Just weeks after warning investors of a potential bankruptcy, BurgerFi International, Inc. has received two deficiency notices from Nasdaq warning that the Fort Lauderdale, Fla.-based company is not in compliance with stock market listing requirements. According to the Aug. 27 notices, BurgerFi failed to file its quarterly 10-Q report for the quarter ended July 1 in time, and the composition of its board committees are not in compliance with stock market rules following the resignation of multiple board directors.
According to BurgerFi’s press release, the company is required to submit a plan within 60 days to regain compliance with the Nasdaq stock market regarding the delinquent 10-Q form, and if it is accepted by Nasdaq, BurgerFi will have until Feb. 18, 2025 to put this plan into action. For the second stock market compliance violation, BurgerFi has 45 days to submit a plan to regain compliance the noncompliance of its audit and compensation committees.
“The company will evaluate available options to regain compliance within the compliance periods, including submission of such plans,” BurgerFi said in a statement. “However, there can be no assurance that the company will submit the plans, Nasdaq will accept the plans, or the company will regain compliance within the compliance periods or maintain compliance with the other Nasdaq listing requirements.”
This is the latest bout of bad news for the fast-casual burger brand, which also owns casual-dining brand, Anthony’s Coal Fired Pizza & Wings. In May, BurgerFi announced that it would be “considering strategic alternatives” amid continued fiscal challenges. At the time, the company had entered into a forbearance agreement with its existing creditors, which lasted until July 31, and the BurgerFi’s lenders loaned the company $4 million during this “strategic review process.”
Earlier this month, BurgerFi submitted a 10-Q form, noting that it could not submit its most recent quarterly earnings report due to “significant adverse developments that occurred with respect to the company’s business and liquidity.” In the notice, BurgerFi estimates that its sales declined by 4%, or about $1.8 million, year-over-year, and estimates a net loss of $18.4 million for the quarter.
The company stated that “there is substantial doubt about the company’s ability to continue to operate as a going concern,” and noted that strategic solutions are being considered including seeking “additional financing, attempting to sell some or all of its assets or the entire company.”
If BurgerFi does not receive adequate funding relief, “it may seek protection under applicable bankruptcy laws.”
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