Quarterly report pursuant to Section 13 or 15(d)

Organization and Summary of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2022
Accounting Policies [Abstract]  
Organization and Summary of Significant Accounting Policies Organization and Summary of Significant Accounting Policies

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. On November 3, 2021, the Company acquired (the “Anthony's acquisition”) 100% of the outstanding shares of Hot Air, Inc. (“Hot Air”). Hot Air, through its subsidiaries, owns the business of operating upscale casual dining restaurants in the specialty pizza and wings segment under the name “Anthony's Coal Fired Pizza & Wings” (“Anthony's”).

As of June 30, 2022, the Company had 183 franchised and corporate-owned restaurants of the two following brands:

BurgerFi. BurgerFi is a fast-casual “better burger” concept with 122 franchised and corporate-owned restaurants as of June 30, 2022, offering burgers, hot dogs, crispy chicken, frozen custard, hand-cut fries, shakes, beer, wine and more.

Anthony’s. Anthony’s is a pizza and wing brand that operated 61 corporate-owned casual restaurant locations, as of June 30, 2022. 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.

Basis of presentation

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 December 31, 2021 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 December 31, 2021 contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

As of June 30, 2022, the Company operated on a calendar year-end. Anthony's uses a 52-week or 53-week fiscal year-end and its fiscal year ends on the Monday closest to December 31. Differences arising from the different fiscal year-ends were not deemed material for the period ended June 30, 2022 and the year ended December 31, 2021.


Certain reclassifications have been made to the prior year presentation to conform to the current year presentation.

Principles of Consolidation

The condensed 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.
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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Corporate-owned stores and Franchised stores

Store activity for the six month period ended June 30, 2022 and the year ended December 31, 2021 are as follows:

June 30, 2022 December 31, 2021
Corporate-owned Franchised Total Corporate-owned Franchised Total
Total BurgerFi and Anthony's 86  97  183  86  93  179 
BurgerFi stores, beginning of the period 25  93  118  17  102  119 
BurgerFi stores opened 10  16 
BurgerFi stores transferred (3) —  (1) — 
BurgerFi stores closed —  (4) (4) (1) (16) (17)
BurgerFi total stores, end of the period 25  97  122  25  93  118 
Anthony's stores, beginning of period 61  —  61  61  —  61 
Anthony's total stores, end of the period 61    61  61    61 

End of quarter and end of year store totals included 1 international store at June 30, 2022 and December 31, 2021.

Net (Loss) Income per Common Share

Net (loss) income per common share is computed by dividing net (loss) income 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) 1,620,869 shares of restricted stock unit grants in the calculation of income per share, and (4) the impact of any dividends associated with our redeemable preferred stock.
Reconciliation of Net (Loss) Income per Common Share

Basic and diluted net (loss) income per common share is calculated as follows:

(in thousands, except for per share data) Three Months Ended Six Months Ended
Numerator: June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Net (loss) income attributable to common shareholders $ (60,377) $ 8,991  $ (73,937) $ 781 
Reversal of gain on change in value of warrant liability —  (12,619) —  (7,673)
Net (loss) available to common shareholders - diluted $ (60,377) $ (3,628) $ (73,937) $ (6,892)
Weighted-average shares outstanding, basic 22,214,628  17,888,140  22,089,799  17,852,493 
Effect of dilutive securities:
Restricted stock grants and warrants —  847,417  —  2,261,954 
UPOs —  17,381  —  30,837 
Diluted weighted-average shares outstanding 22,214,628  18,752,938  22,089,799  20,145,284 
Basic net (loss) income per common share $ (2.72) $ 0.50  $ (3.35) $ 0.04 
Diluted net loss per common share $ (2.72) $ (0.19) $ (3.35) $ (0.34)

For the three and six months ended June 30, 2022, there were no dilutive warrants.

New Accounting Standards Adopted

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months and disclose certain information about the leasing arrangements. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company elected the package of practical expedients permitted under the new guidance, which includes allowing the Company to continue utilizing historical classification of leases. The Company adopted the requirements of the new standard as of the first day of fiscal year 2022 using the modified retrospective approach without restating comparative periods. See Note 13. Leases for further disclosures upon adoption.