Cover
Cover - shares | 6 Months Ended | |
Jul. 03, 2023 | Aug. 11, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 03, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38417 | |
Entity Registrant Name | BurgerFi International, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-2418815 | |
Entity Address, Address Line One | 200 West Cypress Creek Rd., | |
Entity Address, Address Line Two | Suite 220 | |
Entity Address, City or Town | Fort Lauderdale | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33309 | |
City Area Code | 954 | |
Local Phone Number | 618-2000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,800,100 | |
Entity Central Index Key | 0001723580 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-01 | |
Common Stock, par value $0.0001 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | BFI | |
Security Exchange Name | NASDAQ | |
Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share | |
Trading Symbol | BFIIW | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 03, 2023 | Jan. 02, 2023 |
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 |
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 | ||
Common stock, shares issued (in shares) | 26,724,218 | 22,257,772 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
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 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jul. 03, 2023 | Jan. 02, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 2,120,000 | 2,120,000 |
Preferred stock, shares outstanding (in shares) | 2,120,000 | 2,120,000 |
Preferred stock, redemption value | $ 53 | $ 53 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 26,724,218 | 22,257,772 |
Common stock, shares outstanding (in shares) | 26,724,218 | 22,257,772 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Revenue | ||||
Restaurant sales | $ 40,808 | $ 42,236 | $ 84,124 | $ 84,592 |
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 | 0 | 55,168 | 0 | 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) | (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 (in shares) | 24,891,449 | 22,214,628 | 24,216,199 | 22,089,799 |
Diluted (in shares) | 24,891,449 | 22,214,628 | 24,216,199 | 22,089,799 |
Net loss per common share: | ||||
Basic (in USD per share) | $ (0.24) | $ (2.72) | $ (0.63) | $ (3.35) |
Diluted (in USD per share) | $ (0.24) | $ (2.72) | $ (0.63) | $ (3.35) |
Accumulated Deficit | ||||
Restaurant level operating expenses: | ||||
Other loss | $ (5) | |||
Net loss | $ (60,377) | (15,153) | $ (73,937) | |
Royalty and other fees | ||||
Revenue | ||||
Revenues | $ 2,190 | 2,611 | 4,160 | 4,714 |
Royalty - brand development and co-op | ||||
Revenue | ||||
Revenues | $ 429 | $ 451 | $ 870 | $ 922 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 21,303,500 | ||||
Balance at beginning of period at Dec. 31, 2021 | $ 173,275 | $ 2 | $ 296,992 | $ (123,719) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 4,475 | 4,475 | |||
Vested shares issued (in shares) | 965,676 | ||||
Vested shares issued | 3,810 | 3,810 | |||
Stock issued in acquisition of Anthony's (in shares) | [1] | 123,131 | |||
Shares withheld for taxes (in shares) | (139,075) | ||||
Shares withheld for taxes | (1,086) | ||||
Net loss | (73,937) | (73,937) | |||
Balance at end of period (in shares) at Jun. 30, 2022 | 22,253,232 | ||||
Balance at end of period at Jun. 30, 2022 | 106,537 | $ 2 | 304,191 | (197,656) | |
Balance at beginning of period (in shares) at Mar. 31, 2022 | 22,042,583 | ||||
Balance at beginning of period at Mar. 31, 2022 | 166,106 | $ 2 | 303,383 | (137,279) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 909 | 909 | |||
Vested shares issued (in shares) | 238,514 | ||||
Shares withheld for taxes (in shares) | (27,865) | ||||
Shares withheld for taxes | (101) | (101) | |||
Net loss | (60,377) | (60,377) | |||
Balance at end of period (in shares) at Jun. 30, 2022 | 22,253,232 | ||||
Balance at end of period at Jun. 30, 2022 | 106,537 | $ 2 | 304,191 | (197,656) | |
Balance at beginning of period at Jan. 02, 2023 | 78,947 | $ 2 | 306,096 | (227,151) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | $ 5,230 | 5,230 | |||
Shares issued in private placement (in shares) | 2,868,853 | ||||
Shares issued in private placement | $ 3,436 | 3,436 | |||
Vested shares issued (in shares) | 1,681,057 | ||||
Shares issued in legal settlement (in shares) | 200,000 | ||||
Shares issued in legal settlement | 352 | 352 | |||
Shares withheld for taxes (in shares) | (283,464) | ||||
Shares withheld for taxes | (365) | (365) | |||
Net loss | (15,153) | (15,153) | |||
Balance at end of period (in shares) at Jul. 03, 2023 | 26,724,218 | ||||
Balance at end of period at Jul. 03, 2023 | 72,448 | $ 2 | 314,749 | (242,303) | |
Balance at beginning of period (in shares) at Apr. 03, 2023 | 23,823,105 | ||||
Balance at beginning of period at Apr. 03, 2023 | 74,468 | $ 2 | 310,768 | (236,302) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation | 556 | 556 | |||
Shares issued in private placement (in shares) | 2,868,853 | ||||
Shares issued in private placement | 3,436 | 3,436 | |||
Vested shares issued (in shares) | 41,883 | ||||
Shares withheld for taxes (in shares) | (9,623) | ||||
Shares withheld for taxes | (11) | (11) | |||
Net loss | (6,001) | ||||
Balance at end of period (in shares) at Jul. 03, 2023 | 26,724,218 | ||||
Balance at end of period at Jul. 03, 2023 | $ 72,448 | $ 2 | $ 314,749 | $ (242,303) | |
[1]*Timing of share issuance differs from recognition of related financial statement dollar amounts. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2023 | Jun. 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 | 0 | 55,168 |
Depreciation and amortization expense | 6,522 | 9,174 |
Share-based compensation | 5,230 | 8,285 |
Loss on legal settlement | 131 | 0 |
Forfeited franchise deposits | (374) | (433) |
Non-cash lease cost | (36) | 112 |
Loss during the period | 391 | (1,324) |
(Gain) loss on disposal of property and equipment | (10) | 385 |
Deferred income taxes | 0 | (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 | 0 |
Payments on borrowings | (5,662) | (1,667) |
Proceeds from related party note payable | 5,100 | 0 |
Tax payments for restricted stock upon vesting | (368) | (1,086) |
Debt issuance costs | 0 | (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) | 0 |
Fair value of common stock issued in legal settlement | (352) | 0 |
ROU assets obtained in the exchange for lease liabilities: | ||
Operating leases | $ 4,677 | $ 0 |
Organization
Organization | 6 Months Ended |
Jul. 03, 2023 | |
Accounting Policies [Abstract] | |
Organization | Organization BurgerFi International, Inc. and its wholly owned subsidiaries ( “BurgerFi,” or the “Company,” also “we,” “us,” and “our” ), is a multi-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. As of July 3, 2023, the Company had 174 franchised and corporate-owned restaurants of the two following brands: BurgerFi . BurgerFi is a 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. Anthony’s . Anthony’s is a pizza and wing brand that operated 60 corporate-owned casual restaurant locations, as of July 3, 2023. The concept is centered around a coal-fired oven, and its menu offers “well-done” pizza, coal-fired chicken wings, homemade meatballs, and a variety of handcrafted sandwiches and salads. Corporate-owned stores and Franchised stores Store activity for the six months ended July 3, 2023 and the year ended January 2, 2023 is as follows: 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 Store totals included two international stores at July 3, 2023 and one international store at January 2, 2023. Subsequent to July 3, 2023, the Company closed one Burgerfi and one Anthony’s store. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 03, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue 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 continue 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 the Company’s Annual Report on Form 10-K for the year ended January 2, 2023 (the “ 2022 Form 10-K ”), for further information. The Company’s credit agreement (“ Credit Agreement ”) with a syndicate 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. As discussed in Note 8 “ Commitments and Contingencies ” to the consolidated financial statements included within this report, in the case of Second 82 nd SM, LLC v. BF NY 82, LLC et al. , the Court entered an order granting the Landlord’s Motion for Summary Judgment and ordered a damages hearing on the motion. As a result, unless the parties otherwise agree to a settlement prior to the damages hearing, the Company expects a judgment to be entered against it of at least approximately $1.2 million. The parties, however, continue to discuss possible settlement prior to the damages 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 alternatives, including the need to refinance or restructure its debt, sell assets, or seek to raise additional capital, including debt or equity. If the Company is unable to implement one or more of these options or is otherwise unsuccessful in negotiating a settlement, which the Company believes is unlikely, and the court entered a final judgment against the Company, management believes it is possible that the Company will not be in compliance with certain of the financial covenants in its Credit Agreement, which would constitute a breach of the Credit Agreement and an event of default if not cured in accordance with its terms. Any such default would allow the lenders to call the debt sooner than its maturity date of September 30, 2025. In the event that the lenders do call the debt during the next 12 months as the result of a covenant breach, the Company is not 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. The Company has been and continues to be in communication with the Landlord to negotiate a settlement prior to the damages 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 such negotiations or actions. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that results from the uncertainty described above. The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States ( “U.S. GAAP” ) for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated balance sheet as of January 3, 2023 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended January 2, 2023 contained in the 2022 Form 10-K. We are required to evaluate 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 events 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 statements. On July 28, 2022, our Board of Directors approved the change to a 52-53-week fiscal year ending on the Monday nearest to December 31 of each year in order to improve the alignment of financial and business processes following the acquisition of Anthony’s. Our second fiscal quarter of 2023 ended on July 3, 2023. Our current fiscal year will end on January 1, 2024. As of June 30, 2022, the BurgerFi brand operated on a calendar year-end and the Anthony’s brand operated on a 52-53-week fiscal year. Differences arising from the different fiscal period-ends were not deemed material for the quarter ended June 30, 2022. Principles of Consolidation The consolidated 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. Reclassifications Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. New Accounting Pronouncements The Company reviewed all recently issued accounting pronouncements and concluded that they were not applicable or not expected to have a significant impact on the accompanying consolidated financial statements. Employer Retention Tax Credits As of July 3, 2023 and January 2, 2023, the Company had $0.1 million and $1.5 million, respectively, of receivables related to the Taxpayer Certainty and Disaster Relief Act of 2020 included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Prepaid expenses The Company routinely issues prepayments to landlords, insurers and vendors in the ordinary course of business. As of July 3, 2023 and January 2, 2023, the Company had $1.3 million and $0.9 million, respectively of prepayments included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Assets Held for Sale The Company has classified assets held for sale in the accompanying consolidated balance sheets $1.5 million as of July 3, 2023 and $0.7 million as of January 2, 2023 of certain store property and equipment, and intangible assets that the Company expects to be sold within one year. Assets held for sale are reviewed each reporting period to ensure that the fair value less cost to sell exceeds the carrying value. In February 2020, the Company entered into an asset purchase agreement with an unrelated third party for the sale of substantially 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 additional negotiation that has been on-going. In the event the transaction is terminated, the Company will 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 been classified as held for sale in the accompanying consolidated balance sheets as of July 3, 2023 and January 2, 2023. In March 2023, the Company approved a plan for sale of an intangible asset of an Anthony’s location with 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. Other Current Liabilities The Company incurs liabilities associated with the sale of gift cards and gift certificates. As of July 3, 2023 and January 2, 2023, the Company had $1.0 million and $1.8 million, respectively of gift card and gift certificate liabilities included in other current liabilities on the accompanying consolidated balance sheets. The Company incurs liabilities resulting from its customer loyalty program. As of July 3, 2023 and January 2, 2023, the Company had $0.9 million and $0.8 million, respectively of liabilities for loyalty program in the accompanying consolidated balance sheets. Restructuring Costs Restructuring costs include management and employee separation, severance, and relocation costs, as well as store closure related charges. All costs are expensed as incurred, and are reflected as “Restructuring costs and other charges, net” in the accompanying consolidated statements of operations. Restructuring costs and other charges, net for the quarter and six months ended July 3, 2023 was $1.1 million and $2.2 million, respectively. For the quarter and six months ended July 3, 2023, $1.1 million, respectively, related to severance for the departure of Chief Executive Officer and Chief Financial Officer. During the six months ended July 3, 2023, $1.1 million was recorded primarily in connection with the Company’s Credit Facility requirements to raise additional capital or debt. Restructuring costs and other charges, net for the quarter and six months ended June 30, 2022 of $0.1 million and $1.0 million, respectively, related to store pre-opening costs and store closure costs. |
Property & Equipment
Property & Equipment | 6 Months Ended |
Jul. 03, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property & Equipment | Property & Equipment Property and equipment consisted of (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 Depreciation and amortization expense on property and equipment totaled $1.2 million and $2.3 million for the quarter and six months ended July 3, 2023. Depreciation and amortization expense on property and equipment totaled $2.6 million and $4.9 million for the quarter and and six months ended June 30, 2022. Depreciation and amortization expense decreased due to assets fully depreciating and impairments taken during 2022. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jul. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net The following is a summary of the components 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 |
Contract Liabilities
Contract Liabilities | 6 Months Ended |
Jul. 03, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Contract Liabilities | Contract Liabilities A roll forward of contract liabilities included of which the current portion is included in other current liabilities and other noncurrent liabilities on our consolidated balance sheet is as follows: Six 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 Franchise Revenue Revenue recognized during the periods included in royalty 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 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jul. 03, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Net Loss per common share is computed by dividing Net Loss by the weighted average number of common shares outstanding for the period. The Company has considered the effect of (1) warrants outstanding to purchase 15,063,800 shares of common stock and (2) 75,000 shares of common stock and warrants to purchase 75,000 shares of common stock in the unit purchase option, (3) 1,724,639 shares of restricted stock units outstanding in the calculation of income per share, and (4) the impact of any dividends associated with our redeemable preferred stock. As the effect of these on the computation of net loss per common share would have been anti-dilutive, they were excluded from the weighted average number of common shares outstanding. Basic and diluted net loss per common share is calculated as follows: (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) |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jul. 03, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company is affiliated with various entities through common control and ownership. On January 23, 2023, the Company settled a claim filed by a significant stockholder. The settlement resulted in the transfer of five BurgerFi entities from the stockholder to the Company of which two were operating stores and three were entities that historically had operated stores but have since closed. The fair value of consideration paid in the settlement was $0.9 million and included $0.5 million in cash and the issuance of 200,000 shares in common stock valued at $0.4 million. The fair value of net liabilities assumed in the transaction was $0.1 million which included lease liabilities and operating assets and liabilities including property and equipment of two operating stores, net of pre-existing liabilities accrued. The accompanying consolidated balance sheets as of January 2, 2023 reflect amounts related to periodic advances between the Company and these entities for working capital and other needs as due from related companies or due to related companies, as appropriate. There were no amounts due from related companies as of July 3, 2023 as a result of the settlement with the significant stockholder. There was approximately $0.3 million due from related parties included in other assets in the accompanying consolidated balance sheets as of January 2, 2023. During 2022, the Company received royalty revenue from the two operating stores that were transferred on January 23, 2023 as a result of the settlement with the significant stockholder of $0.1 million for the quarter and six months ended June 30, 2022. The Company leased building space for its former corporate office from an entity under common ownership with a significant stockholder. This lease had a 36-month term, effective January 1, 2020. In January 2022, the Company exercised its right to terminate this lease effective as of July 2022. For the quarter and six months ended June 30, 2022, rent expense related to this lease was approximately $0.1 million. Pursuant to a lease amendment entered into in February 2022, the Company leases building space for its corporate office from an entity controlled by the Company's Executive Chairman of the Board. This lease has a 10-year term with an option to renew. For the quarter and six months ended July 3, 2023, and June 30, 2022, rent expense was approximately $0.1 million and $0.2 million, respectively. The Company has an independent contractor agreement with a corporation (the “Consultant” ) for which the Chief Operating Officer (the “Consultant Principal” ) of Lionheart Capital, LLC, an entity controlled by the Company’s Executive Chairman of the Board, serves as President. Pursuant to the terms of the agreements, the Consultant shall provide certain strategic advisory services to the Company in exchange for total annual cash compensation and expense reimbursements of $0.1 million, payable monthly. On January 3, 2023, the Company awarded the Consultant Principal an $0.1 million bonus in connection with the Company’s amendment and extension of its Credit Facility and granted the Consultant Principal 38,000 unrestricted shares of common stock of the Company. The Company recorded share-based compensation associated with this grant of approximately $0.1 million for the six months ended July 3, 2023. There was no expense included for the quarter ended July 3, 2023. On January 3, 2022, the Company granted the Consultant Principal 37,959, respectively, of unrestricted shares of common stock of the Company. The Company recorded share-based compensation associated with this grant of approximately $0.1 million and $0.2 million, respectively, during the quarter and and six months ended June 30, 2022 and $0.2 million for the six months ended July 3, 2023. There was no expense included for the quarter ended July 3, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 03, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation John Walker, Individually and On Behalf of all Other Similarly Situated v. BurgerFi International, Inc. et al (in the United States District Court, Southern District of Florida, Case No. 023-cv-60657). On April 6, 2023, John Walker, on behalf of himself and other similarly situated plaintiffs, filed a class action lawsuit against the Company and certain current and former executives alleging that the Company violated certain securities laws by making false and misleading statements or failed to disclose that (1) the Company had overstated the effectiveness of its acquisition and growth strategies, and (2) the Company had misrepresented the purported benefits of the Anthony’s acquisition and the post-acquisition business and financial prospects of the Company. On July 20, 2023, the court appointed John Walker and Joseph Poalino as co-lead plaintiffs in the matter. We believe that all claims are meritless and plan 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. Second 82nd SM, LLC v. BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. ( in the Supreme Court of the State of New York County of New York, having index No. 654907/2021 filed August 11, 2021). A lawsuit was filed by Second 82 nd SM, LLC (“ Landlord ”) against BF NY 82, LLC (“ Tenant ”) whereby Landlord brought a seven-count lawsuit for, among other things, breach of the lease agreement and underlying guaranty of the lease. The amount of damages Landlord is seeking approximately $1.5 million, which constitutes back rent, late charges, real estate taxes, illuminated sign charges and water/sewer charges. On November 3, 2021, the Company filed a Motion to Dismiss the Complaint. On November 17, 2021, the Tenant filed an Answer to Landlord’s Complaint and a cross claim against the Company, which the Company answered on December 7, 2021. On December 22, 2021, the Company filed its Response in Opposition to Landlord’s Motion for Summary Judgment and Memo in further Support of its Motion to Dismiss. The Company turned over possession of the property in early 2023. On July 5, 2023, the Landlord filed a Motion of Summary Judgment seeking approximately $1.2 million in past due rent payments. 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, which has not yet been scheduled. As a result, unless the parties otherwise agree to a settlement prior to the damages hearing, the Company expects a judgment to be entered against it of at least approximately $1.2 million. The parties continue to discuss possible settlement, including re-occupying the location, as well as the payment, including timing, of past due rent amounts to the Landlord. In the event of any such final judgment following the damages hearing, which the Company believes would be unlikely because it intends to enter into a settlement prior to the damages hearing or, if not, plans to raise additional capital prior to any judgment, it is possible the Company would not be in compliance with its Credit Agreement covenants, which could result in an event of default and an acceleration of all outstanding debt under the Credit Agreement. See Risk Factors included in our 2022 Form 10-K for a discussion of the potential material consequences to such an event. Lion Point Capital, L.P.(“Lion Point”) v. BurgerFi International, Inc. (Supreme Court of the State of New York County of New York, Index No. 653099/2022, filed August 26, 2022 . A lawsuit filed by Lion Point against the Company, alleging that the Company failed to timely register Lion Point’s shares in violation of the registration rights agreement to which Lion Point is a party, which allegedly resulted in losses in excess of $26 million. In November 2022, as amended in February 2023, the Company filed its answer to the complaint. On April 13, 2023, Lion Point filed a Motion for Summary Judgment, and the Company responded with its reply on June 22, 2023. The Company continues to believe that all claims are meritless and 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. Burger Guys of Dania Pointe, et. al. v. BFI, LLC (Circuit Court of the 15 th Judicial Circuit in and for Palm Beach County, Florida, Case No. 50-2021-CA -006501-XXXX-MB filed May 21, 2021). In response to a demand letter issued by BurgerFi to Gino Gargiulo, a former franchisee, demanding that Mr. Gargiulo pay the balance owed under an asset purchase agreement wherein BurgerFi sold the Dania Beach, Florida BurgerFi location to Mr. Gargiulo, Mr. Gargiulo filed suit against BurgerFi claiming, in addition to other matters, that no further monies are owed under the asset purchase agreement and alleges that the Company is responsible for one of Mr. Gargiulo’s failed franchises in Sunny Isles, Florida, losses he has allegedly sustained at his Dania Beach location, and reimbursement of expenses in connection with his marketing company. Mr. Gargiulo seeks damages in excess of $2 million in the aggregate. The parties attended mediation on January 20, 2022, which ended in an impasse. Mr. Gargiulo amended his complaint in April 2022, which, among other matters, amended the defendant parties. In October 2022, the Company filed an additional motion to dismiss the amended complaint and a motion to stay discovery. In January 2023, Mr. Gargiulo filed a third amended complaint. In March 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. All Round Food Bakery Products, Inc. v. BurgerFi International, LLC and Neri’s Bakery Products, Inc. et al (Supreme Court Westchester County, New York (Index Number 52170-2020)). In a suit filed in February 2020, the plaintiff, All Round Food Bakery Products, Inc. ( “All Round Food” ) alleges breach of contract and lost profits in excess of $1 million over the course of the supply agreement with the Company and Neri’s Bakery Products, Inc. (“ Neri’s ” and together with the Company, the “Defendants” ). The Defendants assert, among other matters, that the supply agreement amongst the parties, whereby All Round Food was warehousing BurgerFi products produced by Neri’s, was terminated when All Round Food failed to cure its material breach of the supply agreement after due notice. The parties attended several additional court ordered mediations during over the last several months to attempt to resolve the dispute, however, no resolution has been reached. We believe that all 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. Employment Related Claims . In July 2021, the Company received a demand letter from the attorney of one of its now former hourly restaurant employees. The letter alleges that the former employee was sexually harassed by one of her co-workers. The demand letter claims that the Company discriminated and retaliated against the former employee based on her gender and age and also alleged intentional infliction of emotional distress, negligent hiring, negligent training, and negligent supervision. While the Company entered into a partial settlement with the former employee in December 2022 for a de minimus cash amount relating solely to the discrimination claim, the other claims remain. While the Company believes that all claims of the above mentioned Employment Related Claims, which are covered under the Company’s insurance policies, are meritless, and it plans to defend these allegations, it is reasonably possible that the Company may ultimately be required to pay damages to the claimants, which could be up to $0.5 million or more in aggregate compensatory damages, attorneys’ fees and costs. Management believes that any liability, in excess of applicable insurance coverages or accruals, which may result from these claims, would not be significant to the Company’s financial position or results of operations. General Liability and Other Claims. The Company is subject to other legal proceedings and claims that arise during the normal course of business, including landlord disputes, slip and fall cases, and various food related matters. While it intends to vigorously defend these matters, it is reasonably possible that the Company may be required to pay substantial damages to the claimants. Management believes that any liability, in excess of applicable insurance coverages or accruals, which may result from these claims, would not be significant to the Company’s financial position or results of operations. Purchase Commitments From time to time, we enter into purchase commitments for certain food commodities in the normal course of business. As of July 3, 2023, we entered into approximately $3.2 million in unconditional purchase obligations over the next twelve months. |
Leases
Leases | 6 Months Ended |
Jul. 03, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into various lease agreements and these agreements expire on various dates through 2032 and have renewal options. The components of lease expense for the periods shown is as follows: Quarter 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 $ 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 The maturity of the Company's operating and finance lease liabilities as of July 3, 2023 is as follows: (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 As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. A summary of lease terms and discount rates for finance and operating leases is as follows: 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 % |
Leases | Leases The Company has entered into various lease agreements and these agreements expire on various dates through 2032 and have renewal options. The components of lease expense for the periods shown is as follows: Quarter 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 $ 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 The maturity of the Company's operating and finance lease liabilities as of July 3, 2023 is as follows: (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 As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. A summary of lease terms and discount rates for finance and operating leases is as follows: 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 % |
Debt
Debt | 6 Months Ended |
Jul. 03, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt (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 The Company is party to a credit agreement with a syndicate of commercial banks (as amended, the “Credit Agreement” ), which provides the Company with lender financing structured as a $52.9 million term loan and a $4.0 million available under the line of credit as of July 3, 2023, with a maturity date of September 30, 2025. On February 1, 2023, the Credit Agreement was amended through the Fourteenth Amendment and subsequently on February 24, 2023 further amended through the Fifteenth Amendment resulting in the Company and its subsidiaries entering into a Secured Promissory Note (the “ Note” ) with CP7 Warming Bag L.P., an affiliate of L. Catterton Fund L.P., as lender (the “ Junior Lender ”), pursuant to which the Junior Lender continued that certain 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. The terms of the Credit Agreement require the Company to repay 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 The Credit Agreement, including the term loan and revolving line of credit, is secured by substantially all of the Company’s assets and 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% The Delayed Draw Term Loan is a non-interest bearing loan and accordingly was recorded at fair value as part of the Anthony’s acquisition which resulted in a debt discount of approximately $1.3 million and is being amortized over the period 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 consolidated statements of operations. The Junior Indebtedness, which accrues interest at 4% per annum (i) is secured by a second lien on substantially all of the assets of the the Company and the subsidiary guarantors (the “ Guarantors ”) pursuant to the terms and that certain 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 “ Junior Maturity Date ”) (September 30, 2027, based on the maturity date under the Credit Agreement of September 30, 2025). Under the terms of the Junior Indebtedness, no payments of cash interest or payments of principal shall be due until the Junior Maturity Date, and no voluntary prepayments may be made on the Junior Indebtedness prior to the Junior Maturity Date until after the repayment in full of the obligations under the Credit Agreement. The Company had $14.4 million and $9.2 million recorded, net of unamortized discount under the Junior Indebtedness as of July 3, 2023 and January 2, 2023, respectively, included in related party note payable in the accompanying consolidated balance sheets. The amendments to the Credit Agreement and the Delayed Draw Term Loan were accounted for as modifications of debt in the Company’s accompanying consolidated financial statements. For the quarter and six months ended July 3, 2023 and June 30, 2022, interest expense consisted of: Quarter 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 |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 03, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the quarter and six months ended July 3, 2023, the Company's effective income tax rate was 0.0%. The difference from the U.S. corporate statutory federal income tax rate of 21%, 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. 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 had unrecognized tax benefits of $0.2 million. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jul. 03, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of the Company’s common stock are entitled to one vote for each share. At July 3, 2023 and January 2, 2023, there were 26,724,218 shares and 22,257,772 shares of common stock outstanding, respectively. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of July 3, 2023 and January 2, 2023, there were 2,120,000 shares of preferred stock outstanding. On February 24, 2023, the Company filed an amended and restated certificate of designation, (the “ A&R CoD ”), which among other matters, added a provision providing that in the event the Company fails to timely redeem any shares of Series 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. The A&R CoD also added a provision providing that in the event the Company fails to timely redeem any shares of Series A Junior Preferred Stock in connection with a Qualified 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 and its subsidiaries (or, alternatively, the sale of material assets) designed to yield the maximum cash proceeds to the Company available for redemption of the Series A Junior Preferred Stock as promptly as practicable, but in any event, within 12 months from the date of the Default. If on or after November 3, 2026, the Company is aware that it is reasonably unlikely to have sufficient cash to timely effect the redemption in full of the Series A Junior Preferred Stock when first due, the Company shall, prior to such anticipated due date, take reasonable steps to engage an investment banking firm of national standing (and other appropriate professionals) to conduct preparatory work for such a financing 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. The Series A Junior Preferred Stock ranks senior to the Common Stock and may be redeemed at the option of the Company at any time and must be redeemed by the Company in limited circumstances. The Series A Junior Preferred Stock shall not have voting rights or conversion rights. Warrants and Options As of July 3, 2023, the Company had the following warrants and options outstanding: 15,063,800 warrants outstanding, each exercisable for one share of common stock at an exercise price of $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. Warrant Liability The Company has private warrants, which include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging , with changes in fair value included in the accompanying consolidated statements of operations. The warrant liability was $0.6 million and $0.2 million at July 3, 2023 and January 2, 2023, respectively, and is included in other non-current liabilities on the accompanying consolidated balance sheets. The loss on change in fair value of warrant liabilities for the quarter and six months ended ended July 3, 2023 was $0.3 million and $0.4 million, respectively, and is recognized in the accompanying consolidated statements of operations. The gain on change in the fair value of warrant liabilities for the quarter 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. The following is an analysis of changes in the warrant liability: (in thousands) Warrant liability at January 2, 2023 $ 195 Loss during the period 391 Warrant liability at July 3, 2023 $ 586 The fair value of the warrants are determined using the publicly-traded price of our common stock on the valuation dates of $1.63 on July 3, 2023 and $1.26 on January 2, 2023. See Note 13, “Fair Value Measurements .” Share-Based Compensation The Company has the ability to grant stock options, stock appreciation rights, restricted stock, restricted stock units, other share-based awards and performance compensation awards to current or prospective employees, directors, officers, consultants or advisors under the Company’s 2020 Omnibus Equity Incentive Plan (the “Plan” ). On January 5, 2023, the Company filed a Registration Statement with the SEC to register 1,112,889 additional shares of common stock, $0.0001 par value per share, of the Company under the Plan, pursuant to the “evergreen” provision of the Plan providing for an automatic increase in the number of shares reserved for issuance under the Plan. As of July 3, 2023 and January 2, 2023, there were approxim ately 150,000 and 600,000 shares of common stock available for future grants under the Plan, respectively. Restricted Stock Unit Awards The following table summarizes activity of restricted stock units during the six months ended July 3, 2023: 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 Share-based compensation expense recognized during the quarter and six months ended July 3, 2023 was $0.6 million and $5.2 million, respectively. Share-based compensation expense recognized during the quarter and six months ended June 30, 2022 was approximately $0.9 million and $8.3 million, respectively. As of July 3, 2023, there was approximately $8.3 million of total unrecognized compensation cost related to unvested restricted stock units or performance-based restricted stock unit awards to be recognized over a weighted average period of 1.4 years. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 03, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair values of financial instruments are estimated using public market prices, quotes from financial institutions, and other available information. The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration. The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of July 3, 2023 and January 2, 2023. 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 $ — In estimating our fair value disclosures for financial instruments, we use the following methods and assumptions: The fair value of the Company warrant liability is measured at fair value on a recurring basis, classified as Level 2 in the fair value hierarchy. The fair value of the private placement warrants, private warrants, and working capital warrants are determined using the publicly-traded price of its common stock on the valuation dates of $1.63 on July 3, 2023 and $1.26 on January 2, 2023. The fair value is calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term, expected volatility, risk-free interest rate, dividend rate and service period. The calculated warrant price for private warrants was $0.16 and $0.05 on July 3, 2023 and January 2, 2023. The input variables for the Black-Scholes are noted in the table 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 — % — % Assets and liabilities that are measured at fair value on a non-recurring basis include our long-lived assets and 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 estimates were involved that are largely unobservable, they are classified as Level 3 inputs within the fair value hierarchy. 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. |
Segment Information
Segment Information | 6 Months Ended |
Jul. 03, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has two operating and reportable segments: BurgerFi and Anthony's. The Company’s measure of segment income is Adjusted EBITDA. 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. Although the Company had historically considered net income to be an appropriate measure of segment profit and loss, management believes Adjusted EBITDA is a more meaningful measure of the Company’s performance. Adjusted EBITDA is used by the Company to 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 believes that this adjusted measure provides a baseline for analyzing trends in its underlying business. The following table presents segment revenue and a 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 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jul. 03, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 7, 2023 the Credit Agreement was amended through the Sixteenth Amendment, which amended the definition of EBITDA for the purposes of expanding the scope of non-recurring items that may be included in our determination of Adjusted EBTIDA, as well as modifications to certain covenants for leverage and fixed charge ratios. As discussed in Note 8 “ Commitments and Contingencies ” to the consolidated financial statements included within this report for subsequent event regarding the case of Second 82 nd 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. Subsequent to July 3, 2023, the Company closed one Burgerfi and one Anthony’s store. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 03, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue 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 continue 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 the Company’s Annual Report on Form 10-K for the year ended January 2, 2023 (the “ 2022 Form 10-K ”), for further information. The Company’s credit agreement (“ Credit Agreement ”) with a syndicate 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. As discussed in Note 8 “ Commitments and Contingencies ” to the consolidated financial statements included within this report, in the case of Second 82 nd SM, LLC v. BF NY 82, LLC et al. , the Court entered an order granting the Landlord’s Motion for Summary Judgment and ordered a damages hearing on the motion. As a result, unless the parties otherwise agree to a settlement prior to the damages hearing, the Company expects a judgment to be entered against it of at least approximately $1.2 million. The parties, however, continue to discuss possible settlement prior to the damages 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 alternatives, including the need to refinance or restructure its debt, sell assets, or seek to raise additional capital, including debt or equity. If the Company is unable to implement one or more of these options or is otherwise unsuccessful in negotiating a settlement, which the Company believes is unlikely, and the court entered a final judgment against the Company, management believes it is possible that the Company will not be in compliance with certain of the financial covenants in its Credit Agreement, which would constitute a breach of the Credit Agreement and an event of default if not cured in accordance with its terms. Any such default would allow the lenders to call the debt sooner than its maturity date of September 30, 2025. In the event that the lenders do call the debt during the next 12 months as the result of a covenant breach, the Company is not 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. The Company has been and continues to be in communication with the Landlord to negotiate a settlement prior to the damages 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 such negotiations or actions. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that results from the uncertainty described above. The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States ( “U.S. GAAP” ) for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated balance sheet as of January 3, 2023 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended January 2, 2023 contained in the 2022 Form 10-K. We are required to evaluate 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 events 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 statements. |
Fiscal Period | On July 28, 2022, our Board of Directors approved the change to a 52-53-week fiscal year ending on the Monday nearest to December 31 of each year in order to improve the alignment of financial and business processes following the acquisition of Anthony’s. Our second fiscal quarter of 2023 ended on July 3, 2023. Our current fiscal year will end on January 1, 2024. As of June 30, 2022, the BurgerFi brand operated on a calendar year-end and the Anthony’s brand operated on a 52-53-week fiscal year. Differences arising from the different fiscal period-ends were not deemed material for the quarter ended June 30, 2022. |
Principles of Consolidation | Principles of Consolidation The consolidated 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. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year presentation to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies at the date of the unaudited consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
New Accounting Pronouncements | New Accounting Pronouncements The Company reviewed all recently issued accounting pronouncements and concluded that they were not applicable or not expected to have a significant impact on the accompanying consolidated financial statements. |
Organization (Tables)
Organization (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Accounting Policies [Abstract] | |
Summary of Store Activity | Store activity for the six months ended July 3, 2023 and the year ended January 2, 2023 is as follows: 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 |
Property & Equipment (Tables)
Property & Equipment (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of (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 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Components of Intangible Assets | The following is a summary of the components 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 |
Contract Liabilities (Tables)
Contract Liabilities (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract with Customer, Contract Asset, Contract Liability, and Receivable | A roll forward of contract liabilities included of which the current portion is included in other current liabilities and other noncurrent liabilities on our consolidated balance sheet is as follows: Six 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 Revenue recognized during the periods included in royalty 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 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Basic and Diluted Income (Loss) Per Common Share | Basic and diluted net loss per common share is calculated as follows: (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) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Leases [Abstract] | |
Lease, Cost | The components of lease expense for the periods shown is as follows: Quarter 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 $ 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 |
Lessee, Operating Lease, Liability, Maturity | The maturity of the Company's operating and finance lease liabilities as of July 3, 2023 is as follows: (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 |
Finance Lease, Liability, Fiscal Year Maturity | The maturity of the Company's operating and finance lease liabilities as of July 3, 2023 is as follows: (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 |
Assets And Liabilities, Lessee | A summary of lease terms and discount rates for finance and operating leases is as follows: 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 % |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | (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 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% |
Schedule of Maturities of Long-term Debt | The terms of the Credit Agreement require the Company to repay 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 |
Schedule of Interest Income and Interest Expense Disclosure | For the quarter and six months ended July 3, 2023 and June 30, 2022, interest expense consisted of: Quarter 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 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following is an analysis of changes in the warrant liability: (in thousands) Warrant liability at January 2, 2023 $ 195 Loss during the period 391 Warrant liability at July 3, 2023 $ 586 |
Summary of Activity of Restricted Stock Units | The following table summarizes activity of restricted stock units during the six months ended July 3, 2023: 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 The input variables for the Black-Scholes are noted in the table 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 — % — % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of July 3, 2023 and January 2, 2023. 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 $ — |
Input Variable for Black-Scholes Model | The following table summarizes activity of restricted stock units during the six months ended July 3, 2023: 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 The input variables for the Black-Scholes are noted in the table 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 — % — % |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 03, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following table presents segment revenue and a 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 |
Organization - Narrative (Detai
Organization - Narrative (Details) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Aug. 16, 2023 store | Jul. 03, 2023 store brand | Jan. 02, 2023 store | Dec. 31, 2021 store | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of restaurants | 174 | 174 | ||
Number of brands | brand | 2 | |||
Number of international stores | 2 | 1 | ||
BurgerFi | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of restaurants | 114 | 114 | 118 | |
Number of stores closed | 5 | 15 | ||
BurgerFi | Subsequent Event | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of stores closed | 1 | |||
Anthony's | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of restaurants | 60 | 60 | 61 | |
Number of stores closed | 0 | 1 | ||
Anthony's | Subsequent Event | ||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | ||||
Number of stores closed | 1 |
Organization - Summary of Store
Organization - Summary of Store Activity (Details) - store | 6 Months Ended | 12 Months Ended |
Jul. 03, 2023 | Jan. 02, 2023 | |
Store Activity [Roll Forward] | ||
Stores, beginning of year | 174 | |
Stores, end of year | 174 | 174 |
BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 114 | 118 |
Number of stores opened | 5 | 11 |
Number of stores acquired or transferred | 0 | 0 |
Number of stores closed | (5) | (15) |
Stores, end of year | 114 | 114 |
Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 60 | 61 |
Number of stores opened | 0 | 0 |
Number of stores closed | 0 | (1) |
Stores, end of year | 60 | 60 |
Corporate-owned | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 85 | |
Stores, end of year | 87 | 85 |
Corporate-owned | BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 25 | 25 |
Number of stores opened | 0 | 3 |
Number of stores acquired or transferred | 2 | (3) |
Number of stores closed | 0 | 0 |
Stores, end of year | 27 | 25 |
Corporate-owned | Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 60 | 61 |
Number of stores opened | 0 | 0 |
Number of stores closed | 0 | (1) |
Stores, end of year | 60 | 60 |
Franchised | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 89 | |
Stores, end of year | 87 | 89 |
Franchised | BurgerFi | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 89 | 93 |
Number of stores opened | 5 | 8 |
Number of stores acquired or transferred | (2) | 3 |
Number of stores closed | (5) | (15) |
Stores, end of year | 87 | 89 |
Franchised | Anthony's | ||
Store Activity [Roll Forward] | ||
Stores, beginning of year | 0 | 0 |
Number of stores opened | 0 | 0 |
Number of stores closed | 0 | 0 |
Stores, end of year | 0 | 0 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Aug. 14, 2023 | Aug. 11, 2021 | Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | Jan. 02, 2023 | |
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Debt outstanding | $ 67,683 | $ 67,683 | $ 68,014 | ||||
Income taxes receivable | 100 | 100 | 1,500 | ||||
Prepaid expenses | 1,300 | 1,300 | 900 | ||||
Assets held for sale | 1,527 | 1,527 | 732 | ||||
Good faith and margin deposit with broker-dealer | 900 | 900 | |||||
Gift card and gift certificate liabilities | 1,000 | 1,000 | 1,800 | ||||
Customer loyalty program liability | 900 | 900 | 800 | ||||
Restructuring costs and other charges, net | 1,135 | $ 52 | 2,174 | $ 1,040 | |||
Severance costs | $ 1,100 | $ 1,100 | |||||
Line of credit facility, increase | 1,100 | ||||||
Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | Settled Litigation | |||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Loss contingency, damages sought | $ 1,200 | ||||||
Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | Settled Litigation | Subsequent Event | |||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Loss contingency, damages sought | $ 1,200 | ||||||
Term loan | |||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Debt outstanding | 52,800 | 52,800 | |||||
Anthony's | |||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Assets held for sale | 800 | 800 | |||||
BF Dania Beach, LLC | |||||||
Nature Of Operations And Summary Of Significant Accounting Policies [Line Items] | |||||||
Assets held for sale | $ 700 | $ 700 | $ 700 |
Property & Equipment - Summary
Property & Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Jul. 03, 2023 | Jan. 02, 2023 |
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 30,498 | $ 29,407 |
Less: Accumulated depreciation and amortization | (12,251) | (10,036) |
Property and equipment – net | 18,247 | 19,371 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 17,623 | 17,029 |
Kitchen equipment and other equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 8,450 | 8,196 |
Computers and office equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 1,549 | 1,468 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | 2,870 | 2,677 |
Vehicles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment – gross | $ 6 | $ 37 |
Property & Equipment - Narrativ
Property & Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1.2 | $ 2.6 | $ 2.3 | $ 4.9 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Goodwill Rollforward (Details) - USD ($) $ in Thousands | Jul. 03, 2023 | Jan. 02, 2023 |
Finite Lived Intangible Assets [Line Items] | ||
Amount | $ 169,874 | $ 169,876 |
Accumulated Amortization | (20,591) | (16,346) |
Net Carrying Value | 149,283 | 153,530 |
Net Carrying Value | 155,213 | 160,208 |
Goodwill | 31,621 | 31,621 |
BurgerFi | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill | 0 | 0 |
Anthony's | ||
Finite Lived Intangible Assets [Line Items] | ||
Goodwill | 31,621 | 31,621 |
Franchise agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 24,839 | 24,839 |
Accumulated Amortization | (9,019) | (7,245) |
Net Carrying Value | 15,820 | 17,594 |
Trade names/trademarks | BurgerFi | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 83,033 | 83,035 |
Accumulated Amortization | (7,035) | (5,650) |
Net Carrying Value | 75,998 | 77,385 |
Trade names/trademarks | Anthony's | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 60,690 | 60,691 |
Accumulated Amortization | (3,372) | (2,360) |
Net Carrying Value | 57,318 | 58,331 |
License agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 1,177 | 1,176 |
Accumulated Amortization | (1,131) | (1,063) |
Net Carrying Value | 46 | 113 |
Liquor licenses | ||
Finite Lived Intangible Assets [Line Items] | ||
Liquor licenses | 5,930 | 6,678 |
VegeFi product | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 135 | 135 |
Accumulated Amortization | (34) | (28) |
Net Carrying Value | $ 101 | $ 107 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 2.1 | $ 2.1 | $ 4.2 | $ 4.2 |
Contract Liabilities - Analysis
Contract Liabilities - Analysis of Deferred Revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2023 | Jun. 30, 2022 | |
Contract With Customer, Liability Activity [Roll Forward] | ||
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) | 0 |
Balance, end of period | $ 782 | $ 2,182 |
Contract Liabilities - Summary
Contract Liabilities - Summary of Franchise Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Franchise Fees | ||||
Disaggregation Of Revenue [Line Items] | ||||
Recognized revenue | $ 380 | $ 534 | $ 513 | $ 686 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | 6 Months Ended |
Jul. 03, 2023 shares | |
Public Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 15,063,800 |
Warrant | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 75,000 |
Common Stock | Unit Purchase Option | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 75,000 |
Restricted Shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,724,639 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Numerator: | ||||
Net loss attributable to common stockholders | $ (6,001) | $ (60,377) | $ (15,153) | $ (73,937) |
Denominator: | ||||
Diluted weighted-average shares outstanding (in shares) | 24,891,449 | 22,214,628 | 24,216,199 | 22,089,799 |
Basic net loss per common share (in USD per share) | $ (0.24) | $ (2.72) | $ (0.63) | $ (3.35) |
Diluted net loss income per common share (in USD per share) | $ (0.24) | $ (2.72) | $ (0.63) | $ (3.35) |
Related Party Transactions (Det
Related Party Transactions (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||||||
Jan. 23, 2023 USD ($) location store shares | Jan. 03, 2023 USD ($) shares | Jan. 03, 2022 shares | Jul. 03, 2023 USD ($) | Jun. 30, 2022 USD ($) store | Jul. 03, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Jun. 03, 2023 $ / shares | Jan. 02, 2023 USD ($) | Sep. 01, 2022 USD ($) | Feb. 28, 2022 | Jan. 01, 2020 | |
Related Party Transaction [Line Items] | ||||||||||||
Rent expense | $ 100 | $ 100 | ||||||||||
Shares issued in private placement (in shares) | shares | 2,868,853 | |||||||||||
Issuance price (in dollars per share) | $ / shares | $ 1.22 | |||||||||||
Shares issued in private placement | $ 3,436 | $ 3,436 | ||||||||||
Percentage of stock held by investor | 11% | |||||||||||
Stores Acquired From Stockholder | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Due from the stockholder | location | 5 | |||||||||||
Number of stores acquired or transferred | store | 2 | |||||||||||
Number of entities acquired | store | 3 | |||||||||||
Consideration paid | $ 900 | |||||||||||
Cash | $ 500 | |||||||||||
Shares issued to acquire business (in shares) | shares | 200,000 | |||||||||||
Value of stock transferred | $ 400 | |||||||||||
Fair value of net liabilities | $ 100 | |||||||||||
Leased Building Space | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Rent expense | $ 100 | 100 | ||||||||||
Affiliated Entity | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of stores acquired or transferred | store | 2 | |||||||||||
Affiliated Entity | Independent Contractor Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Due to related party | $ 100 | |||||||||||
Affiliated Entity | Entity Under Common Ownership With Significant Shareholder | Leased Building Space | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Lease term | 36 months | |||||||||||
Affiliated Entity | Entity Under Common Ownership With Significant Shareholder | Leased Building Space Amendment | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Rent expense | 200 | $ 200 | ||||||||||
Lease term | 10 years | |||||||||||
Affiliated Entity | Consultant | Restricted Stock Units (RSUs) | Strategic Advisory Services, 2023 Program | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Share-based compensation expense | $ 100 | 0 | 100 | |||||||||
Affiliated Entity | Consultant | Restricted Stock Units (RSUs) | Strategic Advisory Services, 2022 Program | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Share-based compensation expense | $ 0 | $ 200 | $ 200 | $ 100 | ||||||||
Chief Operating Officer | Common Stock | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares granted (in shares) | shares | 38,000 | 37,959 | ||||||||||
Related Party | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Due from related party | $ 0 | |||||||||||
Due to related party | $ 300 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 1 Months Ended | 18 Months Ended | ||||
Aug. 14, 2023 USD ($) | Aug. 11, 2021 USD ($) claim | May 21, 2021 USD ($) | Feb. 29, 2020 USD ($) | Aug. 26, 2022 USD ($) | Jul. 03, 2023 USD ($) | |
Commitments And Contingencies [Line Items] | ||||||
Purchase commitment | $ 3.2 | |||||
Employee Retention Claims | ||||||
Commitments And Contingencies [Line Items] | ||||||
Estimate of possible loss | $ 0.5 | |||||
Pending Litigation | Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 1.5 | |||||
Pending claims | claim | 7 | |||||
Pending Litigation | Lion Point Capital Allegation | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 26 | |||||
Pending Litigation | Burger Guys of Dania Pointe, et. al | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 2 | |||||
Pending Litigation | All Round Food Bakery Products, Inc. v. BurgerFi International, LLC and Neri’s Bakery Products, Inc. et al | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 1 | |||||
Settled Litigation | Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 1.2 | |||||
Settled Litigation | Second 82nd SM, LLC c BF NY 82, LLC, BurgerFi International, LLC and BurgerFi International, Inc. | Subsequent Event | ||||||
Commitments And Contingencies [Line Items] | ||||||
Loss contingency, damages sought | $ 1.2 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 3,218 | $ 3,097 | $ 6,463 | $ 6,348 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 55 | 82 | 113 | 134 |
Interest on lease liabilities | 13 | 19 | 27 | 31 |
Less: Sublease income | (47) | (47) | (94) | (94) |
Total lease cost | $ 3,239 | $ 3,151 | $ 6,509 | $ 6,419 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) - USD ($) $ in Thousands | Jul. 03, 2023 | Jan. 02, 2023 |
Operating Leases | ||
One Year | $ 12,274 | |
Two Years | 12,154 | |
Three Years | 11,687 | |
Four Years | 9,804 | |
Five Years | 8,173 | |
Thereafter | 10,217 | |
Total undiscounted lease payments | 64,309 | |
Less: present value adjustment | (11,146) | |
Total net lease liabilities | 53,163 | |
Finance Leases | ||
One Year | 142 | |
Two Years | 182 | |
Three Years | 167 | |
Four Years | 158 | |
Five Years | 152 | |
Thereafter | 208 | |
Total undiscounted lease payments | 1,009 | |
Less: present value adjustment | (158) | |
Total net lease liabilities | $ 851 | $ 933 |
Leases - Lease Terms and Discou
Leases - Lease Terms and Discount Rates (Details) | Jul. 03, 2023 | Jun. 30, 2022 |
Weighted-average remaining lease term (in years) | ||
Operating leases | 5 years 9 months 18 days | 6 years 4 months 24 days |
Finance leases | 5 years 10 months 24 days | 6 years 7 months 6 days |
Weighted-average discount rate | ||
Operating leases | 7.10% | 6% |
Finance leases | 6% | 6% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jul. 03, 2023 | Jan. 02, 2023 |
Debt Instrument [Line Items] | ||
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 |
Related party note payable | ||
Debt Instrument [Line Items] | ||
Related party note payable | 15,100 | 10,000 |
Term loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 52,880 | 54,507 |
Total Debt, net | 52,800 | |
Revolving line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | $ 4,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Feb. 24, 2023 | Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | Jan. 02, 2023 | |
Debt Instrument [Line Items] | ||||||
Unamortized debt discount | $ 688 | $ 688 | $ 765 | |||
Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | 52,880 | 52,880 | 54,507 | |||
Revolving line of credit | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | 0 | 0 | 4,000 | |||
Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Amortization of debt issuance costs | 38 | $ 110 | 77 | $ 292 | ||
Credit Agreement | Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt forgiven | $ 10,000 | |||||
Credit Agreement | Revolving line of credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, maximum borrowing capacity | 4,000 | 4,000 | ||||
Credit Agreement | Loans Payable, Noncurrent | ||||||
Debt Instrument [Line Items] | ||||||
Unamortized debt discount | 1,300 | 1,300 | ||||
Amortization of debt issuance costs | 100 | 100 | ||||
Credit Agreement | Loans Payable, Noncurrent | Related Party | ||||||
Debt Instrument [Line Items] | ||||||
Related party note payable | 14,400 | 14,400 | 9,200 | |||
New Junior Subordinated Secured Notes | Junior Subordinated Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 5,100 | |||||
Interest rate | 4% | |||||
Related party note payable | ||||||
Debt Instrument [Line Items] | ||||||
Related party note payable | $ 15,100 | $ 15,100 | $ 10,000 |
Debt - Repayment of Principal (
Debt - Repayment of Principal (Details) - Credit Agreement $ in Thousands | Jul. 03, 2023 USD ($) |
Maturities of Long-term Debt [Abstract] | |
2023 | $ 3,254 |
2024 | 3,254 |
2025 | 46,372 |
Total | $ 52,880 |
Debt Interest Incurred (Details
Debt Interest Incurred (Details) - Credit Agreement | Jul. 03, 2023 |
Interest Period One | |
Debt Instrument [Line Items] | |
Interest Rate | 6.75% |
Interest Period Two | |
Debt Instrument [Line Items] | |
Interest Rate | 6.75% |
Interest Period Three | |
Debt Instrument [Line Items] | |
Interest Rate | 6.75% |
Interest Period Four | |
Debt Instrument [Line Items] | |
Interest Rate | 7.25% |
Interest Period Five | |
Debt Instrument [Line Items] | |
Interest Rate | 7.75% |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Interest on credit agreement | $ 1,079 | $ 1,024 | $ 2,130 | $ 1,830 |
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 |
Interest expense on debt | 2,211 | 2,246 | 4,289 | 4,318 |
Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs | $ 38 | $ 110 | $ 77 | $ 292 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax rate | 0% | 0.60% | 0% | 0.60% |
Unrecognized tax benefits | $ 0.2 | $ 0.2 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Feb. 24, 2023 | Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | Jan. 05, 2023 | Jan. 02, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common stock, shares, outstanding (in shares) | 26,724,218 | 26,724,218 | 22,257,772 | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares outstanding (in shares) | 2,120,000 | 2,120,000 | 2,120,000 | ||||
Dividend rate | 10% | ||||||
Preferred stock, default rate | 2% | ||||||
Preferred stock, default rate increase | 0.35% | ||||||
Warrants outstanding (in shares) | 15,063,800 | 15,063,800 | |||||
Warrants exercise price (in USD per share) | $ 11.50 | $ 11.50 | |||||
UPO units that are exercisable (in shares) | 75,000 | ||||||
Warrant liability | $ 586 | $ 586 | $ 195 | ||||
Loss (gain) on change in fair value of warrant liabilities | 318 | $ (1,858) | 391 | $ (1,324) | |||
Additional shares issued (in shares) | 1,112,889 | ||||||
Share-based compensation expense | $ 556 | $ 909 | $ 5,230 | $ 8,285 | |||
Measurement Input, Share Price | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Warrants, measurement input | 1.63 | 1.63 | 1.26 | ||||
2020 Omnibus Equity Incentive Plan | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common shares available for future grants (in shares) | 150,000 | 150,000 | 600,000 | ||||
Restricted Stock Units (RSUs) | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unrecognized compensation cost | $ 8,300 | $ 8,300 | |||||
Unrecognized stock-based compensation expense, weighted-average recognition period | 1 year 4 months 24 days | ||||||
Public Warrants | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Warrants outstanding (in shares) | 11,468,800 | 11,468,800 | |||||
Private Placement | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Warrants outstanding (in shares) | 3,000,000 | 3,000,000 | |||||
Private Warrants | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Warrants outstanding (in shares) | 445,000 | 445,000 | |||||
Warrants exercise price (in USD per share) | $ 0.16 | $ 0.16 | $ 50,000 | ||||
Working Capital Warrants | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Warrants outstanding (in shares) | 150,000 | 150,000 | |||||
UPO Units Exercise Price One | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
UPO units exercise price (in USD per share) | $ 10 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Warrant Liability [Roll Forward] | ||||
Warrant liability at January 2, 2023 | $ 195 | |||
Loss during the period | $ 318 | $ (1,858) | 391 | $ (1,324) |
Warrant liability at July 3, 2023 | $ 586 | $ 586 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jul. 03, 2023 $ / shares shares | |
Number of Restricted Stock Units | |
Non-vested, beginning balance (in shares) | shares | 1,445,600 |
Granted (in shares) | shares | 744,960 |
Vested (in shares) | shares | (328,968) |
Forfeited (in shares) | shares | (161,698) |
Non-vested, ending balance (in shares) | shares | 1,699,894 |
Weighted Average Grant Date Fair Value | |
Non-vested, beginning balance (in USD per share) | $ / shares | $ 11.68 |
Granted (in USD per share) | $ / shares | 1.23 |
Vested (in USD per share) | $ / shares | 13.84 |
Forfeited (in USD per share) | $ / shares | 6.37 |
Non-vested, ending balance (in USD per share) | $ / shares | $ 7.15 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Hierarchy (Details) - USD ($) $ in Thousands | Jul. 03, 2023 | Jan. 02, 2023 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | $ 586 | $ 195 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | 0 |
Total | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 195 | |
Total | 586 | 195 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Jul. 03, 2023 $ / shares | Jan. 02, 2023 $ / shares |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrants exercise price (in USD per share) | $ 11.50 | |
Private Warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrants exercise price (in USD per share) | $ 0.16 | $ 50,000 |
Measurement Input, Share Price | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrants, measurement input | 1.63 | 1.26 |
Fair Value Measurements - Black
Fair Value Measurements - Black Scholes Measurement Inputs (Details) | Jul. 03, 2023 yr | Jan. 02, 2023 yr |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0466 | 0.0414 |
Expected life in years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 2.5 | 3 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.830 | 0.680 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Jul. 03, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Financial Statement Data by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2023 | Jun. 30, 2022 | Jul. 03, 2023 | Jun. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenue by Segment | $ 43,427 | $ 45,298 | $ 89,154 | $ 90,228 |
Net loss | (6,001) | (60,377) | (15,153) | (73,937) |
Goodwill impairment | 0 | 55,168 | ||
Interest expense | 2,211 | 2,246 | 4,289 | 4,318 |
Restructuring costs | 1,135 | 52 | 2,174 | 1,040 |
(Loss) gain on change in value of warrant liability | 318 | (1,858) | 391 | (1,324) |
Income tax expense (benefit) | 2 | (335) | 2 | (447) |
Parent Company | ||||
Segment Reporting Information [Line Items] | ||||
Revenue by Segment | 43,427 | 45,298 | 89,154 | 90,228 |
Net loss | (6,001) | (60,377) | (15,153) | (73,937) |
Goodwill impairment | 0 | 55,168 | 0 | 55,168 |
Lease termination recovery | 0 | (42) | 0 | |
Employee retention credits | 0 | 0 | ||
Share-based compensation expense | 556 | 909 | 5,230 | 8,285 |
Depreciation and amortization expense | 3,295 | 4,730 | 6,522 | 9,174 |
Interest expense | 2,211 | 2,246 | 4,289 | 4,318 |
Restructuring costs | 1,127 | 0 | 2,044 | 0 |
Merger, acquisition and integration costs | 299 | 1,893 | 627 | 2,304 |
Legal settlements | 228 | 187 | 510 | 312 |
Store closure costs | 50 | 52 | 171 | 566 |
(Loss) gain on change in value of warrant liability | 318 | (1,858) | 391 | (1,324) |
Pre-opening costs | 0 | 474 | ||
Income tax expense (benefit) | 2 | (335) | 2 | (447) |
(Gain) loss on sale of assets | (10) | 0 | (10) | 0 |
Adjusted EBITDA | 2,033 | 2,615 | 4,581 | 4,893 |
BurgerFi | ||||
Segment Reporting Information [Line Items] | ||||
Revenue by Segment | 11,567 | 13,458 | 24,148 | 25,853 |
Net loss | (5,159) | (21,726) | (14,757) | (34,686) |
Goodwill impairment | 0 | 17,505 | 0 | 17,505 |
Lease termination recovery | (42) | 0 | ||
Employee retention credits | 0 | 0 | ||
Share-based compensation expense | 529 | 909 | 5,203 | 8,285 |
Depreciation and amortization expense | 2,147 | 2,616 | 4,237 | 5,123 |
Interest expense | 1,004 | 992 | 1,922 | 1,957 |
Restructuring costs | 413 | 0 | 1,078 | 0 |
Merger, acquisition and integration costs | 234 | 1,846 | 562 | 2,191 |
Legal settlements | 225 | 187 | 507 | 312 |
Store closure costs | 9 | 52 | 74 | 586 |
(Loss) gain on change in value of warrant liability | 318 | (1,858) | 391 | (1,324) |
Pre-opening costs | 0 | 474 | ||
Income tax expense (benefit) | 0 | (341) | 0 | (451) |
(Gain) loss on sale of assets | (6) | 0 | (6) | 0 |
Adjusted EBITDA | (328) | 182 | (831) | (28) |
Anthony's | ||||
Segment Reporting Information [Line Items] | ||||
Revenue by Segment | 31,860 | 31,840 | 65,005 | 64,375 |
Net loss | (842) | (38,651) | (396) | (39,251) |
Goodwill impairment | 0 | 37,663 | 0 | 37,663 |
Lease termination recovery | 0 | 0 | 0 | 0 |
Employee retention credits | 0 | 0 | ||
Share-based compensation expense | 27 | 0 | 27 | 0 |
Depreciation and amortization expense | 1,148 | 2,114 | 2,285 | 4,051 |
Interest expense | 1,207 | 1,254 | 2,367 | 2,361 |
Restructuring costs | 714 | 0 | 966 | 0 |
Merger, acquisition and integration costs | 65 | 47 | 65 | 113 |
Legal settlements | 3 | 0 | 3 | 0 |
Store closure costs | 41 | 0 | 97 | (20) |
(Loss) gain on change in value of warrant liability | 0 | 0 | 0 | 0 |
Pre-opening costs | 0 | 0 | ||
Income tax expense (benefit) | 2 | 6 | 2 | 4 |
(Gain) loss on sale of assets | (4) | 0 | (4) | 0 |
Adjusted EBITDA | $ 2,361 | $ 2,433 | $ 5,412 | $ 4,921 |
Subsequent Events (Details)
Subsequent Events (Details) - store | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Aug. 16, 2023 | Jul. 03, 2023 | Jan. 02, 2023 | |
BurgerFi | |||
Subsequent Event [Line Items] | |||
Number of stores closed | 5 | 15 | |
BurgerFi | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of stores closed | 1 | ||
Anthony's | |||
Subsequent Event [Line Items] | |||
Number of stores closed | 0 | 1 | |
Anthony's | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of stores closed | 1 |