BAB (BABB) 10-Q 12 Oct 18 2018 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Aug. 31, 2018	Oct. 12, 2018
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	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding (in shares)		7,263,508
Document Type	10-Q
Document Period End Date	Aug. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Small Business	true

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Aug. 31, 2018	Nov. 30, 2017
Current Assets
Cash	$ 948,818	$ 792,655
Restricted cash	571,882	693,425
Receivables
Trade accounts and notes receivable (net of allowance for doubtful accounts of $16,227 in 2018 and $19,438 in 2017 )	75,681	56,342
Marketing fund contributions receivable from franchisees and stores	16,223	12,635
Inventories	3,697	19,761
Prepaid expenses and other current assets	93,891	85,770
Total Current Assets	1,710,192	1,660,588
Property, plant and equipment (net of accumulated depreciation of $154,844 in 2018 and $154,762 in 2017)	1,322	5,515
Trademarks	459,637	459,637
Goodwill	1,493,771	1,493,771
Definite lived intangible assets (net of accumulated amortization of $123,646 in 2018 and $123,398 in 2017)	6,578
Deferred tax asset	248,000	248,000
Total Noncurrent Assets	2,209,308	2,206,923
Total Assets	3,919,500	3,867,511
Current Liabilities
Accounts payable	40,211	43,741
Accrued expenses and other current liabilities	260,098	243,397
Unexpended marketing fund contributions	587,958	706,856
Deferred franchise fee revenue
Deferred licensing revenue	15,476	18,155
Current and Total Liabilities	903,743	1,012,149
Stockholders' Equity
Preferred shares
Common stock -$.001 par value; 15,000,000 shares authorized; 8,466,953 shares issued and 7,263,508 shares outstanding as of August 31, 2018 and November 30, 2017	13,508,257	13,508,257
Additional paid-in capital	987,034	987,034
Treasury stock	(222,781)	(222,781)
Accumulated deficit	(11,256,753)	(11,417,148)
Total Stockholders' Equity	3,015,757	2,855,362
Total Liabilities and Stockholders' Equity	3,919,500	3,867,511
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred shares

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Aug. 31, 2018	Nov. 30, 2017
Trade accounts and notes receivable, allowance for doubtful accounts	$ 16,227	$ 19,438
Property, plant and equipment, accumulated depreciation	154,844	154,762
Definite lived intangible assets, accumulated amortization	$ 123,646	$ 123,398
Preferred shares, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred shares, shares authorized (in shares)	4,000,000	4,000,000
Preferred shares, 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 shares, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred shares, shares authorized (in shares)	1,000,000	1,000,000
Preferred shares, shares outstanding (in shares)	0	0

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
REVENUES
Total Revenues	$ 556,188	$ 563,827	$ 1,617,126	$ 1,664,425
OPERATING EXPENSES
Payroll and payroll-related expenses	228,806	258,601	666,499	767,585
Occupancy	41,017	43,913	123,908	133,708
Advertising and promotion	875	5,997	3,047	17,709
Professional service fees	26,768	29,079	104,287	106,653
Travel	10,847	9,686	28,070	28,562
Employee benefit expense	33,121	42,245	91,147	122,498
Depreciation and amortization	288	617	728	10,995
Other	41,928	41,640	133,569	156,001
Total Operating Expenses	383,650	431,778	1,151,255	1,343,711
Income from operations	172,538	132,049	465,871	320,714
Interest income	17	24	64	87
Income before provision for income taxes	172,555	132,073	465,935	320,801
Provision for income taxes
Current tax			15,000
Net Income	$ 172,555	$ 132,073	$ 450,935	$ 320,801
Earnings per share - Basic and Diluted (in dollars per share)	$ 0.02	$ 0.02	$ 0.06	$ 0.04
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	$ 0.04
Royalty [Member]
REVENUES
Total Revenues	$ 431,786	$ 446,778	$ 1,242,272	$ 1,295,021
Franchise [Member]
REVENUES
Total Revenues	18,000	10,000	19,500	50,000
License [Member]
REVENUES
Total Revenues	$ 106,402	$ 107,049	$ 355,354	$ 319,404

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Aug. 31, 2018	Aug. 31, 2017
Operating activities
Net Income	$ 450,935	$ 320,801
Adjustments to reconcile net income to cash flows (used in)/provided by operating activities:
Depreciation and amortization	728	10,995
Provision for uncollectible accounts, net of recoveries	(3,210)	(5,001)
Proceeds from sale of property and equipment	4,516
Changes in:
Trade accounts receivable and notes receivable	(16,129)	1,494
Restricted cash	121,543	(103,213)
Marketing fund contributions receivable	(3,588)	(593)
Inventories	15,260	(10,810)
Prepaid expenses and other	(8,121)	(17,059)
Accounts payable	(3,530)	(3,718)
Accrued liabilities	16,701	(93,524)
Unexpended marketing fund contributions	(118,898)	104,347
Deferred revenue	(2,679)	(65,179)
Net Cash Provided by Operating Activities	453,528	138,540
Investing activities
Purchase of equipment		(4,915)
Capitalization of trademark renewals	(6,825)	(4,455)
Net Cash Used In Investing Activities	(6,825)	(9,370)
Financing activities
Cash distributions/dividends	(290,540)	(290,541)
Net Cash Used In Financing Activities	(290,540)	(290,541)
Net Increase (Decrease) in Cash	156,163	(161,371)
Cash, Beginning of Period	792,655	907,116
Cash, End of Period	948,818	745,745
Supplemental disclosure of cash flow information:
Interest paid
Income taxes paid	$ 769	$ 18,173

Note 1 - Nature of Operations

Note 1 - Nature of Operations	9 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Nature of Operations [Text Block]	Note 1. 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. August 31, 2018, 79 4 24 not December 2017, 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. Licensed BAB units serve the Company's frozen bagel and related products baked daily. 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, 2017 February 26, 2018. not

Note 2 - Units Open and Under D

Note 2 - Units Open and Under Development	9 Months Ended
	Aug. 31, 2018
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, 2018 Stores open: Franchisee-owned stores 79 Licensed Units 4 83 Unopened stores with Franchise Agreements 2 Total operating units and units with Franchise Agreements 85

Note 3 - Earnings Per Share

Note 3 - Earnings Per Share	9 Months Ended
	Aug. 31, 2018
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, 2018 2017 2018 2017 Numerator: Net income available to common shareholders $ 172,555 $ 136,005 $ 450,935 $ 320,801 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 $ 0.06 $ 0.04

Note 4 - Goodwill and Other Int

Note 4 - Goodwill and Other Intangible Assets	9 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Goodwill and Intangible Assets Disclosure [Text Block]	4. Accounting Standard Codification (“ASC”) 350 no The Company tests goodwill that is not first February 28, 2018, not not August 31, 2018, not

Note 5 - Recent Accounting Pron

Note 5 - Recent Accounting Pronouncements	9 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	5. Revenue from Contracts with Customers, ASU 2014 09 five The standard requires that the transaction price received from customers be allocated to each separate and distinct performance obligation. The transaction price attributable to each separate and distinct performance obligation is then recognized as the performance obligations are satisfied. We have evaluated franchise fees and have determined that under the new standard the franchise fee is not 10 We have evaluated the impact of our franchise contributions to and subsequent expenditures from our marketing fund. We act as an agent in regard to these franchisee contributions and expenditures and as such we do not not 2014 09 November 30, 2019. On February 25, 2016, No. 2016 02, December 15, 2018. October 1, 2018. No. 2016 02 $500,000 October 1, 2018. 4% In March 2016, 2016 04, 405 20 not December 15, 2017, not Management does not not August 31, 2018

Note 6 - Stockholder's Equity

Note 6 - Stockholder's Equity	9 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	6 . Stockholder’s Equity The Board of Directors declared a cash distribution/dividend on March 15 June 7 September 7, 2017 $0.01 April 20, July 13, October 13, 2017, December 5, 2017 $0.01 $0.01 January 12, 2018 $0.01 March 7, 2018 June 4, 2018 April 13, 2018 July 6, 2018 On September 4, 2018 $0.01 September 18, 2018 October 2, 2018 On May 6, 2013 one one one 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

Note 7 - Subsequent Event

Note 7 - Subsequent Event	9 Months Ended
	Aug. 31, 2018
Notes to Financial Statements
Subsequent Events [Text Block]	7. On June 13, 2018 sixty-six 66 October 1, 2018 March 31, 2024. 7,144 5,298

Note 2 - Units Open and Under_2

Note 2 - Units Open and Under Development (Tables)	9 Months Ended
	Aug. 31, 2018
Notes Tables
Schedule of Franchisor Disclosure [Table Text Block]	Stores open: Franchisee-owned stores 79 Licensed Units 4 83 Unopened stores with Franchise Agreements 2 Total operating units and units with Franchise Agreements 85

Note 3 - Earnings Per Share (Ta

Note 3 - Earnings Per Share (Tables)	9 Months Ended
	Aug. 31, 2018
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, 2018 2017 2018 2017 Numerator: Net income available to common shareholders $ 172,555 $ 136,005 $ 450,935 $ 320,801 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 $ 0.06 $ 0.04

Note 1 - Nature of Operations (

Note 1 - Nature of Operations (Details Textual)	Aug. 31, 2018
Number of Wholly Owned Subsidiaries	3

Note 2 - Units Open and Under_3

Note 2 - Units Open and Under Development - Operating Units (Details)	Aug. 31, 2018
Number of stores	85
Franchised Units [Member]
Number of stores	79
Licensed Units [Member]
Number of stores	4
Total Franchised Owned and Licensed Units [Member]
Number of stores	83
Unopened Store [Member]
Number of stores	2

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, 2018	Aug. 31, 2017	Aug. 31, 2018	Aug. 31, 2017
Net income available to common shareholders	$ 172,555	$ 136,005	$ 450,935	$ 320,801
Basic and diluted (in shares)	7,263,508	7,263,508	7,263,508	7,263,508
Earnings per share - Basic and Diluted (in dollars per share)	$ 0.02	$ 0.02	$ 0.06	$ 0.04

Note 5 - Recent Accounting Pr_2

Note 5 - Recent Accounting Pronouncements (Details Textual) - USD ($)	Oct. 01, 2018	Aug. 31, 2018
Lessee, Operating Lease, Discount Rate		4.00%
Accounting Standards Update 2016-02 [Member] | Subsequent Event [Member]
Operating Lease, Right-of-Use Asset	$ 500,000
Operating Lease, Liability, Total	$ 500,000

Note 6 - Stockholder's Equity (

Note 6 - Stockholder's Equity (Details Textual) - $ / shares

Sep. 04, 2018

Jul. 06, 2018

Jun. 04, 2018

Apr. 13, 2018

Mar. 07, 2018

Jan. 12, 2018

Dec. 05, 2017

Oct. 13, 2017

Sep. 07, 2017

Jul. 13, 2017

Jun. 07, 2017

May 22, 2017

Apr. 20, 2017

Mar. 15, 2017

Aug. 18, 2015

May 13, 2013

May 06, 2013

Aug. 31, 2018

Aug. 31, 2017

Aug. 31, 2018

Aug. 31, 2017

Common Stock, Dividends, Per Share, Declared

$ 0.01

$ 0.01

$ 0.04

$ 0.04

Preferred Stock Dividends Number of Rights Declared

1

Preferred Stock Dividends Number of Rights Issued

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%

Right to Purchase Series A Preferred Stock [Member]

Class of Warrant or Right, Number of Securities Called by Each Warrant or Right

0.001

Class of Warrant or Right, Exercise Price of Warrants or Rights

$ 0.90

Class of Warrant or Right, Term

7 years

5 years

3 years

Quarterly Dividend [Member]

Common Stock, Dividends, Per Share, Declared

$ 0.01

$ 0.01

$ 0.01

$ 0.01

$ 0.01

$ 0.01

Common Stock, Dividends, Per Share, Cash Paid

$ 0.01

$ 0.01

$ 0.01

0.01

$ 0.01

$ 0.01

$ 0.01

Dividends Payable, Date Declared

Jun. 4, 2018

Mar. 7, 2018

Dec. 5, 2017

Sep. 7, 2017

Jun. 7, 2017

Mar. 15, 2017

Dividends Payable, Date to be Paid

Jul. 6, 2018

Apr. 13, 2018

Quarterly Dividend [Member] | Subsequent Event [Member]

Dividends Payable, Date Declared

Sep. 4, 2018

Dividends Payable, Date to be Paid

Oct. 2, 2018

Dividends Payable, Date of Record

Sep. 18, 2018

Special Cash Distribution [Member]

Common Stock, Dividends, Per Share, Declared

$ 0.01

Dividends Payable, Date Declared

Jan. 12, 2018

Note 7 - Subsequent Event (Deta

Note 7 - Subsequent Event (Details Textual) - Lease Between BAB Systems, Inc. and TR Deerfield Office LLC [Member] - ft²	Oct. 01, 2018	Jun. 13, 2018
Lessee, Operating Lease, Term of Contract		5 years 180 days
Area of Real Estate Property		7,144
Scenario, Forecast [Member]
Area of Real Estate Property	5,298