FORT LAUDERDALE, Fla. - BurgerFi International, Inc. (NASDAQ: BFI, BFIIW), which operates Anthony’s Coal Fired Pizza & Wings and the BurgerFi brand, announced a settlement with Lion Point Capital, LP, concluding a lawsuit regarding share registration rights. Under the agreement reached on Monday, BurgerFi will pay Lion Point $1,350,000 in scheduled installments and issue 300,000 shares of Series A Preferred Stock.
The dispute originated when Lion Point sued BurgerFi on August 26, 2022, alleging the company had not registered its shares timely, breaching their agreement. The settlement, which includes no admission of fault by either party, aims to avoid further litigation costs and risks.
David Heidecorn, Chairman of the Board of BurgerFi, expressed relief at resolving the matter and stated the company's focus on exploring strategic alternatives for the benefit of stakeholders. This statement aligns with BurgerFi's ongoing efforts to maintain its market position and pursue growth opportunities.
BurgerFi International is known for its fast-casual "better burger" concept and premium-casual dining restaurants. As of April 1, 2024, the company operates 162 locations, including 60 Anthony’s restaurants and 102 BurgerFi restaurants. Anthony's is recognized for its coal-fired cuisine, while BurgerFi prides itself on all-natural Angus beef burgers and quality food offerings.
The company has received various accolades, such as "The Very Best Burger" at the 2023 SOBE Wine and Food Festival and "Best Fast Casual Restaurant" in USA Today's 10Best 2023 Readers' Choice Awards.
This settlement announcement is based on a press release statement from BurgerFi International.
In other recent news, BurgerFi International has made several strategic changes and reported its Q1 2024 financial results. The fast-casual restaurant chain transitioned to the Nasdaq Capital Market in response to Nasdaq's compliance regulations. BurgerFi has until January 20, 2025, to meet the minimum $1.00 bid price requirement or risk delisting. Amidst these changes, David Heidecorn has been appointed as the new Chairman of the Board, replacing Ophir Sternberg.
The company is also exploring strategic alternatives under the guidance of Kroll Securities, LLC, due to liquidity challenges. It has secured commitments from L Catterton and TREW to lend up to $2 million each, and retention agreements have been made with CEO Carl Bachmann and CFO Christopher E. Jones to ensure leadership continuity.
Despite a challenging Q1, with revenues decreasing by 6% 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 are some of the recent developments in BurgerFi's strategic and financial landscape.
InvestingPro Insights
BurgerFi International, Inc. (NASDAQ: BFI, BFIIW) has recently reached a settlement to resolve a legal dispute, indicating a proactive step towards clearing corporate hurdles and possibly improving investor sentiment. In light of this development, key financial metrics and InvestingPro Tips provide a deeper understanding of the company's current financial health and market perception:
InvestingPro data shows that BurgerFi's Market Cap stands at a modest 5.82 million USD, reflecting the company's small size in the fast-casual dining sector. While the company is trading at a low Price / Book multiple of 0.11, which could suggest that the stock is undervalued relative to its book value, this metric alone does not provide a complete picture of the investment opportunity. It is essential to consider that the company has been operating with a significant debt burden and short-term obligations that exceed its liquid assets, as highlighted in InvestingPro Tips.
Moreover, BurgerFi's stock has experienced high price volatility and a notable decline, with a 1 Year Price Total Return of -88.63%. The company's revenue has also seen a decrease, with a -6.83% change over the last twelve months as of Q1 2024. This performance may raise concerns about the company's ability to generate growth in the near term.
For investors seeking a comprehensive analysis of BurgerFi's financials and future outlook, InvestingPro offers an array of additional tips. For instance, analysts do not anticipate the company will be profitable this year, and the valuation implies a poor free cash flow yield. These insights, among others, are available on InvestingPro, with a total of 15 tips that can help investors make more informed decisions. To access these valuable insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
While BurgerFi continues to garner recognition for its food quality and restaurant concepts, the InvestingPro Tips suggest caution due to the company's financial challenges and market performance. Investors should weigh these factors alongside the company's strategic initiatives to determine the potential for long-term value creation.
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