BurgerFi International has entered into a new Emergency Protective Advance Agreement to obtain $2.5 million in funding from Trew Capital Management Private Credit 2 LLC. The agreement was disclosed in an 8-K filing with the Securities and Exchange Commission on August 9.
According to the filing, BurgerFi must submit one or more letters of intent representing transactions that will fully satisfy the company’s obligations under its credit agreement by August 28. The agreement stipulates that each letter of intent must be executed within seven days of receipt, and the closing of the definitive agreement must occur within 60 days of that period.
This financing agreement comes shortly after BurgerFi settled a lawsuit with Lion Point Capital LP. Lion Point Capital LP claims the company lost more than $26 million because BurgerFi failed to register shares on time during its 2020 IPO. The settlement was finalized on July 23, with BurgerFi agreeing to pay Lion Point $1.35 million and issue 300,000 shares.
In May, BurgerFi announced it had entered into a forbearance agreement with its lenders while also beginning a “strategic review process” to address ongoing financial challenges. According to recent Technomic data, BurgerFi’s revenues fell 7.5% from 2022 to 2023 and its store count fell 5.3% year-over-year, with six underperforming stores closed. In comparison, the rest of the fast-casual burger sector has been on an upward trajectory, with average revenue growth of 8%.
Following the acquisition of Anthony’s Coal Fired Pizza in October 2021, the company’s revenues have stagnated rather than grown and have been declining since their peak in 2021, according to Technomic data. Earlier this year, it underwent a CEO change, now led by former Smashburger President Carl Bachmann.
Contact Alicia Kelso at (email protected)
