands, Muhammad Asif Seemab, Schedule 13G, Class A Common Stock, Preferred Stock, Beneficial Ownership, SEC Filing, Investor Stake, Corporate Governance, Dividend Default