A Bermuda investment firm is planning to buy a majority stake in Good Times Restaurants Inc., according to a report in the Denver Business Journal.

Small Island Investments Ltd. (SII), which has offices in Boston, is set to acquire 51.4 percent of the fast-food chain's outstanding stock for $2.1 million, purchasing 4.2 million shares at 50 cents apiece.

The paper said that if the deal, which is subject to shareholder approval, goes through, SII will name four of the seven directors on Good Times' board.

Good Times said it plans to execute a reverse stock split after the deal closes, which is expected by the end of this month.

A Good Times announcement describes SII as "an affiliate of a company that owns and operates three restaurant brands operating in Canada and the United States generating approximately $75 million in revenues". The parent company was not named.

In a securities filing, Good Times said it will use the funds to refinance "certain prior obligations" and for working capital.

Good Times has been warned at least twice this year by the NASDAQ exchange that it is out of compliance with listing standards.

In the most recent warning, issued on August 18, the stock exchange told the company that it was not in compliance with a rule requiring it to maintain minimum stockholder equity of $2,500,000, or $35,000,000 market value of listed securities, or $500,000 of net income from continuing operations for the most recent fiscal year or two of the three most recent fiscal years.

Good Times was told to submit a plan by October 4 for meeting listing rules.

"This capital infusion along with improved operating results provides stability for the company, resources for longer term growth of Good Times, allows us to regain compliance for our continued NASDAQ Capital Market listing and creates the opportunity to partner with an investment group with deep experience in owning restaurants," Good Times president and CEO Boyd Hoback said in a statement on Wednesday.

Good Times says it currently has 49 company-operated and franchise outlets, mostly in Colorado.