BurgerFi International, Inc. Post-effective amendment to a registration statement that is not immediately effective upon filing

Post-effective amendment to a registration statement that is not immediately effective upon filing

Nature of Operations and Summary of Significant Accounting Policies (Tables)

Nature of Operations and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Store activity for the years ended December 31, 2020 and 2019 is as follows:


	Successor 2020			Predecessor 2019
Franchised stores, beginning of year		117			109
Stores opened during the year		9			15
Stores transferred/sold to the Company		(2	)		0
Stores closed during the year		(22	)		(7	)

Franchised stores, end of year		102			117


	Successor 2020		Predecessor 2019
Company-owned stores, beginning of year		13		11
Stores opened during the year		2		3
Stores transferred/sold to the Company		2		0
Stores closed during the year		—		(1	)

Company-owned stores, end of year		17		13

Summary of Fair Values of Assets Acquired Net of Current Liabilities

The consideration was the fair value of the three loans at the Takeover Date and the assets are recorded based on the fair values of the assets acquired, net of current liabilities as of the Takeover Date as follows (in thousands):


Cash	$	39
Accounts Receivable		1
Inventory		28
Other current assets		24
Property & equipment		1,126
Other assets		4
Current liabilities		(330	)

Net tangible and identifiable intangible assets acquired		892
Goodwill		397

Net assets acquired	$	1,289


(in thousands)	Fair Value December 16, 2020
Cash	$	2,179
Cash - restricted		611
Accounts receivable		378
Inventory		260
Other current assets		1,235
Property and equipment		8,520
Intangible assets		117,124
Other assets		199
Accounts payable - trade		(1,952	)
Accrued expenses		(1,057	)
Gift card liability		(292	)
Revolving line of credit		(3,012	)
Current portion of deferred franchise fees		(521	)
Other deposit		(907	)
Deferred initial franchise fees, net of current portion		(2,531	)
Notes payable		(2,889	)

Fair Value of Tangible and Identifiable Intangible assets and liabilities assumed	$	117,345

Consideration paid		236,887

Goodwill	$	119,542

Summary of Consolidated Financial Statements from Variable Interest Entities

Included in the consolidated financial statements are the following from variable interest entities for which the Company was the primary beneficiary (in thousands):


	Predecessor December 31, 2019
Cash	$	3
Property and equipment		853
Goodwill		398

Total Assets	$	1,254

Current notes payable	$	1,207
Notes payable – net of current portion		—

Total liabilities		1,207
Total members’ equity		47

Total Liabilities and Members’ Equity	$	1,254

Summary of Calculation of Basic and Diluted income (loss) Per Common Share

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


	Successor December 16, 2020 through December 31, 2020
Numerator:
Net income available to common stockholders	$	5,348,000
Reversal of Gain on change in value of warrant liability		(5,597,000	)


Net loss available to common shareholders - diluted	$	(249,000	)


Denominator:
Weighted-average shares outstanding		17,541,838
Effect of dilutive securities
Restricted stock grants and warrants		3,468,872
UPOs		415,405

Diluted weighted-average shares outstanding		21,426,115

Basic net income per common share	$	0.30

Diluted net loss per common share	$	(0.01	)

Summary of the revisions to previously reported financial information

A summary of the revisions to previously reported financial information is as follows:


Revised Consolidated Statement of Operations Data for the six months ended June 30, 2020 (Unaudited)	As Reported		Adjustment			As Revised
Restaurant Sales	$	12,097	$	(315	)	$	11,782
Total Revenue	$	15,864	$	(315	)	$	15,549
Labor and Related Expenses	$	3,463	$	(315	)	$	3,148
Total Operating Expenses	$	14,930	$	(315	)	$	14,615

Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2020 (Unaudited)	As Reported		Adjustment			As Revised
Restaurant Sales	$	18,892	$	(441	)	$	18,451
Total Revenue	$	24,939	$	(441	)	$	24,498
Labor and Related Expenses	$	5,482	$	(409	)	$	5,073
Other Operating Expenses	$	4,575	$	(32	)	$	4,543
Total Operating Expenses	$	24,832	$	(441	)	$	24,391


Revised Consolidated Statement of Operations Data for the six months ended June 30, 2019 (Unaudited)	As Reported		Adjustment			As Revised
Restaurant Sales	$	11,977	$	(294	)	$	11,683
Total Revenue	$	17,518	$	(294	)	$	17,224
Labor and Related Expenses	$	3,880	$	(294	)	$	3,586
Total Operating Expenses	$	15,021	$	(294	)	$	14,727



Revised Consolidated Statement of Operations Data for the nine months ended September 30, 2019 (Unaudited)

Restaurant Sales	$	17,641	$	(477	)	$	17,164
Total Revenue	$	25,336	$	(477	)	$	24,859
Labor and Related Expenses	$	5,784	$	(477	)	$	5,307
Total Operating Expenses	$	23,181	$	(477	)	$	22,704



Revised Consolidated Statement of Operations Data for the year ended December 31, 2019
Restaurant Sales	$	23,855	$	(672	)	$	23,183
Total Revenue	$	34,227	$	(672	)	$	33,555
Labor and Related Expenses	$	7,839	$	(672	)	$	7,167
Total Operating Expenses	$	31,178	$	(672	)	$	30,506

Summary of Revenue Recognized

Revenue recognized during the Successor period from December 16, 2020 to December 31, 2020 and for the Predecessor period from January 1, 2020 to December 15, 2020 and the twelve-month period ended December 31, 2019 disaggregated by type is as follows:


	Successor		Predecessor
	December 16, 2020 through December 31, 2020		January 1, 2020 through December 15, 2020		Year Ended December 31, 2019
Restaurant sales	$	1,326	$	23,139	$	22,473
BF Commissary sales		24		827		710
Franchising revenue:
Sales-based royalties		255		5,366		6,805
Rebate royalties		—		750		564
Brand development and advertising co-op royalties		74		1,441		1,720
Initial franchise fees		17		272		254
Initial distinct services		8		90		204
Other revenue - terminations of franchises		—		693		825

Total revenue	$	1,704	$	32,578	$	33,555

Summary of Revenue Disaggregated According to Timing of Transfer of Goods or Services

The following table shows the Company’s revenue disaggregated according to the timing of transfer of goods or services:


	Successor		Predecessor
	December 16, 2020 through December 31, 2020		January 1, 2020 through December 15, 2020		Year Ended December 31, 2019
Revenue recognized at a point in time
Restaurant revenue	$	1,326	$	23,139	$	22,473
BF Commissary sales		24		827		710
Royalty and other fees		255		6,116		7,369
Terminated franchise fees		—		693		825
Brand development and advertising co-op royalties		74		1,441		1,720
Franchising revenue – distinct initial services		8		90		204

Total revenue recognized at a point in time	$	1,687	$	32,306	$	33,301

Revenue recognized over time
Franchising fees		17		272		254

Total revenue recognized over time		17		272		254

Total Revenue	$	1,704	$	32,578	$	33,555

Summary of Contract Balances

Opening and closing balances of contract liabilities and receivables from contracts with customers for the years ended December 31, 2020 and 2019 are as follows (in thousands):


	Successor 2020		Predecessor 2019
Franchising receivables	$	480	$	369
Advertising co-op funds		—		159
Gift card liability		430		586
Deferred revenue, current		490		438
Deferred revenue, long-term		2,816		4,250

Summary of Franchise Revenue

Revenue recognized during the period ended which were included in the balance of deferred franchise revenue at the beginning of the period are as follow:


	Successor		Predecessor
	December 16, 2020 through December 31, 2020		January 1, 2020 through December 15, 2020		Year Ended December 31, 2019
Franchise Fees	$	41	$	1,023	$	1,283

Analysis of Deferred Revenue

An analysis of deferred revenue is as follows:


	Successor December 31, 2020			Predecessor December 15, 2020			Predecessor December 31, 2019
Balance, beginning of period	$	3,053		$	4,688		$	3,935
Initial franchise fees received		278			413			2,036
Revenue recognized for stores opened during period		(25	)		(362	)		(458	)
Revenue recognized related to franchise agreement Default		—			(693	)		(825	)

Balance, end of period	$	3,306		$	4,046		$	4,688