Bagger Dave’s to Pursue Strategic Alternatives

Rhea-AI Summary

BT Brands, Inc. and its affiliate, Bagger Dave’s Burger Tavern, Inc., plan to review strategic alternatives for the Bagger Dave’s public corporation and its six operating restaurant locations. The proposal includes changing the name of Bagger Dave’s, a reverse split of outstanding shares, and a potential equity offering registration statement. The company aims to uplist the shares to NASDAQ Markets or another exchange. CEO Gary Copperud noted that all six stores are in excellent locations, and the process of conversion to another concept is expected to begin later this year. BT Brands and Bagger Dave’s have retained Eastwalk Consultants, LLC, as an advisor in transitioning Bagger Dave’s to a growing listed corporation.

Insights

Market Research Analyst

The strategic review and potential restructuring of Bagger Dave's may signal an effort to revitalize the brand and improve financial performance. The consideration of a reverse stock split usually indicates a desire to increase the stock price, often to meet listing requirements on exchanges like NASDAQ, which could enhance the company's visibility and liquidity. However, reverse splits can also dilute shareholder value if not accompanied by genuine improvements in business fundamentals.

As for the name change and shift in business strategy, these moves suggest a rebranding effort that could attract new investors and customers if executed successfully. The physical condition of the restaurants and the prime locations are assets that could be leveraged in a conversion to a new concept, potentially increasing the value of the properties and the overall business.

The mention of retaining a PCAOB-registered audit firm indicates a commitment to transparency and could instill confidence in investors regarding the reliability of financial statements. A successful equity offering, coupled with an uplisting, could provide Bagger Dave's with the capital needed for growth and expansion.

Financial Analyst

The announcement of exploring strategic alternatives, including a potential equity offering and uplisting to a major exchange, could have significant financial implications for Bagger Dave's and BT Brands. Uplisting to a major exchange generally improves a company's stock's marketability and helps attract institutional investors. However, the costs associated with the process, such as increased regulatory requirements and higher scrutiny, must be weighed against the potential benefits.

An equity offering could provide necessary capital for the conversion of Bagger Dave's locations and the implementation of a new business strategy, but it could also result in shareholder dilution. Investors will be keen on the terms of the offering and the expected use of proceeds. The anticipated reverse stock split could be a strategic move to optimize the share structure in preparation for these corporate actions.

For current and potential investors, the success of these strategic changes will depend on the effectiveness of the new business strategy and the ability of management to execute the transition smoothly. The long-term impact on BT Brands' and Bagger Dave's financial health and stock performance will be closely monitored.

Legal Expert

The legal implications of a name change and reverse stock split are multifaceted, involving regulatory approvals and potential changes to shareholder agreements. The reverse stock split must be approved by shareholders and is subject to regulatory scrutiny to ensure fairness and transparency. Additionally, the process of uplisting to a national exchange like NASDAQ involves meeting specific financial and governance criteria, which may necessitate legal adjustments in corporate structure and compliance policies.

Retaining a PCAOB-registered audit firm is a proactive step towards ensuring that the financial statements meet the stringent requirements for an equity offering and uplisting. This move also demonstrates a commitment to adhering to high standards of financial reporting, which could mitigate legal risks and foster trust among stakeholders.

The legal team will play a crucial role in navigating the complex regulatory environment associated with these strategic changes, ensuring that all actions are in compliance with securities laws and that shareholder interests are protected throughout the process.

WEST FARGO, N.D.--(BUSINESS WIRE)-- BT Brands, Inc. (Nasdaq: BTBD and BTBDW), and its 39.6 percent owned affiliate, Bagger Dave’s Burger Tavern, Inc. (OTCMarkets: BDVB), today announced plans to review strategic alternatives for the Bagger Dave’s public corporation and the six Bagger Dave’s operating restaurant locations. As part of this review, it is anticipated that a proposal will be made to Bagger Dave’s shareholders to change the name of Bagger Dave’s to align the name appropriately with a new business strategy. We anticipate proposing to shareholders a reverse split of Bagger Dave’s outstanding shares, and plan to retain a PCAOB-registered audit firm to review the Bagger Dave’s financial statements audited for inclusion in a potential equity offering registration statement, which would coincide with an uplisting of the shares to NASDAQ Markets or another exchange.

Bagger Dave’s opened its first location In Berkley, Michigan, in 2008 and grew to over 25 units in three states; there are currently six Bagger Dave’s restaurants, including four in Michigan and single units in Ft. Wayne, Indiana, and Centerville, Ohio. Commenting on Bagger Dave’s, CEO Gary Copperud noted, “All six stores are in excellent locations representing an original investment of more than $5 million. The stores range from 4,000 to 6,000 square feet, carry full liquor licenses, and are in excellent physical condition. We have had several restaurant professionals look at the locations over the last year, and all agree the units provide an outstanding footprint for a conversion opportunity. The Bagger Dave’s locations will continue normal operations as Bagger Daves, with the process of conversion to another concept expected to begin sometime later this year. We look forward to identifying a dynamic growth opportunity, providing potential career growth for all current employees of Bagger Dave’s. We see the opportunity for Bagger Dave’s shareholders, including BT Brands, to earn significant returns from a successful conversion.

BT Brands and Bagger Dave’s have retained Eastwalk Consultants, LLC, as an advisor in transitioning Bagger Dave’s to a growing listed corporation.

About BT Brands Inc.: BT Brands, Inc. (BTBD and BTBDW) owns and operates a fast-food restaurant chain called Burger Time with locations in North and South Dakota and Minnesota and Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts, the Village Bier Garten in Cocoa, Florida, and Keegan’s Seafood Grille near Clearwater, Florida. BT Brands is seeking acquisitions within the restaurant industry.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding guidance relating to net income and net income per share, expected operating results, such as revenue growth and earnings, anticipated levels of capital expenditures for the 2023 fiscal year, current or future volatility in the credit markets and future market conditions, our belief that we have sufficient liquidity to fund our business operations during the next fiscal year, market position, financial results and reserves, and strategy for risk management.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the disruption to our business from public health emergencies, the impact on our results of operations, and our financial condition; the uncertain nature of the restaurant industry; our ability to integrate acquired restaurants, delays in developing and opening new restaurants because of weather, local permitting or other reasons, increased competition, cost increases or shortages in raw food products, staffing shortages and the effect of inflation on key supplies and inputs.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

BT BRANDS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
		39 Weeks Ended			39 Weeks Ended,			13 Weeks Ended,			13 Weeks Ended,
		October 1, 2023			October 2, 2022			October 1, 2023			October 2, 2022
SALES	$	11,078,419		$	9,621,996		$	4,007,656		$	4,023,920
COSTS AND EXPENSES
Restaurant operating expenses
Food and paper costs		4,348,294			3,637,814			1,449,796			1,604,858
Labor costs		4,124,857			3,122,867			1,509,721			1,336,039
Occupancy costs		845,863			803,792			340,002			367,872
Other operating expenses		603,964			577,035			209,721			248,383
Depreciation and amortization		470,801			351,084			114,774			168,855
General and administrative		1,288,019			1,035,639			343,027			288,921
Gain on sale of assets		(313,688)			-			-			-
Total costs and expenses		11,368,110			9,528,231			3,967,042			4,014,928
Income (loss) from operations		(289,691)			93,765			40,614			8,992
GAIN (LOSS) ON MARKETABLE SECURITIES		33,184			(155,220)			56,248			(74,982)
INTEREST AND OTHER INCOME		123,630			55,836			32,821			46,364
INTEREST EXPENSE		(73,857)			(88,099)			(23,948)			(33,638)
EQUITY NET LOSS OF AFFILIATE		(254,272)			(135,813)			(109,222)			(121,641)
LOSS BEFORE TAXES		(461,006)			(229,531)			(3,486)			(174,905)
INCOME TAX BENEFIT		82,000			5,000			-			-
NET LOSS	$	(379,006)		$	(224,531)		$	(3,486)		$	(174,905)
NET LOSS PER COMMON SHARE -	$	(0.06)		$	(0.03)		$	(0.00)		$	(0.04)
WEIGHTED AVERAGE SHARES		6,257,652			6,459,223			6,246,118			6,461,118

BT BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
	(Unaudited)
	October 1, 2023				January 1, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,546,874		$	2,150,578
Marketable securities		1,366,973			5,994,295
Receivables		55,200			76,948
Inventory		192,991			158,351
Prepaid expenses and other current assets		37,445			37,397
Assets held for sale		258,751			446,524
Total current assets		7,458,234			8,864,093
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET		3,238,310			3,294,644
OPERATING LEASES RIGHT-OF-USE ASSETS		1,834,408			2,004,673
INVESTMENTS		1,115,615			1,369,186
DEFERRED INCOME TAXES		143,000			61,000
GOODWILL		671,220			671,220
INTANGIBLE ASSETS, NET		400,766			453,978
OTHER ASSETS, NET		49,627			50,903
Total assets	$	14,911,180		$	16,769,697
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	431,187		$	448,605
Broker margin loan					791,370
Current maturities of long-term debt		164,866			167,616
Current operating lease obligations		215,326			193,430
Accrued expenses		476,035			532,520
Total current liabilities		1,287,414			2,133,541
LONG-TERM DEBT, LESS CURRENT PORTION		2,332,014			2,658,477
NONCURRENT LEASE OBLIGATIONS		1,650,361			1,825,057
Total liabilities		5,269,789			6,617,075
SHAREHOLDERS' EQUITY
Common stock		12,492			12,792
Less cost of Treasury shares		(356,807)			(106,882)
Additional paid-in capital		11,527,235			11,409,235
Accumulated deficit		(1,541,529)			(1,162,523)
Total shareholders' equity		9,641,391			10,152,622
Total liabilities and shareholders' equity	$	14,911,180		$	16,769,697

Category: Financial Category

View source version on businesswire.com: https://www.businesswire.com/news/home/20240126639874/en/

KENNETH BRIMMER 612-229-8811

Source: BT Brands, Inc.

FAQ

What are the ticker symbols for BT Brands, Inc. and Bagger Dave’s Burger Tavern, Inc.?

The ticker symbols for BT Brands, Inc. are BTBD and BTBDW, while Bagger Dave’s Burger Tavern, Inc. is listed as BDVB on OTCMarkets.

What are the plans announced by BT Brands, Inc. and Bagger Dave’s Burger Tavern, Inc.?

They announced plans to review strategic alternatives for the Bagger Dave’s public corporation and its six operating restaurant locations, including changing the name of Bagger Dave’s, a reverse split of outstanding shares, and a potential equity offering registration statement.

What is the role of Eastwalk Consultants, LLC in the transition of Bagger Dave’s?

BT Brands and Bagger Dave’s have retained Eastwalk Consultants, LLC, as an advisor in transitioning Bagger Dave’s to a growing listed corporation.

What did CEO Gary Copperud mention about the Bagger Dave’s locations?

CEO Gary Copperud noted that all six stores are in excellent locations, representing an original investment of more than $5 million. The stores range from 4,000 to 6,000 square feet, carry full liquor licenses, and are in excellent physical condition. The process of conversion to another concept is expected to begin later this year.