BAB (BABB) 10-Q 13 Oct 17 2017 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Aug. 31, 2017	Oct. 13, 2017
Document Information [Line Items]
Entity Registrant Name	BAB, INC.
Entity Central Index Key	1,123,596
Trading Symbol	babb
Current Fiscal Year End Date	--11-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		7,263,508
Document Type	10-Q
Document Period End Date	Aug. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Aug. 31, 2017	Nov. 30, 2016
Current Assets
Cash	$ 745,745	$ 907,116
Restricted cash	702,100	598,887
Receivables
Trade accounts and notes receivable (net of allowance for doubtful accounts of $20,317 in 2017 and $25,319 in 2016 )	54,351	50,844
Marketing fund contributions receivable from franchisees and stores	10,831	10,238
Inventories	26,940	16,130
Prepaid expenses and other current assets	98,080	81,021
Total Current Assets	1,638,047	1,664,236
Property, plant and equipment (net of accumulated depreciation of $154,221 in 2017 and $152,334 in 2016)	4,254	1,226
Trademarks	459,637	455,182
Goodwill	1,493,771	1,493,771
Definite lived intangible assets (net of accumulated amortization of $123,398 in 2017 and $114,290 in 2016)		9,108
Deferred tax asset	248,000	248,000
Total Noncurrent Assets	2,205,662	2,207,287
Total Assets	3,843,709	3,871,523
Current Liabilities
Accounts payable	39,665	43,383
Accrued expenses and other current liabilities	271,645	365,169
Unexpended marketing fund contributions	713,727	609,380
Deferred franchise fee revenue		40,000
Deferred licensing revenue	24,047	49,226
Current and Total Liabilities	1,049,084	1,107,158
Stockholders' Equity
Preferred stock
Common stock -$.001 par value; 15,000,000 shares authorized; 8,466,953 shares issued and 7,263,508 shares outstanding as of August 31, 2017 and November 30, 2016	13,508,257	13,508,257
Additional paid-in capital	987,034	987,034
Treasury stock	(222,781)	(222,781)
Accumulated deficit	(11,477,885)	(11,508,145)
Total Stockholders' Equity	2,794,625	2,764,365
Total Liabilities and Stockholders' Equity	3,843,709	3,871,523
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock

Consolidated Balance Sheets (C3

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Aug. 31, 2017	Nov. 30, 2016
Trade accounts and notes receivable, allowance for doubtful accounts	$ 20,317	$ 25,319
Property, plant and equipment, accumulated depreciation	154,221	152,334
Definite lived intangible assets, accumulated amortization	$ 123,398	$ 114,290
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	15,000,000	15,000,000
Common stock, shares issued (in shares)	8,466,953	8,466,953
Common stock, shares outstanding (in shares)	7,263,508	7,263,508
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares outstanding (in shares)	0	0

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
REVENUES
Royalty fees from franchised stores	$ 446,778	$ 441,949	$ 1,295,021	$ 1,298,562
Franchise fees	10,000	60,000	50,000	78,000
Licensing fees and other income	107,049	114,181	319,404	384,885
Total Revenues	563,827	616,130	1,664,425	1,761,447
OPERATING EXPENSES
Payroll and payroll-related expenses	258,601	248,233	767,585	768,300
Occupancy	43,913	43,599	133,708	131,337
Advertising and promotion	5,997	10,485	17,709	32,077
Professional service fees	29,079	36,844	106,653	108,376
Travel	9,686	9,196	28,562	26,532
Employee benefit expense	42,245	38,869	122,498	116,224
Depreciation and amortization	617	5,167	10,995	15,183
Other	41,640	58,186	156,001	176,629
Total Operating Expenses	431,778	450,579	1,343,711	1,374,658
Income from operations	132,049	165,551	320,714	386,789
Interest income	24	90	87	423
Interest expense		(396)		(1,190)
Income before provision for income taxes	132,073	165,245	320,801	386,022
Provision for income taxes
Current tax
Net Income	$ 132,073	$ 165,245	$ 320,801	$ 386,022
Net Income per Share - Basic and Diluted (in dollars per share)	$ 0.02	$ 0.02	$ 0.04	$ 0.05
Weighted average shares outstanding - Basic and Diluted (in shares)	7,263,508	7,263,508	7,263,508	7,263,508
Cash distributions declared per share (in dollars per share)	$ 0.01	$ 0.01	$ 0.04	$ 0.05

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Operating activities
Net income	$ 320,801	$ 386,022
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	10,995	15,183
Provision for uncollectible accounts, net of recoveries	(5,001)	(3,954)
Changes in:
Trade accounts receivable and notes receivable	1,494	15,574
Restricted cash	(103,213)	(181,876)
Marketing fund contributions receivable	(593)	12,319
Inventories	(10,810)	3,544
Prepaid expenses and other	(17,059)	(7,385)
Accounts payable	(3,718)	654
Accrued liabilities	(93,524)	(13,416)
Unexpended marketing fund contributions	104,347	169,557
Deferred revenue	(65,179)	(48,631)
Net Cash Provided by Operating Activities	138,540	347,591
Investing activities
Capitalization of trademark renewals	(4,455)	(4,022)
Purchase of Equipment	(4,915)
Net Cash Used In Investing Activities	(9,370)	(4,022)
Financing activities
Cash distributions/dividends	(290,541)	(363,175)
Net Cash Used In Financing Activities	(290,541)	(363,175)
Net Decrease in Cash	(161,371)	(19,606)
Cash, Beginning of Period	907,116	837,382
Cash, End of Period	745,745	817,776
Supplemental disclosure of cash flow information:
Interest paid
Income taxes paid	$ 18,173	$ 8,171

Note 1 - Nature of Operations

Note 1 - Nature of Operations	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Nature of Operations [Text Block]	Note 1 . N ature of Operations BAB , Inc. (“the Company”) has three December 2, 1992, 1997 1996 August 30, 1995, none. February 1, 1999, September 9, 2009 no The Company was incorporated under the laws of the State of Delaware on July 12, 2000. The Company currently franchises and licenses bagel and muffin retail units under the BAB and MFM and SD trade names. At August 31, 2017, 83 3 24 not The BAB franchised brand consists of units operating as “Big Apple Bagels,” featuring daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches and other related products. BAB units are primarily concentrated in the Midwest and Western United States. The MFM brand consists of units operating as "My Favorite Muffin," featuring a large variety of freshly baked muffins, coffees and related products, and units operating as "My Favorite Muffin and Bagel Cafe®," featuring these products as well as a variety of specialty bagel sandwiches and related products. The SweetDuet Frozen Yogurt & Gourmet Muffins® brand is a fusion concept, pairing self-serve frozen yogurt with MFM’s exclusive line of My Favorite Muffin gourmet muffins. SD frozen yogurt can be added as an additional brand in a BAB or MFM location. Although the Company doesn't actively market Brewster's stand-alone franchises, Brewster's coffee products are sold in most franchised units. The Company is leveraging on the natural synergy of distributing muffin products in existing BAB units and, alternatively, bagel products and Brewster's Coffee in existing MFM units. The Company expects to continue to realize efficiencies in servicing the combined base of BAB and MFM franchisees. The accompanying condensed consolidated financial statements are unaudited. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations; nevertheless, the Company believes that the disclosures are adequate to make the information presented not 10 November 30, 2016 February 23, 2017. not

Note 2 - Units Open and Under D

Note 2 - Units Open and Under Development	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Units Open and Under Development [Text Block]	2. Units Open and Under Development Units which are open or under development at August 31, 2017 Stores open: Franchisee-owned stores 83 Licensed Units 3 86 Unopened stores with Franchise Agreements 2 Total operating units and units 88

Note 3 - Earnings Per Share

Note 3 - Earnings Per Share	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Earnings Per Share [Text Block]	3. The following table sets forth the computation of basic and diluted earnings per share: For the three months ended August 31, For the nine months ended August 31, 2017 2016 2017 2016 Numerator: Net income available to common shareholders $ 132,073 $ 165,245 $ 320,801 $ 386,022 Denominator: Weighted average outstanding shares Basic and diluted 7,263,508 7,263,508 7,263,508 7,263,508 Earnings per Share - Basic and Diluted $ 0.02 $ 0.02 $ 0.04 $ 0.05 There were no three nine August 31, 2017. three nine August 31, 2016, 175,000

Note 4 - Stock Options

Note 4 - Stock Options	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	4 . Stock Options In May 2001, 1,400,000 November 23, 2016 no August 31, 2017. August 31, 2016, 1,225,000 November 30, 2016. For the nine months ended: August 31, 2017 August 31, 2016 Options outstanding at beginning of year - 237,500 Granted - - Forfeited or expired - (62,500 ) Exercised - - Outstanding at end of period - 175,000

Note 5 - Goodwill and Other Int

Note 5 - Goodwill and Other Intangible Assets	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Goodwill and Intangible Assets Disclosure [Text Block]	5. Accounting Standard Codification (“ASC”) 350 no 2017 04 – Goodwill and Other” (Topic 350 first February 28, 2017. The Company tests goodwill that is not The Company has consistently conducted its annual test during the first During the quarter, management qualitatively assessed goodwill to determine whether testing is necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition and carrying amounts of net assets. If this qualitative assessment indicates that it is more likely than not not February 28, 2017, not no August 31, 2017 The impairment test performed November 30, 2016 ’s business plan projection for expected future cash flows. Based on the computation it was determined that no no three 2017 In January 2017, 2017 04, 350 2 ’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendments in this ASU are effective for the annual reporting periods beginning after December 15, 2019, February 28, 2017.

Note 6 - Recent and Adopted Acc

Note 6 - Recent and Adopted Accounting Pronouncements	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	6. Revenue from Contracts with Customers, ASU 2014 09 ’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. The standard requires five December 15, 2017. 2014 09 November 30, 2019 On February 25, 2016, No. 2016 02, December 15, 2018. 2016 02 November 30, 2019 ’s financial position, cash flows or results of operations. In March 2016, 2016 04, Liabilities – Extinguishments of Liabilities (Subtopic 405 20 not December 15, 2017, In November 2015, No. 2015 17, 740 2015 17” 2015 17 December 15, 2016. may 2015 17 November 30, 2018, is change is not Management does not not ’s financial position, cash flows or results of operations.

Note 7 - Stockholder's Equity

Note 7 - Stockholder's Equity	9 Months Ended
	Aug. 31, 2017
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	7. ’s Equity The Board of Directors declared a cash distribution/dividend on March 3, June 6 September 6, 2016 $0.01 April 13, July 11, October 12, 2016, December 5, 2016, $0.01 $0.01 Jan uary 9, 2017. March 15, June 7, 2017, $0.01 April 20, July 13, 2017, On September 7, 2017, $0.01 September 25, 2017, October 13, 2017. On May 6, 2013 one one one and its stockholders from efforts to obtain control of BAB, Inc. that the Board of Directors determines are not one May 13, 2013. not 15% 20% one one $0.90 one three On June 18, 2014 August 18, 2015 fifth May 22, 2017 seventh All other original rights and provisions remain the same.

Note 2 - Units Open and Under13

Note 2 - Units Open and Under Development (Tables)	9 Months Ended
	Aug. 31, 2017
Notes Tables
Schedule of Franchisor Disclosure [Table Text Block]	Stores open: Franchisee-owned stores 83 Licensed Units 3 86 Unopened stores with Franchise Agreements 2 Total operating units and units 88

Note 3 - Earnings Per Share (Ta

Note 3 - Earnings Per Share (Tables)	9 Months Ended
	Aug. 31, 2017
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	For the three months ended August 31, For the nine months ended August 31, 2017 2016 2017 2016 Numerator: Net income available to common shareholders $ 132,073 $ 165,245 $ 320,801 $ 386,022 Denominator: Weighted average outstanding shares Basic and diluted 7,263,508 7,263,508 7,263,508 7,263,508 Earnings per Share - Basic and Diluted $ 0.02 $ 0.02 $ 0.04 $ 0.05

Note 4 - Stock Options (Tables)

Note 4 - Stock Options (Tables)	9 Months Ended
	Aug. 31, 2017
Notes Tables
Share-based Compensation, Stock Options, Activity [Table Text Block]	For the nine months ended: August 31, 2017 August 31, 2016 Options outstanding at beginning of year - 237,500 Granted - - Forfeited or expired - (62,500 ) Exercised - - Outstanding at end of period - 175,000

Note 1 - Nature of Operations (

Note 1 - Nature of Operations (Details Textual)	Aug. 31, 2017
Number of Wholly Owned Subsidiaries	3
Number of Stores	88
Number of States in which Entity Operates	24
Franchised Units [Member]
Number of Stores	83
Licensed Units [Member]
Number of Stores	3

Note 2 - Units Open and Under17

Note 2 - Units Open and Under Development - Operating Units (Details)	Aug. 31, 2017
Number of stores	88
Franchised Units [Member]
Number of stores	83
Licensed Units [Member]
Number of stores	3
Total Franchised Owned and Licensed Units [Member]
Number of stores	86
Unopened Store [Member]
Number of stores	2

Note 3 - Earnings Per Share (De

Note 3 - Earnings Per Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	175,000	0	175,000

Note 3 - Earnings Per Share - C

Note 3 - Earnings Per Share - Computation of Earnings Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Net income available to common shareholders	$ 132,073	$ 165,245	$ 320,801	$ 386,022
Weighted average shares outstanding - Basic and Diluted (in shares)	7,263,508	7,263,508	7,263,508	7,263,508
Net Income per Share - Basic and Diluted (in dollars per share)	$ 0.02	$ 0.02	$ 0.04	$ 0.05

Note 4 - Stock Options (Details

Note 4 - Stock Options (Details Textual) - shares	Aug. 31, 2017	Nov. 30, 2016	Aug. 31, 2016	Nov. 30, 2015	May 31, 2001
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					1,400,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	0	0	175,000	237,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises and Forfeitures in Period			1,225,000

Note 4 - Stock Options - Stock

Note 4 - Stock Options - Stock Option Activity (Details) - shares	9 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Options outstanding at beginning of year (in shares)	0	237,500
Granted (in shares)
Forfeited or expired (in shares)		(62,500)
Exercised (in shares)
Outstanding at end of period (in shares)	0	175,000

Note 5 - Goodwill and Other I22

Note 5 - Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Feb. 28, 2017	Aug. 31, 2017
Goodwill, Impairment Loss	$ 0	$ 0

Note 7 - Stockholder's Equity (

Note 7 - Stockholder's Equity (Details Textual) - $ / shares

Sep. 07, 2017

Jul. 13, 2017

Jun. 07, 2017

Apr. 20, 2017

Mar. 15, 2017

Jan. 09, 2017

Dec. 05, 2016

Oct. 12, 2016

Sep. 06, 2016

Jul. 11, 2016

Jun. 06, 2016

Apr. 13, 2016

Mar. 03, 2016

May 13, 2013

May 06, 2013

Aug. 31, 2017

Aug. 31, 2016

Aug. 31, 2017

Aug. 31, 2016

Common Stock, Dividends, Per Share, Cash Paid

$ 0.01

$ 0.01

$ 0.01

Common Stock, Dividends, Per Share, Declared

$ 0.01

$ 0.01

$ 0.01

$ 0.01

$ 0.01

$ 0.04

$ 0.05

Preferred Stock Dividends Number of Rights Declared

1

Preferred Stock Dividends Number of Rights Minimum Percent of Common Stock that must be Acquired to Make Rights Exercisable

15.00%

Preferred Stock Dividends Number of Rights Minimum Percent of Common Stock that Must be Acquired to Make Rights Exercisable Institutional Investors

20.00%

Preferred Stock Dividends Rights Exercise Price

$ 0.90

Preferred Stock Dividends Rights Expiration Term

3 years

Quarterly Dividend [Member]

Common Stock, Dividends, Per Share, Cash Paid

$ 0.01

$ 0.01

$ 0.01

Common Stock, Dividends, Per Share, Declared

$ 0.01

$ 0.01

$ 0.01

Quarterly Dividend [Member] | Subsequent Event [Member]

Common Stock, Dividends, Per Share, Declared

$ 0.01

Special Cash Distribution [Member]

Common Stock, Dividends, Per Share, Cash Paid

$ 0.01

Common Stock, Dividends, Per Share, Declared

$ 0.01