BurgerFi International has entered into a new Emergency Protective Advance Agreement to receive $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 Aug. 9.
According to the filing, BurgerFi must present one or more letters of intent by Aug. 28 illustrating transactions that will settle the company’s obligations under its credit agreement in full. The agreement requires that each LOI must be executed within seven days after receipt and the closing of the definitive agreement must occur within 60 days of that timeframe.
This funding agreement comes shortly after BurgerFi settled a lawsuit with Lion Point Capital LP, which alleged it lost more than $26 million because BurgerFi failed to register shares in a timely manner when it went public in 2020. The settlement was finalized July 23 in which BurgerFi agreed to pay Lion Point $1.35 million and issue 300,000 shares.
In May, BurgerFi announced its entry into a forbearance agreement with its lenders while initiating a “strategic review process” to address continued fiscal challenges. According to recent Technomic data, BurgerFi’s sales were down 7.5% from 2022 to 2023, and its unit counts were down 5.3% year-over-year, with a closure of six underperforming stores. Comparatively, the rest of the fast-casual burger sector has been on an upward growth trajectory, with average sales growth of 8%.
After acquiring Anthony’s Coal Fired Pizza in October 2021, the company’s sales stagnated rather than grew, and have been on a downward trajectory since its peak in 2021, according to Technomic data. Earlier this year, the company underwent a CEO change, with former Smashburger president Carl Bachmann now leading the company.
Contact Alicia Kelso at [email protected]
