Sometimes SEC filings can create enough confusion that intelligent traders who scan these reports for key phrases can jump on a penny stock and bank big from their insight. Such is the case with Big Three Restaurants Inc. (BTHR) whose share structure is so small, they are worth a “Zinger” or two for someone who can see it. After some negativity due to the sale of virtually all their assets during the course of the last 12 months, BTHR stock jumped big on a simple update to clarify their “shell company” status and could rise even further.
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BTHR Stock Chart
Market Cap: Less than 218.44K
Close: 0.005, up 0.0027 (117.39%)
Dollar Volume: $41,622
Average Trade Size: 61,372
Issued and Outstanding: Less than 43.69M
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On Wednesday, the Company clarified statements made the week prior when they informed the world that, “as of 5:00 p.m. Eastern time, November 15, 2012, we do not have any operations. ” Within the 8-K (see here) was one particular line item which caused confusion:
Section 5.06 -Change in Shell Company Status.
“Until we acquire a business or other assets, we may be deemed to be a “shell company”, as defined in the federal securities laws.”
This came about when Big Three Restaurants essentially terminated their deal with Vasaturo Holdings LLC and returned the shares purchased back to both Bobby V’s Original Westshore Pizza, LLC and Philly Westshore Franchising Enterprises, Inc. since they were not willing to unwilling to further extend the maturity dates of the notes and took back their stock.
While the Company controlled the acquisitions, since August 22, 2011, each as a wholly owned subsidiary, Big Three restaurants did state in their NT10-K that they expected to result in an increase in revenues of $1,883,142, an increase in expenses of $2,077,218 and a decrease in net profit of $194,076 (unaudited). They sold their pasta sauce and salsa business on May 8, 2012 which is also expected to be reflected as a gain on discontinued operations of $195,723.
The biggest problem they have really is their general and administrative expenses: $670,918 and $2,119,486 for the three and nine months ended February 29, 2012. With that under control, a net profit could have been achieved during those periods when the pasta sauce, salsa business, and also the pizza and sandwich sports bar located in Tampa, Florida, were all operational. Now, they appear to be headed away from all those and into some good ‘ol fashioned, special recipe fried chicken — times 9.
Three months ago (see here), Big Three Restaurants signed two investment banking agreements with a leading New York-based investment banking firm which was founded in 1925 to assist in sourcing capital. Under the first agreement, the investment banking firm will act as the Company’s exclusive placement agent and financial advisor in connection with acquisition financing of up to $10,000,000. The second agreement anticipates a public offering of $30,000,000 on a firm commitment basis which is subject to the Company’s successful acquisition of additional restaurant properties.
Coincidentally, Eco Ventures Group, Inc. (EVGI), a diversified alternative energy feedstock, transportation, heat & solar power production company with approximately 50 employees, issued PR nearly a month later with an identical description of its “investment banking” agreement. (see here)
So really, you have a Company that booked some solid revenues from some food related operations and is now staying in the region they know, in the same industry they know, to get some “finger-licking” love. In my books, John V. Whitman Jr. and the former Bella Petrella’s Holdings are doing it and that makes BTHR stock a real eye catcher and worth plucking a few Benjamins out of.
About BTHR Stock
Big Three Restaurants, Inc., on November 20, 2012, entered into a non-binding letter of intent to acquire a total of nine Kentucky Fried Chicken* franchise stores, including associated real estate, located in Florida and Georgia. *Kentucky Fried Chicken is a trademark of KFC Corporation. The definitive agreements and closings are subject to financing in an aggregate amount of $11,450,000.
Last 5 Trading Sessions:
Click here to view the SEC filings for BTHR.
Bottom Line: If 5 million out standing shares and a share price of 0.005 seems high for you for a penny stock that could acquire a KFC franchise, don’t watch BTHR. But if you multiply that by nine and consider these guys have been the restaurant/food industry already, and turned a nice gross profit doing it, then with nine Kentucky Fried Chickens on their menu, you best have BTHR stock on yours for some finger licking gains.
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