Mark One) __________ (State or other jurisdiction of (I.R.S. Employer ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Three Months Ended March 31, 2018 September 30, 2025. In uncertainty described above. current year presentation. Estimates Consolidated Financial Statements (Unaudited) Loss Per Share evaluate its performance, both internally and as compared with its peers, because this measure excludes certain items that may not be indicative of the Company’s operating performance, as well as items that can vary widely across different industries or among companies within the same industry. The Company percentage of those digital sales when compared to total sales at all our franchised and corporate-owned restaurants. Procedures. Procedures. as of July 3, 2023. Reporting.MARK ONE)☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 quarterquarterly period ended March 31, 2018☐ TRANSITION REPORT PURSUANT TO SECTION 13 July 3, 2023 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 file number:File Number: 001-38417OPES ACQUISITION CORP.(Exact Name of Registrant as Specified in Its Charter)82-2418815 Delaware82-2418815
incorporation or organization)
Identification No.)33309 (Address of principal executive offices) (Zip Code) Park Plaza Torre I Javier Barros Sierra 540, Of. 103Col. Santa Fe01210 México City, México(Addressprincipal executive offices)+52 (55) 5992-8300(Issuer’s telephone number)Checkthe Act:Title of each class Trading
Symbol(s)Name of each exchange on which registered Common Stock, par value $0.0001 per share BFI The Nasdaq Stock Market LLC Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share BFIIW The Nasdaq Stock Market LLC issuerregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrantRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒ No ☒and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐☒ No ☐filer”,filer,” “accelerated filer”,filer,” “smaller reporting company”,company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐☐ Accelerated filer ☐☐ Non-accelerated filer ☒☒ Smaller reporting company ☐☒ (Do not check if a smaller reporting company) Emerging growth company ☒☒ ☒☐ No ☐As☒ May 14, 2018, 14,820,000 shares of common stock, par value $0.0001 per share, were issued and outstanding.OPES ACQUISITION CORP.FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2018 TABLE OF CONTENTSPagePage Condensed Balance Sheets1Condensed Statement of Operations2Condensed Statement of Cash Flows3Notes to Unaudited Condensed Financial Statements4131414151617PART I - FINANCIAL INFORMATIONOpes Acquisition Corp.Condensed Balance Sheets March 31, December 31, 2018 2017 (unaudited) ASSETS Current Assets Cash $ 559,571 $ 22,002 Prepaid expenses 32,900 — Total Current Assets 592,471 22,002 Deferred offering costs — 143,199 Cash and marketable securities held in Trust Account 116,247,875 — Total Assets $ 116,840,346 $ 165,201 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Account payable and accrued expenses $ 59,951 $ 1,038 Accrued offering costs 10,000 17,500 Income taxes payable 5,968 — Promissory note – related party — 122,839 Total Current Liabilities 75,919 141,377 Commitments Common stock subject to possible redemption, 11,061,794 and -0- shares at redemption value as of March 31, 2018 and December 31, 2017, respectively 111,764,426 — Stockholders’ Equity Preferred stock, $0.0001 par value; 10,000,000 authorized; none issued and outstanding — — Common stock, $0.0001 par value; 100,000,000 shares authorized; 3,758,206 and 2,875,000 issued and outstanding (excluding 11,061,794 and -0- shares subject to possible redemption) as of March 31, 2018 and December 31, 2017, respectively 376 288 Additional paid-in capital 4,978,352 24,712 Retained earnings/(Accumulated deficit) 21,273 (1,176 ) Total Stockholders’ Equity 5,000,001 23,824 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 116,840,346 $ 165,201 The accompanying notesan integral part of these condensed financialbased on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements.Opes Acquisition Corp.Condensed Statement of Operations (unaudited) Operating costs $ 69,458 Loss from operations (69,458 ) Other income: Interest income 83,293 Unrealized gain on marketable securities held in Trust Account 14,582 Other income 97,875 Income before provision for income taxes 28,417 Provision for income taxes (5,968 ) Net income $ 22,449 Weighted average shares outstanding, basic and diluted(1) 2,690,740 Basic and diluted net loss per common share $ (0.01 ) (1)Excludes an aggregate of up to 11,061,794 shares subject to redemption at March 31, 2018.The accompanying notes Factors that could cause or contribute to such differences include, but are an integral part of these condensed financial statements. 2Opes Acquisition Corp.Condensed Statement of Cash Flows March 31, 2018 (unaudited) Cash Flows from Operating Activities: Net income $ 22,449 Adjustments to reconcile net income to net cash used in operating activities: Interest earned on marketable securities held in Trust Account (83,293 ) Unrealized gain on marketable securities held in Trust Account (14,582 ) Changes in operating assets and liabilities: Prepaid expenses (32,900 ) Accounts payable and accrued expenses 58,913 Income taxes payable 5,968 Net cash used in operating activities (43,445 ) Cash Flows from Investing Activities: Investment of cash in Trust Account (116,150,000 ) Net cash used in investing activities (116,150,000 ) Cash Flows from Financing Activities: Proceeds from sale of Units, net of underwriting discounts paid 112,700,000 Proceeds from sale of Private Placement Units 4,450,000 Proceeds from Unit Purchase Option 100 Advances from related party 67,013 Repayment of advances from related party (67,013 ) Repayment of promissory note – related party (122,839 ) Payment of offering costs (296,247 ) Net cash provided by financing activities 116,731,014 Net Change in Cash 537,569 Cash – Beginning 22,002 Cash – Ending $ 559,571 Non-cash investing and financing activities: Initial classification of common stock subject to redemption $ 111,741,988 Change in value of common stock subject to redemption $ 22,438 The accompanying notes are an integral part of these condensed financial statements.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONSOpes Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on July 24, 2017. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business transaction with one or more operating businesses or entities that the Company has not yet identified (a “Business Combination”). Although the Company is not limited to, a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focusthose discussed in our Annual Report on businesses in Mexico.All activity through March 31, 2018 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a Business Combination.The registration statementForm 10-K for the Company’s Initial Public Offering was declared effectiveyear ended January 2, 2023 and this Quarterly Report on March 13, 2018. On March 16, 2018,Form 10-Q, and in particular, the Company consummated the Initial Public Offering of 10,000,000 units (“Units” and, with respect to the common stock included in the Units sold, the “Public Shares”), generating gross proceeds of $100,000,000, which is described in Note 3.Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 400,000 units (the “Private Placement Units”) at a price of $10.00 per unit in a private placement to Axis Public Ventures S. de R.L. de C.V. (“Axis Public Ventures”), an affiliate of Axis Capital Management (the “Sponsor”), Lion Point Capital (“Lion Point”) and the other stockholders of the Company prior to the Initial Public Offering (“Initial Stockholders”), generating gross proceeds of $4,000,000, which is described in Note 4.Following the closing of the Initial Public Offering on March 16, 2018, an amount of $101,000,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Units was placed in a trust account (“Trust Account”) which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.On March 20, 2018, in connection with the underwriters’ exercise of their over-allotment option in full, the Company consummated the sale of an additional 1,500,000 Units, and the sale of an additional 45,000 Private Placement Units each at $10.00 per unit, generating total gross proceeds of $15,450,000. Following the closing, an additional $15,150,000 of the net proceeds ($10.10 per Unit) was placed in the Trust Account, resulting in $116,150,000 ($10.10 per Unit) held in the Trust Account.Transaction costs amounted to $2,731,946, consisting of $2,300,000 of underwriting fees and $431,946 of other costs. As of March 31, 2018, $559,571 of cash was held outside of the Trust Account and is available for working capital purposes.The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (net of taxes payable) at the time of the signing an agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment companyrisks discussed under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.The Company will provide its stockholderscaption the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.10 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, solely if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“(the file tender offer documents withSubsidiariesUnaudited (in thousands, except for per share data) July 3, 2023 January 2, 2023 Assets Current Assets Cash $ 10,711 $ 11,917 Accounts receivable, net 1,457 1,926 Inventory 1,438 1,320 Assets held for sale 1,527 732 Prepaid expenses and other current assets 1,525 2,564 Total Current Assets $ 16,658 $ 18,459 Property & equipment, net 18,247 19,371 Operating right-of-use assets, net 45,565 45,741 Goodwill 31,621 31,621 Intangible assets, net 155,213 160,208 Other assets 971 1,380 Total Assets $ 268,275 $ 276,780 Liabilities and Stockholders' Equity Current Liabilities Accounts payable - trade and other $ 7,723 $ 8,464 Accrued expenses 8,381 10,589 Short-term operating lease liability 12,274 9,924 Short-term borrowings, including finance leases 3,485 4,985 Other current liabilities 2,842 6,241 Total Current Liabilities $ 34,705 $ 40,203 Non-Current Liabilities Long-term borrowings, including finance leases 49,786 53,794 Redeemable preferred stock, $0.0001 par value, 10,000,000 shares authorized, 2,120,000 shares issued and outstanding as of July 3, 2023 and January 2, 2023, $53 million principal redemption value, respectively 53,482 51,418 Long-term operating lease liability 40,889 40,748 Related party note payable 14,412 9,235 Deferred income taxes 1,223 1,223 Other non-current liabilities 1,330 1,212 Total Liabilities $ 195,827 $ 197,833 Commitments and Contingencies - Note 8 Stockholders' Equity Common stock, $ 0.0001 par value, 100,000,000 shares authorized, 26,724,218, and 22,257,772 shares issued and outstanding as of July 3, 2023 and January 2, 2023, respectively 2 2 Additional paid-in capital 314,749 306,096 Accumulated deficit (242,303) (227,151) Total Stockholders' Equity $ 72,448 $ 78,947 Total Liabilities and Stockholders' Equity $ 268,275 $ 276,780 Quarter Ended Six Months Ended (in thousands, except for per share data) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Revenue Restaurant sales $ 40,808 $ 42,236 $ 84,124 $84,592 Royalty and other fees 2,190 2,611 4,160 4,714 Royalty - brand development and co-op 429 451 870 922 Total Revenue $ 43,427 $ 45,298 $ 89,154 $ 90,228 Restaurant level operating expenses: Food, beverage and paper costs 10,772 12,545 22,382 25,352 Labor and related expenses 12,699 12,328 25,916 24,910 Other operating expenses 7,760 7,421 15,216 14,613 Occupancy and related expenses 3,930 3,890 7,763 7,725 General and administrative expenses 5,812 7,406 12,388 13,432 Depreciation and amortization expense 3,295 4,730 6,522 9,174 Share-based compensation expense 556 909 5,230 8,285 Brand development, co-op and advertising expenses 933 1,126 2,029 1,839 Goodwill and intangible asset impairment — 55,168 — 55,168 Restructuring costs and other charges, net 1,135 52 2,174 1,040 Total Operating Expenses $ 46,892 $ 105,575 $ 99,620 $ 161,538 Operating Loss (3,465) (60,277) (10,466) (71,310) Interest expense, net (2,211) (2,246) (4,289) (4,318) (Loss) gain on change in value of warrant liability (318) 1,858 (391) 1,324 Other loss (5) (47) (5) (80) Loss before income taxes $ (5,999) $ (60,712) $ (15,151) $ (74,384) Income tax (expense) benefit (2) 335 (2) 447 Net loss $ (6,001) $ (60,377) $ (15,153) $ (73,937) Weighted average common shares outstanding: Basic 24,891,449 22,214,628 24,216,199 22,089,799 Diluted 24,891,449 22,214,628 24,216,199 22,089,799 Net loss per common share: Basic and Diluted $ (0.24) $ (2.72) $ (0.63) $ (3.35) Common Stock Additional Paid-in Capital Accumulated Deficit Total (in thousands, except for share data) Shares Amount Balance as of March 31, 2022 22,042,583 $ 2 $ 303,383 $ (137,279) $ 166,106 Share-based compensation 238,514 — 909 — 909 Vested shares issued — — — — — Shares issued in acquisition of Anthony's* — — — — — Shares withheld for taxes (27,865) — (101) — (101) Net income — — — (60,377) (60,377) Balance as of June 30, 2022 22,253,232 $ 2 $ 304,191 $ (197,656) $ 106,537 Common Stock Additional Paid-in Capital Accumulated Deficit Total (in thousands, except for share data) Shares Amount Balance as of April 3, 2023 23,823,105 $ 2 $ 310,768 (236,302) $ 74,468 Shares issued in private placement 2,868,853 — 3,436 3,436 Share-based compensation — — 556 — 556 Vested shares issued 41,883 — — — — Shares issued in legal settlement — — — — — Shares withheld for taxes (9,623) — (11) — (11) Net loss — — — (6,001) (6,001) Balance as of July 3, 2023 26,724,218 $ 2 $ 314,749 $ (242,303) $ 72,448 Common Stock Additional Paid-in Capital Accumulated Deficit Total (in thousands, except for share data) Shares Amount Balance as of December 31, 2021 21,303,500 $ 2 $ 296,992 $ (123,719) $ 173,275 Share-based compensation — — 4,475 — 4,475 Shares issued for share-based compensation 965,676 — 3,810 — 3,810 Shares issued in acquisition of Anthony's* 123,131 — — — — Shares withheld for taxes (139,075) — (1,086) — (1,086) Net income — — — (73,937) (73,937) Balance as of June 30, 2022 22,253,232 $ 2 $ 304,191 $ (197,656) $ 106,537 Common Stock Additional Paid-in Capital Accumulated Deficit Total (in thousands, except for share data) Shares Amount Balance as of January 2, 2023 22,257,772 $ 2 $ 306,096 $ (227,151) $ 78,947 Shares issued in private placement 2,868,853 — 3,436 3,436 Share-based compensation — — 5,230 — 5,230 Vested share issued 1,681,057 — — — — Shares issued in legal settlement 200,000 — 352 — 352 Shares withheld for taxes (283,464) — (365) — (365) Net loss — — — (15,153) (15,153) Balance as of July 3, 2023 26,724,218 $ 2 $ 314,749 $ (242,303) $ 72,448 Six Months Ended (in thousands) July 3, 2023 June 30, 2022 Cash Flows (Used in) Provided by Operating Activities Net loss $ (15,153) $ (73,937) Adjustments to reconcile net loss income to net cash (used in) provided by operating activities Goodwill impairment — 55,168 Depreciation and amortization 6,522 9,174 Share-based compensation 5,230 8,285 Loss on legal settlement 131 — Forfeited franchise deposits (374) (433) Non-cash lease cost (36) 112 Loss (gain) on change in value of warrant liability 391 (1,324) (Gain) loss on disposal of property and equipment (10) 385 Deferred income taxes — (447) Other non-cash interest 2,378 2,290 Other, net 108 32 Changes in operating assets and liabilities Accounts receivable 480 270 Inventory (97) 35 Prepaid expenses and other assets 1,410 225 Accounts payable - trade (784) 2,120 Accrued expenses and other current liabilities (2,924) 1,895 Other long-term liabilities 112 38 Cash Flows (Used in) Provided by Operating Activities $ (2,616) $ 3,888 Net Cash Flows Provided By Investing Activities Purchases of property and equipment (1,046) (1,056) Proceeds from the sale of property and equipment 26 1,025 Net Cash Flows Used in Investing Activities $ (1,020) $ (31) Net Cash Flows Used in Financing Activities Proceeds from issuance of common stock 3,436 — Payments on borrowings (5,662) (1,667) Proceeds from related party note payable 5,100 — Tax payments for restricted stock upon vesting (368) (1,086) Debt issuance costs — (164) Repayments of finance leases (76) (82) Net Cash Flows Provided by (Used in) Financing Activities $ 2,430 $ (2,999) Net (Decrease) Increase in Cash and Cash Equivalents (1,206) 858 Cash and Cash Equivalents, beginning of period 11,917 14,889 Cash and Cash Equivalents, end of period $ 10,711 $ 15,747 Supplemental cash flow disclosures: Cash paid for interest $ 1,664 $ 1,454 Fair value of net liabilities assumed in legal settlement $ (79) $ — Fair value of common stock issued in legal settlement $ (352) $ — ROU assets obtained in the exchange for lease liabilities: Operating leases $ 4,677 $ — SEC prior to completing“Company,” also “we,” “us,” and “our”), is a Business Combination. If, however, stockholder approvalmulti-brand restaurant company that develops, markets and acquires fast-casual and premium-casual dining restaurant concepts around the world, including corporate-owned stores and franchises located in the United States, Puerto Rico and Saudi Arabia.transactiontwo following brands:required by law, ora fast-casual “better burger” concept with 114 franchised and corporate-owned restaurants as of July 3, 2023, offering burgers, hot dogs, crispy chicken, hand-cut fries, frozen custard shakes, beer, wine and more.July 3, 2023 January 2, 2023 Corporate-owned Franchised Total Corporate-owned Franchised Total Total BurgerFi and Anthony's 87 87 174 85 89 174 BurgerFi stores, beginning of the period 25 89 114 25 93 118 BurgerFi stores opened — 5 5 3 8 11 BurgerFi stores acquired / (transferred) 2 (2) — (3) 3 — BurgerFi stores closed — (5) (5) — (15) (15) BurgerFi total stores, end of the period 27 87 114 25 89 114 Anthony's stores, beginning of period 60 — 60 61 — 61 Anthony's stores opened — — — — — — Anthony's stores closed — — — (1) — (1) Anthony's total stores, end of the period 60 — 60 60 — 60 decides to obtain stockholder approval for business or other legal reasons,closed one Burgerfi and one Anthony’s store.offercontinue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, as discussed below and elsewhere through the Quarterly Report on Form 10-Q, substantial doubt about the Company’s ability to redeem sharescontinue as a going concern exists. Please see Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as Risk Factors in conjunctionthe Company’s Annual Report on Form 10-K for the year ended January 2, 2023 (the “2022 Form 10-K”), for further information.proxy solicitation pursuantsyndicate of banks has approximately $52.8 million in financing outstanding as of July 3, 2023, and expires on September 30, 2025. The Credit Agreement contains numerous covenants, including those whereby the Company is required to meet certain trailing twelve-month quarterly financial ratios and a minimum liquidity requirement. The Company was in compliance with all of the covenants under the Credit Agreement as of July 3, 2023.proxy rulesconsolidated financial statements included within this report, in the case of Second 82nd SM, LLC v. BF NY 82, LLC et al., the Court entered an order granting the Landlord’s Motion for Summary Judgment and not pursuantordered a damages hearing on the motion. As a result, unless the parties otherwise agree to a settlement prior to the tender offer rules. Ifdamages hearing, the Company seeks stockholder approval in connection withexpects a Business Combination,judgment to be entered against it of at least approximately $1.2 million. The parties, however, continue to discuss possible settlement prior to the Company’s Sponsor anddamages hearing, including re-opening the BurgerFi restaurant, as well as the payment, including timing, of past due rent amounts to the Landlord. In addition, the Company is considering other Initial Stockholders have agreedalternatives, including the need to (a) vote their Founder Shares (as defined in Note 5), Placement Shares (as defined in Note 4) and any Public Shares held by them in favor of approving a Business Combination and (b) notrefinance or restructure its debt, sell assets, or seek to convert any shares in connection with a stockholder vote to approve a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote forraise additional capital, including debt or against the proposed transaction.The Company will have until September 16, 2019 (or such later date as may be approved by stockholders) to consummate a Business Combination (the “Combination Period”).equity. If the Company is unable to completeimplement one or more of these options or is otherwise unsuccessful in negotiating a Business Combination withinsettlement, which the Combination Period,Company believes is unlikely, and the court entered a final judgment against the Company, management believes it is possible that the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem 100%not be in compliance with certain of the outstanding Public Shares, atfinancial covenants in its Credit Agreement, which would constitute a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approvalbreach of the remaining stockholdersCredit Agreement and an event of default if not cured in accordance with its terms.Company’s boardlenders to call the debt sooner than its maturity date of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law. The proceeds deposited in the Trust Account could, however, become subject to claims of creditors. Therefore, the actual per-share redemption amount could be less than $10.10.The Initial Stockholders have (i) waived their redemption rights with respect to Founder Shares, Placement Shares and any Public Shares they may acquire during or after the Initial Public Offering in connection with the consummation of a Business Combination, (ii) waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares, Placement Shares and Placement Warrants (as defined in Note 4) if the Company fails to consummate a Business Combination within the Combination Period and (iii) agreed that they will not propose any amendment to the Company’s Amended and Restated Certificate of Incorporation that would affect public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the required time unless the Company provides the public stockholders with the opportunity to redeem their shares in conjunction with any such amendment. However, the Initial Stockholders will be entitled to liquidating distributions with respect to any Public Shares acquired if the Company fails to consummate a Business Combination or liquidates within the Combination Period. order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account below $10.10 per share. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Proposed Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiverthe lenders do call the debt during the next 12 months as the result of a covenant breach, the Company is deemednot forecasted to have the readily available funds to repay the debt, which raises substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements are issued.unenforceable againstin communication with the Landlord to negotiate a third party, the Sponsor will not be responsiblesettlement prior to the extentdamages hearing and is also considering other capital raising options to address any potential judgment, as well as any issues related to meeting the covenant requirements over the next 12 months. Management cannot, however, predict the results of any liability for such third party claims. negotiations or actions.Company will seekconsolidated financial statements do not include any adjustments related to reduce the possibilityrecoverability and classification of recorded asset amounts or the amounts and classification of liabilities that results from the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of presentationunaudited condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“(“U.S. GAAP”) for interim financial information and in accordance with the instructions tofor Form 10-Q and Article 10Rule 8-03 of Regulation S-X of the SEC. CertainS-X. Pursuant to these rules and regulations, certain information orand footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant toomitted. The accompanying condensed consolidated balance sheet as of January 3, 2023 is derived from the rules and regulationsCompany’s audited financial statements as of the SEC for interim financial reporting. Accordingly, they do not include all thethat date. Because certain information and footnotes necessary for a complete presentation of financial position, results of operations,footnote disclosures have been condensed or cash flows. In the opinion of management, the accompanying unauditedomitted, these condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)The accompanying unaudited condensedconsolidated financial statements should be read in conjunction with the Company’s prospectusaudited consolidated financial statements and notes thereto as filed with the SECof and declared effective on March 13, 2018, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on March 22, 2018. The interim results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any future interim periods.Emerging growth companyThe Company is an “emerging growth company,” as definedended January 2, 2023 contained in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act)2022 Form 10-K.comply withevaluate events occurring after July 3, 2023 for recognition and disclosure in the unaudited consolidated financial statements for the quarter and six month periods ended July 3, 2023. Events are evaluated based on whether they represent information existing as of July 3, 2023, which require recognition, or new or revisedevents occurring after July 3, 2023 which do not require recognition but require disclosure if the event is significant. We evaluated events occurring subsequent to July 3, 2023 through the date of issuance of these unaudited consolidated financial accounting standards. statements.JOBS Act provides that a company can electconsolidated financial statements present the consolidated financial position, results from operations and cash flows of BurgerFi International, Inc., and its wholly owned subsidiaries. All material balances and transactions between the entities have been eliminated in consolidation.opt out of the extended transition period and comply withprior year presentation to conform to the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s balance sheet with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.estimatesdisclosuredisclosures of contingent assets and liabilitiescontingencies at the date of the unaudited consolidated financial statements and the reported amounts of revenuesrevenue and expenses during the reporting period.Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual Actual results could differ significantly from those estimates.Cash and cash equivalentsconsidersreviewed all short-term investmentsrecently issued accounting pronouncements and concluded that they were not applicable or not expected to have a significant impact on the accompanying consolidated financial statements.original maturityunrelated third party for the sale of three months or less when purchasedsubstantially all of the assets used in connection with the operation of BF Dania Beach, LLC. The closing of this transaction has been delayed due to be cash equivalents. Theadditional negotiation that has been on-going. In the event the transaction is terminated, the Company did notwill begin operating this BurgerFi restaurant, and return the deposit of $0.9 million included in other current assets to the unrelated third-party purchaser. Assets used in the operations of BF Dania Beach, LLC totaling $0.7 million have any cash equivalentsbeen classified as held for sale in the accompanying consolidated balance sheets as of July 3, 2023 and January 2, 2023. In March 31, 2018 and December 31, 2017.Marketable securities held in Trust AccountAt March 31, 2018,2023, the assets held in the Trust Account were substantially held in U.S. Treasury Bills.Common stock subject to possible redemptionThe Company accountsapproved a plan for its common stock subject to possible redemption in accordancesale of an intangible asset of an Anthony’s location with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any)a carrying value of $0.8 million, which is classified as held for sale in the accompanying consolidated balance sheets as of July 3, 2023.(in thousands) July 3, 2023 January 2, 2023 Leasehold improvements $ 17,623 $ 17,029 Kitchen equipment and other equipment 8,450 8,196 Computers and office equipment 1,549 1,468 Furniture and fixtures 2,870 2,677 Vehicles 6 37 30,498 29,407 Less: Accumulated depreciation and amortization (12,251) (10,036) Property and equipment – net $ 18,247 $ 19,371 liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the controlsummary of the holder or subject to redemption uponcomponents of goodwill and intangible assets, net:July 3, 2023 January 2, 2023 (in thousands) Amount Accumulated Amortization Net Carrying Value Amount Accumulated Amortization Net Carrying Value Intangible assets subject to amortization: Franchise agreements $ 24,839 $ (9,019) $ 15,820 $ 24,839 $ (7,245) $ 17,594 BurgerFi trade names / trademarks 83,033 (7,035) 75,998 83,035 (5,650) 77,385 Anthony's trade names / trademarks 60,690 (3,372) 57,318 60,691 (2,360) 58,331 License agreement 1,177 (1,131) 46 1,176 (1,063) 113 VegeFi product 135 (34) 101 135 (28) 107 Subtotal $ 169,874 $ (20,591) $ 149,283 $ 169,876 $ (16,346) $ 153,530 Liquor licenses $ 5,930 $ — $ 5,930 $ 6,678 $ — $ 6,678 Total intangible assets, net $ 155,213 $ 160,208 Goodwill: BurgerFi $ — $ — Anthony's 31,621 31,621 Total $ 31,621 $ 31,621 occurrencequarters ended July 3, 2023 and June 30, 2022 and $4.2 million for the six months ended July 3, 2023 and June 30, 2022.uncertain events not solely withincontract liabilities included of which the Company’s control)current portion is classifiedincluded in other current liabilities and other noncurrent liabilities on our consolidated balance sheet is as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2018 and December 31, 2017, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.follows:OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)Income taxesThe Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable toSix Months Ended (in thousands) July 3, 2023 June 30, 2022 Balance, beginning of period $ 1,092 $2,577 Initial/Transfer franchise fees received 203 291 Revenue recognized for stores open and transfers during period (100) (253) Revenue recognized related to franchise agreement terminations (374) (433) Other unearned revenue (recognized) received (39) — Balance, end of period $ 782 $2,182 which the differences are expectedroyalty and other fees on our consolidated statement of operations shown was as follows:Quarter Ended Six Months Ended (in thousands) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Franchise Fees $ 380 $ 534 $ 513 $ 686 affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2018 and December 31, 2017, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.On December 22, 2017 the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Reform”) was signed into law. As a result of Tax Reform, the U.S. statutory tax rate was lowered from 35% to 21% effective January 1, 2018, among other changes. ASC Topic 740 requires companies to recognize the effect of tax law changes in the period of enactment; therefore, the Company was required to revalue its deferred tax assets and liabilities at the new rate. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain tax effects of Tax Reform.loss per common sharelossLoss per common share is computed by dividing net lossNet Loss by the weighted average number of common shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at March 31, 2018, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public Offering and private placementoutstanding to purchase 11,945,00015,063,800 shares of common stock and (2) 750,00075,000 shares of common stock and warrants to purchase 750,00075,000 shares of common stock in the unit purchase option, sold to the underwriters and their designees,(3) 1,724,639 shares of restricted stock units outstanding in the calculation of diluted lossincome per share, sinceand (4) the exerciseimpact of any dividends associated with our redeemable preferred stock. As the warrants andeffect of these on the exercise of the unit purchase option is contingent upon the occurrence of future events. As a result, diluted loss per common share is the same as basic income per common share for the periods.Reconciliationcomputation of net loss per common shareThe Company’s net income is adjusted for would have been anti-dilutive, they were excluded from the portionweighted average number of income that is attributable to common stock subject to redemption, as these shares only participate in the income of the Trust Account and not the losses of the Company. Accordingly, basicoutstanding.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTS(in thousands, except for per share data) Quarter Ended Six Months Ended Numerator: July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Net loss available to common stockholders - diluted $ (6,001) $ (60,377) $ (15,153) $ (73,937) Denominator: Diluted weighted-average shares outstanding 24,891,449 22,214,628 24,216,199 22,089,799 Basic and diluted net loss per common share $ (0.24) $ (2.72) $ (0.63) $ (3.35) 31, 2018
2023, the Company filed an answer to Mr. Gargiulo’s complaint and a counterclaim against Mr. Gargiulo relating to the breach of the asset purchase agreement discussed above. The matter is scheduled for trial in the second half of 2023. We believe that all Mr. Gargiulo claims are meritless, and the Company plans to vigorously defend these allegations. Management is unable to determine the likelihood of a loss or range of loss, if any, which may result from the case described above, and, therefore, no contingent liability has been recorded as of January 2, 2023 or July 3, 2023; any losses, however, may be material to the Company's financial position and results of operations. Three Months
Ended
March 31, 2018 Net income $ 22,449 Less: Income attributable to shares subject to redemption (40,310 ) Adjusted net loss $ (17,861 ) Weighted average shares outstanding, basic and diluted 2,690,740 Basic and diluted net loss per share $ (0.01 ) ConcentrationQuarter Ended Six Months Ended (in thousands) Classification July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Operating lease cost Occupancy and related expenses
Pre-opening costs
Store closure costs$ 3,218 $ 3,097 $ 6,463 $ 6,348 Finance lease cost: Amortization of right-of-use assets Depreciation and amortization expense 55 82 113 134 Interest on lease liabilities Interest expense 13 19 27 31 Less: Sublease income Occupancy and related expenses (47) (47) (94) (94) Total lease cost $ 3,239 $ 3,151 $ 6,509 $ 6,419 (in thousands) Operating Leases Finance Leases One Year $ 12,274 $ 142 Two Years 12,154 182 Three Years 11,687 167 Four Years 9,804 158 Five Years 8,173 152 Thereafter 10,217 208 Total undiscounted lease payments 64,309 1,009 Less: present value adjustment (11,146) (158) Total net lease liabilities $ 53,163 $ 851 July 3, 2023 June 30, 2022 Weighted-average remaining lease term (in years) Operating leases 5.8 6.4 Finance leases 5.9 6.6 Weighted-average discount rate Operating leases 7.1 % 6.0 % Finance leases 6.0 % 6.0 % (in thousands) July 3, 2023 January 2, 2023 Term loan $ 52,880 $ 54,507 Related party note payable 15,100 10,000 Revolving line of credit — 4,000 Other notes payable 744 780 Finance lease liability 851 933 Total Debt $ 69,575 $ 70,220 Less: Unamortized debt discount to related party note (688) (765) Less: Unamortized debt issuance costs (1,204) (1,441) Total Debt, net 67,683 68,014 Less: Short-term borrowings, including finance leases (3,485) (4,985) Total Long-term borrowings, including finance leases and related party note payable $ 64,198 $ 63,029 riskFinancial instrumentsas of July 3, 2023, with a maturity date of September 30, 2025.potentially subjectcertain delayed draw term loan (the “Delayed Draw Term Loan”) of $10.0 million, under the Credit Agreement, which is junior subordinated secured indebtedness, and also provided $5.1 million of new junior subordinated secured indebtedness, to the Company (collectively (the “Junior Indebtedness”), for a total of $15.1 million in junior subordinated secured debt on terms reasonably acceptable to the Required Lenders (as defined in the Credit Agreement), including, without limitation, that (1) such indebtedness shall not mature until at least two (2) years after the maturity date of the credit facility of September 30, 2025; (2) no payments of cash interest shall be made on such indebtedness until after the repayment in full of the obligations under the Credit Agreement; and (3) no scheduled or voluntary payments of principal shall be made until after the repayment in full of the obligations under the Credit Agreement.concentrationrepay the principal of the term loan in quarterly installments with the balance due at the maturity date, as follows:in thousands 2023 $ 3,254 2024 3,254 2025 46,372 Total $ 52,880 risk consist of cash accounts in a financial institution, which, at times may exceed the Federal depository insurance coverage of $250,000. At March 31, 2018, the Company had not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.Fair value of financial instrumentsThe fair valuesecured by substantially all of the Company’s assets and liabilities,incur interest on outstanding amounts at the following rates per annum through maturity:Time Period Interest Rate Through December 31, 2022 6.75% From January 1, 2023 through June 15 2023 6.75% From June 16, 2023 through December 31, 2023 6.75% From January 1, 2024 through June 15, 2024 7.25% From June 16, 2024 through maturity 7.75% qualify as financial instruments under ASC Topic 820, “Fair Value Measurementsresulted in a debt discount of approximately $1.3 million and Disclosures,” approximatesis being amortized over the carrying amounts representedperiod of the Delayed Draw Term Loan. For the quarter and six months periods ended July 3, 2023, the Company recorded $0.1 million of amortization of the debt discount, which is included within interest expense in the accompanying balance sheets, primarily dueconsolidated statements of operations.their short-term nature.Recently issued accounting standardsManagement does not believethe terms and that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effectcertain Guaranty and Security Agreement, dated February 24, 2023, by and among the Guarantors and the junior lender, (ii) is subject to the terms of that certain Intercreditor and Subordination Agreement dated February 24, 2023, by and between the Administrative Agent and the junior lender and acknowledged by the borrowers and the guarantors, and (iii) matures on the date that is the second anniversary of the maturity date under the Credit Agreement (the “NOTE 3. INITIAL PUBLIC OFFERINGPursuantQuarter Ended Six Months Ended (in thousands) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Interest on credit agreement $ 1,079 $ 1,024 $ 2,130 $ 1,830 Amortization of debt issuance costs 38 110 77 292 Amortization of related party note discount 130 128 237 255 Non-cash interest on redeemable preferred stock 1,042 963 2,064 1,908 Other interest expense (income) (78) 20 (218) 33 $ 2,211 $ 2,246 $ 4,289 $ 4,318 Initial Public Offering,amount that is more likely than not to be realized. For the quarter and six months ended June 30, 2022, the Company's effective income tax rate was 0.6%, differing from the U.S. corporate statutory federal income tax rate of 21%, and the difference is primarily the result of the valuation allowance applied to reduce the Company’s deferred tax assets to the amount that is more likely than not to be realized. As of July 3, 2023, the Company sold 11,500,000 units at a purchase pricehad unrecognized tax benefits of $10.00 per Unit, inclusive of 1,500,000 units sold$0.2 million.the underwriters on March 20, 2018 upon the underwriters’ election to exercise their over-allotment option in full. Each Unit consists of one share of common stock and one warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share (see Note 7).NOTE 4. PRIVATE PLACEMENTSimultaneously with the Initial Public Offering, the Initial Stockholders purchased an aggregate of 400,000 Private Placement Units, at $10.00 per Private Placement Unit for an aggregate purchase price of $4,000,000. On March 20, 2018, the Company consummated the sale of an additional 45,000 Private Placement Units at a price of $10.00 per Private Placement Unit, which were purchased by the Sponsor, generating gross proceeds of $450,000. Each Private Placement Unit consists of one share of common stock (“Placement Share”) and one warrant (“Placement Warrant”) to purchase one share of common stock at an exercise price of $11.50. The proceeds from the Private Placement Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Placement Warrants will expire worthless.NOTE 5. RELATED PARTY TRANSACTIONSFounder SharesIn November 2017, the Company issued an aggregate of 2,875,000issue 100,000,000 shares of common stock (“Founder Shares”) to Axis Public Ventures for an aggregate purchase pricewith a par value of $25,000. On March 9, 2018, Axis Public Ventures transferred 2,012,500 Founder Shares to certain other parties for nominal consideration, including 862,500 Founder Shares to Lion Point. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the Initial Stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders do not purchase any Public Shares in the Proposed Offering and excluding the Private Placement Units). As a result of the underwriters’ election to exercise their over-allotment option in full on March 20, 2018, 375,000 Founder’s Shares are no longer subject to forfeiture.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)The Initial Stockholders have agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned or sold until the earlier of six months after the date of the consummation of a Business Combination and the date on which the closing price$0.0001 per share. Holders of the Company’s common stock equals or exceeds $12.50 per share (as adjustedare entitled to one vote for share splits, share dividends, reorganizationseach share. At July 3, 2023 and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the Business Combination, or earlier if, subsequent to a Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange theirJanuary 2, 2023, there were 26,724,218 shares and 22,257,772 shares of common stock for cash, securities or other property.Related Party AdvancesDuring the period ended March 31, 2018, the Company received an aggregate of $67,013 in advances from an affiliate of the Sponsor for costs associated with the Initial Public Offering. The advances were non-interest bearing, unsecured and due on demand. The Company repaid the advances in full, accordingly, as of March 31, 2018, there were no advances outstanding.Promissory Note – Related PartyOn August 1, 2017, the Company issued to an affiliate of the Sponsor an unsecured promissory note, pursuant to which the Company borrowed an aggregate principal amount of $122,839 (the “Promissory Note”). The Promissory Note was non-interest bearing and payable on the earlier to occur of (i) December 31, 2018, (ii) the consummation of the Initial Public Offering or (iii) the date on which the Company determined not to proceed with the Initial Public Offering. The Promissory Note was repaid at the closing of the Initial Public Offering.Administrative Services AgreementThe Company entered into an agreement whereby, commencing on March 13, 2018 through the earlier of the consummation of a Business Combination or the Company’s liquidation, the Company will pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities and administrative support. For the three months ended March 31, 2018, the Company incurred $5,000 in fees for these services, which such amount is included in operating costs in the accompanying condensed statements of operations and in accrued expenses in the accompanying balance sheets at March 31, 2018.Related Party LoansIn order to finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, as may be required (“Working Capital Loans”). Each Working Capital Loan would be evidenced by a promissory note. The Working Capital Loans would either be paid upon consummation of a Business Combination, without interest, or, at the holder’s discretion, up to $1,500,000 of the Working Capital Loans may be converted into units at a price of $10.00 per unit. The units would be identical to the Private Placement Units. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.NOTE 6. COMMITMENTS AND CONTINGENCIESRegistration RightsPursuant to a registration rights agreement entered into on March 13, 2018, the holders of the Founder Shares, Private Placement Units (and their underlying securities) and any Units that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Private Placement Units or Units issued to the Sponsor, officers, directors or their affiliates in payment of Working Capital Loans made to the Company (in each case, including the underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)Business Combination Marketing AgreementThe Company has engaged EarlyBirdCapital, Inc. (“EarlyBirdCaptial”) as an advisor in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss a potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing securities in connection with the Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with a Business Combination. The Company will pay EarlyBirdCapital a cash fee of $4,025,000 for such services upon the consummation of a Business Combination (exclusive of any applicable finders’ fees which might become payable). Forward Purchase AgreementLion Point has entered into a contingent forward purchase agreement with the Company to purchase, in a private placement for aggregate gross proceeds of $30,000,000, to occur concurrently with the consummation of the Company’s initial Business Combination, 3,000,000 units at $10.00 per unit, on substantially the same terms as the sale of Units in the Initial Public Offering. The funds from the sale of these units may be used as part of the consideration to the sellers in the initial Business Combination; any excess funds may be used for the working capital needs of the post-transaction company. This agreement is independent of the percentage of stockholders electing to redeem their Public Shares and may provide the Company with an increased minimum funding level for the initial Business Combination. The contingent forward purchase agreement is subject to conditions, including Lion Point giving the Company its irrevocable written consent to purchase the units no later than five days after the Company notifies Lion Point of the Company’s intention to meet to consider entering into a definitive agreement for a proposed Business Combination. Lion Point granting its consent to the purchase is entirely within its sole discretion. Accordingly, if it does not consent to the purchase, it will not be obligated to purchase the units.NOTE 7. STOCKHOLDERS’ EQUITYOn March 13, 2018, the Company filed an Amended and Restated Certificate of Incorporation such that theAt March 31, 2018As of July 3, 2023 and December 31, 2017,January 2, 2023, there were no2,120,000 shares of preferred stock issued or outstanding.Common StockMarch 13, 2018,February 24, 2023, the Company filed an Amendedamended and Restated Certificaterestated certificate of Incorporation suchdesignation, (the “A&R CoD”), which among other matters, added a provision providing that in the event the Company is authorizedfails to issue 100,000,000timely redeem any shares of common stockSeries A Preferred Stock on November 3, 2027, the applicable dividend rate shall automatically increase to the lesser of (A) the sum of 10% plus the 2% applicable default rate (with such aggregate rate increasing by an additional 0.35% per quarter from and after November 3, 2027), or (B) the maximum rate that may be applied under applicable law, unless waived in writing by a majority of the outstanding shares of Series A Junior Preferred Stock.par value of $0.0001 per share. HoldersQualified Financing (as defined in the A&R CoD) on November 3, 2027 (a “Default”), the Company agrees to promptly commence a debt or equity financing transaction or sale process to solicit proposals for the sale of the Company’s common stock are entitledCompany and its subsidiaries (or, alternatively, the sale of material assets) designed to one voteyield the maximum cash proceeds to the Company available for each share. At March 31, 2018 and December 31, 2017, there were 3,758,206 and 2,875,000 sharesredemption of common stock issued and outstanding (excluding 11,061,794 and -0- shares of common stock subject to possible redemption), respectively.WarrantsThe Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b)Series A Junior Preferred Stock as promptly as practicable, but in any event, within 12 months from the closingdate of the Initial Offering; provided thatDefault. If on or after November 3, 2026, the Company has an effective registration statement underis aware that it is reasonably unlikely to have sufficient cash to timely effect the Securities Act covering the shares of common stock issuable upon exerciseredemption in full of the Public Warrants and a current prospectus relating to them is available. The Company has agreed that as soon as practicable, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the Public Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of Business Combination, warrant holders may, until such time as there is an effective registration statement and during any periodSeries A Junior Preferred Stock when first due, the Company shall, have failedprior to maintainsuch anticipated due date, take reasonable steps to engage an effective registration statement, exercise warrants oninvestment banking firm of national standing (and other appropriate professionals) to conduct preparatory work for such a cashless basis pursuantfinancing transaction and sale process of the Company and its subsidiaries to provide for such transaction to occur as promptly as possible after any failure for a timely redemption of the Series A Junior Preferred Stock.exemption provided by Section 3(a)(9)Common Stock and may be redeemed at the option of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will notCompany at any time and must be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)The Company may redeem the Public Warrants:●in whole and not in part;●at a price of $0.01 per warrant;●at any time during the exercise period;●upon a minimum of 30 days’ prior written notice of redemption; and●if, and only if, the last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders.●if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.The Placement Warrants will be identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Placement Warrants and the common stock issuable upon the exercise of the Placement Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Placement Warrants will be redeemableredeemed by the Company in limited circumstances. The Series A Junior Preferred Stock shall not have voting rights or conversion rights.exercisable by such holders on the same basis as the Public Warrants.IfSubsidiariescallshad the Public Warrantsfollowing warrants and options outstanding: 15,063,800 warrants outstanding, each exercisable for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuanceone share of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.Unit Purchase OptionOn March 13, 2018, the Company sold EarlyBirdCapital (and its designees), for $100, an option to purchase up to 750,000 Units exercisable at $10.00 per Unit (or an aggregate exercise price of $7,500,000) commencing$11.50 including 11,468,800 in public warrants, 3,000,000 in private placement warrants (“private warrants”), 445,000 in Private Warrants and 150,000 in Working Capital Warrants, 75,000 Unit Purchase Option (“UPO”) units that are exercisable for one share of common stock at an exercise price of $10.00 and warrants exercisable for one share of common stock at an exercise price of $11.50. The public warrants expire in December 2025.lateraccompanying consolidated balance sheets. The loss on change in fair value of March 13, 2019warrant liabilities for the quarter and the consummation of a Business Combination. The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s option,six months ended ended July 3, 2023 was $0.3 million and expires on March 17, 2023. The Units issuable upon exercise of this option are identical to those offered$0.4 million, respectively, and is recognized in the Initial Public Offering.accompanying consolidated statements of operations. The Company accountedgain on change in the fair value of warrant liabilities for the unit purchase option, inclusivequarter and six months ended June 30, 2022 was $1.9 million and $1.3 million, respectively, and is recognized in the accompanying consolidated statements of operations.receipt of $100 cash payment, as an expense of the Initial Public Offering resulting in a charge directly to stockholders’ equity. warrant liability:(in thousands) Warrant liability at January 2, 2023 $ 195 Loss during the period 391 Warrant liability at July 3, 2023 $ 586 Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at January 2, 2023 1,445,600 $ 11.68 Granted 744,960 1.23 Vested (328,968) 13.84 Forfeited (161,698) 6.37 Non-vested at July 3, 2023 1,699,894 $ 7.15 purchase option was estimatedawards to be approximately $2,633,621 (or $3.51 per Unit)recognized over a weighted average period of 1.4 years.Items Measured at Fair Value at July 3, 2023 (in thousands) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Warrant liability — 586 — Total $ — $ 586 $ — Items Measured at Fair Value at January 2, 2023 (in thousands) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Warrant liability — 195 — Total $ — $ 195 $ — fair value ofBlack-Scholes model requires us to make assumptions and judgments about the unit purchase option granted tovariables used in the underwriters was estimated as ofcalculation, including the date of grant using the following assumptions: (1)expected term, expected volatility, of 35%, (2) risk-free interest rate, of 2.65%dividend rate and (3) expected life of five years.service period. The optioncalculated warrant price for private warrants was $0.16 and such units purchased pursuant to$0.05 on July 3, 2023 and January 2, 2023.option, as well as the common stock underlying such units, the warrants included in such units, and the shares underlying such warrants, have been deemed compensation by FINRA andBlack-Scholes are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA’s NASDAQ Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date of Initial Public Offering except to any underwriter and selected dealer participatingnoted in the Initial Public Offeringtable below:July 3, 2023 January 2, 2023 Risk-free interest rate 4.66 % 4.14 % Expected life in years 2.5 3.0 Expected volatility 83.0 % 68.0 % Expected dividend yield — % — % their bona fide officers or partners. The option grants to holders demand and “piggy back” rights for periods of five and seven years, respectively, from March 13, 2018 with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or the Company’s recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of common stock at a price below its exercise price.OPES ACQUISITION CORP.NOTES TO CONDENSED FINANCIAL STATEMENTSMarch 31, 2018(Unaudited)8. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:Level 1:Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.Level 2:Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.Level 3:Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.The following table presents information about the Company’s assets that are measured at fair value on a recurringnon-recurring basis at March 31, 2018include our long-lived assets and December 31, 2017,definite-lived intangible assets which are adjusted to fair value upon impairment. In determining fair value, we used an income-based approach. As a number of assumptions and indicatesestimates were involved that are largely unobservable, they are classified as Level 3 inputs within the fair value hierarchyhierarchy. Assumptions used in these forecasts are consistent with internal planning, and include revenue growth rates, royalties, gross margins, and operating expense in relation to the current economic environment and the Company’s future expectations.valuation inputsCompany’s performance.utilized to determine such fair value:Description Level March 31,
2018 December 3,
2017 Assets: Cash and marketable securities held in Trust Account 1 $ 116,247,875 $ — 9. SUBSEQUENT EVENTSevaluates subsequent eventsbelieves that this adjusted measure provides a baseline for analyzing trends in its underlying business.transactionsa reconciliation of adjusted EBITDA to net loss by segment:Quarter Ended Consolidated BurgerFi Anthony's (in thousands) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Revenue by Segment $ 43,427 $ 45,298 $ 11,567 $ 13,458 $ 31,860 $ 31,840 Adjusted EBITDA Reconciliation by Segment: Net loss $ (6,001) $ (60,377) $ (5,159) $ (21,726) $ (842) $ (38,651) Goodwill impairment — 55,168 — 17,505 — 37,663 Lease termination recovery (42) — (42) — — Share-based compensation expense 556 909 529 909 27 — Depreciation and amortization expense 3,295 4,730 2,147 2,616 1,148 2,114 Interest expense 2,211 2,246 1,004 992 1,207 1,254 Restructuring costs 1,127 — 413 — 714 — Merger, acquisition and integration costs 299 1,893 234 1,846 65 47 Legal settlements 228 187 225 187 3 — Store closure costs 50 52 9 52 41 — Loss (gain) on change in value of warrant liability 318 (1,858) 318 (1,858) — — Income tax expense (benefit) 2 (335) — (341) 2 6 (Gain) loss on sale of assets (10) — (6) — (4) — Adjusted EBITDA $ 2,033 $ 2,615 $ (328) $ 182 $ 2,361 $ 2,433 Six Months Ended Consolidated BurgerFi Anthony's (in thousands) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Revenue by Segment $ 89,154 $ 90,228 $ 24,148 $ 25,853 $ 65,005 $ 64,375 Adjusted EBITDA Reconciliation by Segment: Net loss $ (15,153) $ (73,937) (14,757) $ (34,686) $ (396) $ (39,251) Goodwill impairment — 55,168 — 17,505 — 37,663 Lease termination recovery (42) — (42) — — — Employee retention credits — — — — — — Share-based compensation expense 5,230 8,285 5,203 8,285 27 — Depreciation and amortization expense 6,522 9,174 4,237 5,123 2,285 4,051 Interest expense 4,289 4,318 1,922 1,957 2,367 2,361 Restructuring costs 2,044 — 1,078 — 966 — Merger, acquisition and integration costs 627 2,304 562 2,191 65 113 Legal settlements 510 312 507 312 3 — Store closure costs 171 566 74 586 97 (20) Loss (gain) on change in value of warrant liability 391 (1,324) 391 (1,324) — — Pre-opening costs — 474 — 474 — — Income tax expense (benefit) 2 (447) — (451) 2 4 (Gain) loss on sale of assets (10) — (6) — $ (4) — Adjusted EBITDA $ 4,581 $ 4,893 $ (831) $ (28) $ 5,412 $ 4,921 occur after the balance sheet date upmay be included in our determination of Adjusted EBTIDA, as well as modifications to certain covenants for leverage and fixed charge ratios.date that theconsolidated financial statements were issued. Based uponincluded within this review,report for subsequent event regarding the case of Second 82nd SM, LLC v. BF NY 82, LLC et al., on August 14, 2023 the Court entered an order granting the Landlord’s Motion for Summary Judgment and ordered a damages hearing on the motion.did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. 12Forward-Looking StatementsThis Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27AFinancial Condition and Results of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to “we”, “us”, “our” or the “Company” are to Opes Acquisition Corp., except where the context requires otherwise. Operations.condensedunaudited consolidated financial statements and related notes thereto included elsewhere in this report.OverviewWe are a blank check company formed under the laws of the State of DelawareQuarterly Report on July 24, 2017 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (“business combination”). Our efforts to identify a prospective target business is not limited to a particular industry or geographic region although we are currently focusing our search for target businesses in Mexico.We consummated our initial public offering of (“Initial Public Offering”) of 10,000,000 units, each consisting of one share of common stock and one warrant to purchase one share of common stock for $11.50 per share, on March 16, 2018. On March 20, 2018, we consummated the sale of an additional 1,500,000 units subject to the underwriters’ over-allotment option. All activity through March 16, 2018 relates to our formation and the Initial Public Offering. Since March 16, 2018, we have been searching for a target business with which to complete an initial business combination.Results of OperationsWe have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to March 31, 2018 were organizational activities and those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. Following the Initial Public Offering, we do not expect to generate any operating revenues until after the completion of our Business Combination. We expect to generate non-operating income in the form of interest income on cash and marketable securities held after the Initial Public Offering. There has been no significant change in our financial position and no material adverse change has occurred since the date of our audited financial statements included in our registration statement for the Initial Public Offering. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),Form 10-Q, as well as the audited consolidated financial statements and the related notes thereto in our Annual Report on Form 10-K for due diligence expenses.For the three monthsfiscal year ended March 31, 2018, we had net income of $22,449, which consists of interest income on marketable securities heldJanuary 2, 2023 (the “2022Trust Accountforward-looking statements. Factors that could cause such differences are discussed in the sections of $83,293this Quarterly Report on Form 10-Q titled “Forward-Looking and Cautionary Statements” and “Item 1A. Risk Factors,” and in Part I. “Item 1A. Risk Factors” in the 2022 Form 10-K.unrealized gain on marketable securities heldexceptional, all-natural premium “better burger” experience in a refined, contemporary environment. BurgerFi’s chef-driven menu offerings and eco-friendly restaurant design drive our Trust Accountbrand communication. It offers a classic American menu of $14,582, offsetpremium burgers, hot dogs, crispy chicken, hand-cut fries, frozen custard shakes, beer, wine and more. Originally founded in 2011 in Lauderdale-by-the-Sea, Florida, the purpose was simple – “RedeFining” the way the world eats burgers by operating costs of $69,458 and a provision for income taxes of $5,968.Liquidity and Capital ResourcesOn March 16, 2017, we consummated the Initial Public Offering of 10,000,000 Unitsproviding an upscale burger offering, at a fast-casual price point. BurgerFi is committed to an uncompromising and rewarding dining experience that promises fresh food of $10.00 per Unit, generating gross proceedstransparent quality. Since its inception, BurgerFi has grown to 114 BurgerFi locations, and as of $100,000,000. Simultaneously withJuly 3, 2023, was comprised of 27 corporate-owned restaurants and 86 franchised restaurants in two countries including 21 states within the closing of the Initial Public Offering, we consummated the sale of 400,000 Private Placement Units to Axis Public Ventures, Lion Point Capital and the other Initial Stockholders of the Company, generating gross proceeds of $4,000,000.On March 20, 2018, in connection with the underwriters’ exercise of their over-allotment option in full, we consummated the sale of an additional 1,500,000 Units and the sale of an additional 45,000 Private Placement Units at a price of $10.00 per Unit, generating total gross proceeds of $15,450,000.Following the Initial Public Offering, the exercise of the over-allotment option and the sale of the Private Placement Units, a total of $116,150,000 was placed in the Trust Account. We incurred $2,731,946 in Initial Public Offering related costs, including $2,300,000 of underwriting fees and $431,946 of other costs.As of March 31, 2018, we had cash and marketable securities held in the Trust Account of $116,247,875 (including approximately $98,000 of interest income) consisting of U.S. treasury bills with a maturity of 180 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through March 31, 2018, we did not withdraw any funds from the interest earned on the Trust Account.For the three months ended March 31, 2018, cash used in operating activities was $43,445. Net income $22,449 was impacted by interest earned on marketable securities held in the Trust Account of $83,293 and an unrealized gain on marketable securities held in our Trust Account of $14,582. Changes in operating assets and liabilities used $31,981 of cash from operating activities.We intend to use substantially all of the funds held in the Trust Account to acquire a target business or businesses and to pay our expenses relating thereto, including a fee payable to EarlyBirdCapital. To the extent that our capital stock or debt is used, in whole or in part, as consideration to effect a Business Combination, the remaining proceeds held in the Trust AccountUnited States, as well as any other net proceeds not expended will be used as working capital to financePuerto Rico.operations2023 edition of the target business. Such working capital funds could be usednationally acclaimed SOBE Wine and Food Festival and “Best Fast Food Burger” in USA Today’s 10Best 2023 Readers’ Choice Awards for its BBQ Rodeo Burger, "Best Fast Casual Restaurant" in USA Today's 10Best 2023 Readers' Choice Awards for the third consecutive year, QSR Magazine's Breakout Brand of 2020 and Fast Casual's 2021 #1 Brand of the Year. In 2021, Consumer Reports’awarded BurgerFi an “A-Grade Angus Beef” rating for the third consecutive year.wayshandcrafted sandwiches and salads. The restaurants also feature a deep wine and craft beer selection to round out the menu. The pizzas are prepared using a unique coal-fired oven to quickly seal in natural flavors while creating a lightly charred crust. Anthony’s provides a differentiated offering among its casual dining peers driven by its coal-fired oven, which enables the use of fresh, high-quality ingredients with quicker ticket times.continuing or expandingFlorida (28), Pennsylvania (11), New Jersey (8), New York (5), Massachusetts (4), Delaware (2), Maryland (1), and Rhode Island (1).target business’ operations, for strategic acquisitionsfollowing sources: (i) restaurant sales, (ii) royalty and forother fees, consisting primarily of royalties based on a percentage of sales reported by franchised restaurants and paid by franchisees, and (iii) franchise fees, consisting primarily of licensing fees paid by franchisees.researchoperating, and developmentgrowth initiatives:Consolidated Quarter Ended Six Months Ended (in thousands except for percentage data) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Systemwide Restaurant Sales $ 70,683 $ 74,292 $ 144,128 $ 147,387 Systemwide Restaurant Sales Growth (5) % (2) % (2) % 2 % Systemwide Restaurant Same-Store Sales Growth (5) % (3) % (3) % — % Corporate-Owned Restaurant Sales $ 40,808 $ 42,058 $ 84,118 $ 84,035 Corporate-Owned Restaurant Sales Growth (3) % 5 % — % 9 % Corporate-Owned Restaurant Same-Store Sales Growth (3) % — % (1) % 4 % Franchise Restaurant Sales $ 29,875 $ 32,233 $ 60,010 $ 63,352 Franchise Restaurant Sales Growth (7) % (9) % (5) % (6) % Franchise Restaurant Same-Store Sales Growth (8) % (7) % (5) % (5) % Digital Channel % of Systemwide Sales 31 % 35 % 32 % 36 % Quarter Ended July 3, 2023 June 30, 2022 (in thousands, except for percentage data) BurgerFi Anthony's BurgerFi Anthony's2 Systemwide Restaurant Sales $ 38,823 $ 31,860 $ 42,452 $ 31,840 Systemwide Restaurant Sales Growth (9) % — % (4) % 2 % Systemwide Restaurant Same-Store Sales Growth (10) % 1 % (9) % 3 % Corporate-Owned Restaurant Sales $ 8,948 $ 31,860 $ 10,219 $ 31,840 Corporate-Owned Restaurant Sales Growth (12) % — % 17 % 2 % Corporate-Owned Restaurant Same-Store Sales Growth (15) % 1 % (14) % 3 % Franchise Restaurant Sales $ 29,875 $ — $ 32,233 N/A Franchise Restaurant Sales Growth (7) % — % (9) % N/A Franchise Restaurant Same-Store Sales Growth (8) % — % (7) % N/A Digital Channel % of Systemwide Sales 31 % 32 % 34 % 36 % Six Months Ended July 3, 2023 June 30, 2022 (in thousands, except for percentage data) BurgerFi Anthony's BurgerFi Anthony's2 Systemwide Restaurant Sales $ 79,123 $ 65,005 $ 83,012 $ 64,375 Systemwide Restaurant Sales Growth (5) % 1 % (1) % 7 % Systemwide Restaurant Same-Store Sales Growth (6) % 2 % (6) % 8 % Corporate-Owned Restaurant Sales $ 19,113 $ 65,005 $ 19,660 $ 64,375 Corporate-Owned Restaurant Sales Growth (3) % 1 % 17 % 7 % Corporate-Owned Restaurant Same-Store Sales Growth (11) % 2 % (11) % 8 % Franchise Restaurant Sales $ 60,010 $ — $ 63,338 N/A Franchise Restaurant Sales Growth (5) % — % (6) % N/A Franchise Restaurant Same-Store Sales Growth (5) % — % (8) % N/A Digital Channel % of Systemwide Sales 31 % 33 % 35 % 37 % completion of our Business Combination ifCompany, however, the funds available to us outside of the Trust Account were insufficient to cover such expenses.As of March 31, 2018, we had cash of $559,571 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and completeCompany records royalty revenue based as a Business Combination.Lion Point has entered into a contingent forward purchase agreement with us to purchase, in a private placement for aggregate gross proceeds of $30,000,000, to occur concurrently with the consummation of our initial Business Combination, 3,000,000 units at $10.00 per unit, on substantially the same terms as the sale of Units in the Initial Public Offering. The funds from the sale of these units may be used as part of the consideration to the sellers in the initial Business Combination; any excess funds may be used for the working capital needs of the post-transaction company. This agreement is independent of the percentage of stockholders electing to redeem their Public Shares and may provide us with an increased minimum funding level for the initial Business Combination. The contingent forward purchase agreementSystemwide Restaurant Sales. Systemwide Restaurant Sales is subject to conditions, including Lion Point giving us its irrevocable written consent to purchase the units no later than five days after we notify Lion Point of our intention to meet to consider entering into a definitive agreement for a proposed Business Combination. Lion Point granting its consent to the purchase is entirely within its sole discretion. Accordingly, if it does not consent to the purchase, it will not be obligated to purchase the units.In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor, our officers and directors or their affiliates may, but are not obligated to, loan us funds from time to time or at any timepresented as may be required. If we complete a Business Combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into Units at a price of $10.00 per Unit at the option of the lender. The Units would be identical to the Private Placement Units. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.We do not believe we will need to raise additional fundsinformational data in order to meetunderstand the expenditures requiredaggregation of franchised stores sales, ghost kitchen, and corporate-owned store sales performance. Systemwide Restaurant Sales growth refers to the percentage change in sales at all franchised restaurants, ghost kitchens, and corporate-owned restaurants in one period from the same period in the prior year. Systemwide Restaurant Same-Store Sales growth refers to the percentage change in sales at all franchised restaurants, ghost kitchens, and corporate-owned restaurants once the restaurant has been in operation after 14 months. See definition below under operatingSame-Store Sales.business. However, if our estimatestore base, which excludes the impact of new stores and closed stores in both periods under comparison. We include a restaurant in the calculation of Same-Store Sales once it has been in operation for 14 months. A restaurant that is temporarily closed is included in the Same-Store Sales computation. A restaurant that is closed permanently, such as upon termination of the costslease or other permanent closure, is immediately removed from the Same-Store Sales computation. Our calculation of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less thanSame-Store Sales may not be comparable to others in the actual amounts necessaryindustry.do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant numberevaluate the performance of our public shares upon completion ofinvestments made in our Business Combination, in which case we may issue additional securities or incur debt in connectiondigital platform and partnerships with such Business Combination. Subjectthird party delivery partners. We believe our digital platform capabilities are a vital element to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion ofcontinuing to serve our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.Off-Balance Sheet ArrangementsWe did not have any off-balance sheet arrangements as of March 31, 2018.Contractual obligationsWe do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor an aggregate monthly fee of $10,000 for office space, utilities and administrative support provided to the Company. We began incurring these fees on March 13, 2018,customers and will continue to incur these fees monthly untilbe a differentiator for the earlierCompany as compared to some of our competitors. Digital Channel as % of Systemwide Sales are indicative of the completion of a Business Combinationsales placed through our digital platforms and the Company’s liquidation.Critical Accounting Policiespreparationtables below present our results of operations as reported in our consolidated financial statements and related disclosures in conformityaccordance with accounting principles generally accepted in the United States (“U.S. GAAP”).Quarter Ended Six Months Ended (in thousands, except for per share data) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Revenue Restaurant sales $ 40,808 $ 42,236 $ 84,124 84,592 Royalty and other fees 2,190 2,611 4,160 4,714 Royalty - brand development and co-op 429 451 870 922 Total Revenue 43,427 45,298 89,154 90,228 Restaurant level operating expenses: Food, beverage and paper costs 10,772 12,545 22,382 25,352 Labor and related expenses 12,699 12,328 25,916 24,910 Other operating expenses 7,760 7,421 15,216 14,613 Occupancy and related expenses 3,930 3,890 7,763 7,725 General and administrative expenses 5,812 7,406 12,388 13,432 Depreciation and amortization expense 3,295 4,730 6,522 9,174 Share-based compensation expense 556 909 5,230 8,285 Brand development, co-op and advertising expenses 933 1,126 2,029 1,839 Goodwill and intangible asset impairment — 55,168 — 55,168 Restructuring costs and other charges, net 1,135 52 2,174 1,040 Total Operating Expenses 46,892 105,575 99,620 161,538 Operating Loss (3,465) (60,277) (10,466) (71,310) Interest expense, net (2,211) (2,246) (4,289) (4,318) Gain on change in value of warrant liability (318) 1,858 (391) 1,324 Other loss (5) (47) (5) (80) Loss before income taxes (5,999) (60,712) (15,151) (74,384) Income tax expense (2) 335 (2) 447 Net loss $ (6,001) $ (60,377) $ (15,153) $ (73,937) Quarter Ended Six Months Ended (in thousands) July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 BurgerFi $ 11,567 $ 13,458 $24,149 $ 25,853 Anthony’s 31,860 31,840 65,005 64,375 Total Consolidated $ 43,427 $ 45,298 $ 89,154 $ 90,228 Quarter Ended July 3, 2023 June 30, 2022 (in thousands, except for percentage data) In dollars As a % of restaurant sales In dollars As a % of restaurant sales Consolidated: Restaurant Sales $ 40,808 100 % $ 42,236 100 % Restaurant level operating expenses: Food, beverage and paper costs 10,772 26.4 % 12,545 29.7 % Labor and related expenses 12,699 31.1 % 12,328 29.2 % Other operating expenses 7,760 19.0 % 7,421 17.6 % Occupancy and related expenses 3,930 9.6 % 3,890 9.2 % Total $ 35,161 86.2 % $ 36,184 85.7 % Anthony's: Restaurant Sales $ 31,860 100 % $ 31,840 100 % Restaurant level operating expenses: Food, beverage and paper costs 8,076 25.3 % 9,133 28.7 % Labor and related expenses 9,848 30.9 % 9,426 29.6 % Other operating expenses 5,759 18.1 % 5,313 16.7 % Occupancy and related expenses 3,003 9.4 % 2,988 9.4 % Total $ 26,686 83.8 % $ 26,860 84.4 % BurgerFi: Restaurant Sales $ 8,948 100 % $ 10,396 100 % Restaurant level operating expenses: Food, beverage and paper costs 2,696 30.1 % 3,412 32.8 % Labor and related expenses 2,851 31.9 % 2,902 27.9 % Other operating expenses 2,001 22.4 % 2,108 20.3 % Occupancy and related expenses 927 10.4 % 902 8.7 % Total $ 8,475 94.7 % $ 9,324 89.7 % Six Months Ended July 3, 2023 June 30, 2022 (in thousands, except for percentage data) In dollars As a % of restaurant sales In dollars As a % of restaurant sales Consolidated: Restaurant Sales $ 84,124 100 % $ 84,592 100 % Restaurant level operating expenses: Food, beverage and paper costs 22,382 26.6 % 25,352 30.0 % Labor and related expenses 25,916 30.8 % 24,910 29.4 % Other operating expenses 15,216 18.1 % 14,613 17.3 % Occupancy and related expenses 7,763 9.2 % 7,725 9.1 % Total $ 71,277 84.7 % $ 72,600 85.8 % Anthony's: Restaurant Sales $ 65,005 100 % $ 64,375 100 % Restaurant level operating expenses: Food, beverage and paper costs 16,738 25.7 % 18,910 29.4 % Labor and related expenses 20,089 30.9 % 19,259 29.9 % Other operating expenses 11,128 17.1 % 10,562 16.4 % Occupancy and related expenses 5,957 9.2 % 5,860 9.1 % Total $ 53,912 82.9 % $ 54,591 84.8 % BurgerFi: Restaurant Sales $ 19,119 100 % $ 20,217 100 % Restaurant level operating expenses: Food, beverage and paper costs 5,644 29.5 % 6,442 31.9 % Labor and related expenses 5,827 30.5 % 5,651 28.0 % Other operating expenses 4,088 21.4 % 4,051 20.0 % Occupancy and related expenses 1,807 9.5 % 1,865 9.2 % Total $ 17,366 90.8 % $ 18,009 89.1 % GAAP”Adjusted EBITDA”) requires. We define Adjusted EBITDA as net loss before goodwill impairment, lease termination recovery, share-based compensation expense, depreciation and amortization expense, interest expense (which includes accretion on the value of preferred stock and interest accretion on related party note), restructuring costs, merger, acquisition and integration costs, legal settlements, store closure costs, loss (gain) on change in value of warrant liability, income tax expense (benefit) and (gain) loss on sale of assets.Consolidated BurgerFi Anthony's July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Net loss $ (6,001) $ (60,377) $ (5,159) $ (21,726) $ (842) $ (38,651) Goodwill impairment — 55,168 — 17,505 — 37,663 Lease termination recovery (42) — (42) — — Share-based compensation expense 556 909 529 909 27 — Depreciation and amortization expense 3,295 4,730 2,147 2,616 1,148 2,114 Interest expense 2,211 2,246 1,004 992 1,207 1,254 Restructuring costs 1,127 — 413 — 714 — Merger, acquisition and integration costs 299 1,893 234 1,846 65 47 Legal settlements 228 187 225 187 3 — Store closure costs 50 52 9 52 41 — Loss (gain) on change in value of warrant liability 318 (1,858) 318 (1,858) — — Income tax expense (benefit) 2 (335) — (341) 2 6 (Gain) loss on sale of assets (10) — (6) — (4) — Adjusted EBITDA $ 2,033 $ 2,615 $ (328) $ 182 $ 2,361 $ 2,433 Consolidated BurgerFi Anthony's July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 July 3, 2023 June 30, 2022 Net (loss) income $ (15,153) $ (73,937) $ (14,757) $ (34,686) $ (396) $ (39,251) Goodwill impairment — 55,168 — 17,505 — 37,663 Lease termination recovery (42) — (42) — — Share-based compensation expense 5,230 8,285 5,203 8,285 27 — Depreciation and amortization expense 6,522 9,174 4,237 5,123 2,285 4,051 Interest expense 4,289 4,318 1,922 1,957 2,367 2,361 Restructuring costs 2,044 — 1,078 — 966 — Merger, acquisition and integration costs 627 2,304 562 2,191 65 113 Legal settlements 510 312 507 312 3 — Store closure costs 171 566 74 586 97 (20) Loss (gain) on change in value of warrant liability 391 (1,324) 391 (1,324) — — Pre-opening costs — 474 — 474 — — Income tax benefit 2 (447) — (451) 2 4 Loss (gain) on sale of assets (10) — (6) — (4) — Adjusted EBITDA $ 4,581 $ 4,893 $ (831) $ (28) $ 5,412 $ 4,921 make estimatesthe consolidated financial statements included within this report, as well as Risk Factors included in our 2022 Form 10-K for a discussion of the potential material consequences to such an event.assumptions that affectmay continue to further implement price increases to mitigate the reported amountsinflationary effects of food and labor costs, however, we cannot predict the long-term impact of these negative economic conditions on our restaurant profitability.Six Months Ended (in thousands) July 3, 2023 June 30, 2022 Net cash (used in) provided by: Operating activities $ (2,616) $ 3,888 Investing activities (1,020) (31) Financing activities 2,430 (2,999) Net (decrease) increase in cash $ (1,206) $ 858 disclosureresulted in a net liability decrease of contingent assetsapproximately $1.8 million, which was mainly due to a net decrease in accrued expenses and other current liabilities,incomeUse of Estimatesexpenses duringEstimates, see the periods reported. Actual results could materially differ from those estimates. The Company has identified“Critical Accounting Policies and Estimates” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K, filed with the followingU.S. Securities and Exchange Commission. During the six months ended July 3, 2023, there were no material changes in our critical accounting policy. Common stock subject to possible redemptionWe account for common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holderestimates or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2018 and December 31, 2017, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of our balance sheet.Recent accounting standardsManagement does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements. RiskAsRisk.ProceduresProceduresareinclude, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in ourthe reports that we file or submit under the Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officerChief Executive Officer and principal financial officerChief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2018, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on thismanagement’s evaluation, our principal executive officerChief Executive Officer and principal financial and accounting officer haveChief Financial Officer concluded that during the period covered by this report, our disclosure controls and procedures were effective at athe reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.overOver Financial Reportingwashave been no changechanges in ourthe Company’s internal control over financial reporting that occurred during the fiscal quarter of 2018 covered by this Quarterly Report on Form 10-Qended July 3, 2023 that hashave materially affected, or isare reasonably likely to materially affect, ourthe Company’s internal control over financial reporting.5.1. Legal Proceedings from Registered SecuritiesIn October 2017, we issued 2,875,000 sharespurchase pricelist of approximately $0.01 per share, in connectionexhibits filed or furnished with our organization. The foregoing issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”).On March 16, 2018, we consummated the Initial Public Offering of 10,000,000 units. On March 20, 2018, we consummated the sale of an additional 1,500,000 units subject to the underwriters’ over-allotment option. The units sold in the Initial Public Offering, including pursuant to the over-allotment option, were sold at an offering price of $10.00 per unit, generating total gross proceeds of $115,000,000. EarlyBirdCapital, Inc. acted as sole book-running manager of the Initial Public Offering, Chardan Capital Markets, LLC acted as lead manager of the Initial Public Offering and I-Bankers Securities, Inc. acted as co-manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-223106). The Securities and Exchange Commission declared the registration statement effective on March 13, 2018.Simultaneous with the consummation of the Initial Public Offering, we consummated the private placement of an aggregate of 400,000 units (“Private Units”) to our initial stockholders at a price of $10.00 per Private Unit, generating total proceeds of $4,000,000. Simultaneous with the consummation of the underwriters’ over-allotment option, we consummated the private placement of an additional 45,000 Private Units at a price of $10.00 per Private Unit, generating total proceeds of $450,000. These issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.The Private Units are identical to the units sold in the Initial Public Offering, except the warrants included in the Private Units are non-redeemable, may be exercised on a cashless basis, and may be exercisable for unregistered shares of common stock if the prospectus relating to the common stock issuable upon exercise of the warrants is not current and effective, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. The initial purchasers have also agreed (A) to vote any shares of common stock held by them in favor of any proposed business combination, (B) not to convert any such shares of common stock into the right to receive cash from the trust account in connection with a shareholder vote to approve any proposed initial business combination or sell any shares of common stock to us in a tender offer in connection with a proposed initial business combination and (C) that any shares of common stock they own shall not participate in any liquidating distribution from the trust account upon winding up if a business combination is not consummated within the required time period. Additionally, the purchasers have agreed not to transfer, assign or sell any of the Private Units (except to certain permitted transferees) until the completion of an initial business combination.Of the gross proceeds received from the Initial Public Offering and private placement of Private Units, $116,150,000 was placed in a trust account.We paid a total of $2,300,000 in underwriting discounts and commissions and $431,946 for other costs and expenses related to our formation and the Initial Public Offering.For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q. 15Item 6. Exhibits
* Filed herewith.In accordance withOPES ACQUISITION CORP.BurgerFi International, Inc. Date: May 15, 2018By:/s/ José Antonio Cañedo WhiteBy: /s/ Carl Bachmann Name: José Antonio Cañedo WhiteCarl Bachmann Title:Chief Executive Officer (Principal Executive Officer) By: /s/ Christopher Jones Christopher Jones By:/s/ Miguel Angel VillegasName: Miguel Angel VillegasTitle:Chief Financial Officer (Principal (Principal Financial and Accounting Officer)