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FORT LAUDERDALE, Fla. - BurgerFi International, Inc. (NASDAQ: BFI, BFIIW), the parent company of fast-casual brands including Anthony's Coal Fired Pizza & Wings and BurgerFi, has received two deficiency notices from the Nasdaq Stock Market. The notices, issued on August 27, 2024, pertain to the late filing of the company's quarterly report and the composition of its board committees following director resignations.
The first notice indicates that BurgerFi did not meet Nasdaq's filing requirements due to its failure to submit the Q2 Form 10-Q on time. The second notice relates to the company's noncompliance with Nasdaq's audit committee and compensation committee requirements, triggered by the departure of certain board members.
BurgerFi is now tasked with submitting a plan to regain compliance concerning the delayed quarterly report within 60 days. If Nasdaq accepts the plan, the company will have until February 18, 2025, to implement it. Regarding the board committee composition, BurgerFi must present a compliance plan within 45 days, with a deadline of February 24, 2025, to demonstrate adherence to the rules.
While BurgerFi intends to address these issues and regain compliance within the designated periods, it has cautioned that there is no certainty that it will achieve this goal or maintain compliance with other Nasdaq listing requirements.
BurgerFi International operates and franchises a total of 162 locations across its two brands as of April 1, 2024. Anthony's Coal Fired Pizza & Wings, known for its coal-fired oven pizzas and wings, operates 60 restaurants. BurgerFi, recognized for its all-natural Angus beef burgers and other offerings, has 102 locations.
The company's ability to submit and have accepted plans of compliance with Nasdaq's rules and to regain and maintain compliance with the stock market's listing standards remains uncertain. This news is based on a press release statement from BurgerFi International.
In other recent news, BurgerFi International has been navigating a series of strategic and financial developments. The company has secured an Emergency Protective Advance Agreement, receiving a protective advance of $2.5 million from TREW Capital Management Private Credit 2 LLC. Additionally, BurgerFi has settled a lawsuit with Lion Point Capital, agreeing to pay $1.35 million in installments and issue 300,000 shares of Series A Preferred Stock.
In a move to address compliance regulations, BurgerFi transitioned to the Nasdaq Capital Market, and David Heidecorn has taken over as Chairman of the Board, replacing Ophir Sternberg. Amidst these changes, the company is exploring strategic alternatives under the guidance of Kroll Securities and has secured commitments from L Catterton and TREW to lend up to $2 million each.
Despite a decrease in Q1 revenues to $42.9 million and a drop in restaurant-level profit margin to 12.2%, BurgerFi projects total revenue of $107 million to $180 million for fiscal year 2024, with adjusted EBITDA between $7 million and $9 million. These recent developments reflect BurgerFi's strategic and financial landscape as it navigates through its current challenges.
InvestingPro Insights
In light of BurgerFi International's recent challenges with Nasdaq compliance, a closer look at the company's financial health through InvestingPro's real-time data and tips reveals some key considerations. With a market capitalization of just $4.25 million, the company is trading at a low Price/Book multiple of 0.08 as of Q1 2024. This could indicate that the stock is undervalued relative to the company's book value, potentially attracting value investors.
However, the company's financial performance raises some concerns. Notably, BurgerFi International has experienced a revenue decline of 6.83% over the last twelve months as of Q1 2024, alongside a negative operating income margin of -6.38%. This suggests that the company is facing challenges in generating profitable sales and managing its operating expenses effectively. Moreover, the stock has seen a significant price drop, with a one-month total return of -71.25% as of the data collected, highlighting the stock's recent poor performance and high volatility.
InvestingPro Tips for BurgerFi International also suggest caution. The company operates with a significant debt burden and is quickly burning through cash. Additionally, analysts do not expect the company to be profitable this year, and short-term obligations exceed liquid assets, which could present liquidity issues. For investors seeking more in-depth analysis, InvestingPro offers additional insights, with a total of 17 InvestingPro Tips available for BurgerFi International at https://www.investing.com/pro/BFI.
These financial metrics and tips are particularly relevant for shareholders and potential investors as they assess BurgerFi International's ability to address its current Nasdaq compliance issues and its overall financial stability.
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