BAB Inc (OTCMKTS:BABB) Stock In Focus After Announcing Cash Distribution

BAB Inc (OTCMKTS:BABB) on June 3, 2022, announced that the Board of Directors has declared a quarterly distribution of one cent per share, which will be payable on July 11, 2022, to shareholders.

Market Reaction

On Friday, BABB stock fell 2.24% to $0.87 with 26K shares, compared to its average volume of 5K shares. The stock moved within a range of $0.8701 – 0.8900 after opening trade at $0.89.

Key Details

The firm believes that it is likely that a part of the distribution, as well as future distributions, may be seen as the return of capital to shareholders. The rest of the portion of the Distributions will be treated as a dividend.

The part of the July 11, 2022, distribution, which would be treated as a dividend may not be assessed until next year, being subject to the firm’s earnings for tax purposes for the fiscal year ending November 30, 2022. The final assessment will be given to recipients of the Distributions on a tax information return in early 2023.

The company had announced financial results for quarter one ending February 28, 2022, earlier. For the previous quarter, the firm had revenues of $738,000 and a net income of $63,000. This was much higher compared to revenues of $723,000 and net income of $333,000 for the same quarter of the previous year. Earnings in quarter one of the previous year included debt forgiveness from the Payroll Protection Program loan received in 2020 of $228,000.

Traders Review

BABB stock is trading below the 20-Day and 50-Day Moving averages of $0.89 and $0.90 respectively. Moreover, the stock is trading below the 200-Day moving average of $0.80.

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