btbd_10k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 28, 2025
Commission file number: 001-41061.
BT BRANDS, INC.
(Exact name of registrant as specified in its charter)
(Address of registrant’s principal executive offices) (Zip Code)
Securities registered under Section 12(b) of the Exchange Act
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, $0.002 par value BTBD The NASDAQ Stock Market LLC
Warrant to Purchase Common Stock BTBDW The NASDAQ Stock Market LLC
Registrant’s telephone number, including area code: (307) 274-3055
Securities registered under Section 12(g) of the Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 17(a)(2)(B) of the Securities Act. ☐
Indicate by check mark whether the registrant has filed a report on an attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.70D-1(b). ☐
As of June 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was $8,185,783.
At March 27, 2026, there were 6,154,724 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART I
Item 1. Business 4
Item 1A. Risk Factors 12
Item 1B. Unresolved Staff Comments 20
Item 1C. Cybersecurity 20
Item 2. Properties 22
Item 3. Legal Proceedings 23
Item 4. Mine Safety Disclosures 23
Item 6. Reserved 26
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35
Item 8. Financial Statements and Supplementary Data 35
Item 9A. Evaluation of Disclosure Controls and Procedures 59
Item 9B. Other Information 60
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 60
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 60
Item 11. Executive Compensation 65
Item 14. Principal Accounting Fees and Services 73
PART IV
Item 15. Exhibits, Financial Statement Schedules 74
SIGNATURES 76
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BASIS OF PRESENTATION
Our fiscal year is 52 or 53 weeks, ending on the Sunday closest to December 31. Most years comprise four 13-week quarters, totaling 52 weeks. Fiscal 2025 was the 52 weeks ending on December 28, 2025, and fiscal 2024 was the 52 weeks ending December 29, 2024. All references to years in this Annual Report on Form 10-K (“Annual Report”) refer to the fiscal years described above.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and may be identified by words such as “anticipate,” “believe,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” “estimate,” “continue,” and similar expressions.
Forward-looking statements in this Annual Report include, among others, statements regarding our business strategy, growth plans, operating and financial performance, liquidity and capital resources, capital expenditures, acquisitions and other strategic transactions, pricing strategies, labor availability and costs, food, commodity, and energy costs, supply chain conditions, competition, consumer demand and preferences, seasonality, public health matters, regulatory and legal matters, cybersecurity risks, weather-related events (including hurricanes), and general economic conditions.
This Annual Report also includes forward-looking statements regarding our proposed business combination with Aero Velocity Inc. (the “Aero Transaction”) and the contemplated spin-off of our restaurant operations and related assets into a newly formed entity, BT Group, Inc. These statements include, among others, statements regarding the anticipated timing, structure, benefits, risks, completion, and post-transaction operations, as well as the expected capital structure, ownership, governance, and strategic focus of the combined company and the expected separation and ongoing operations of BT Group, Inc. The Aero Transaction, if completed, is expected to result in substantial dilution to our existing stockholders and a significant shift in voting power and control.
Forward-looking statements are based on our current expectations, estimates, assumptions, and beliefs as of the date of this Annual Report and are subject to significant risks, uncertainties, and other factors, many of which are beyond our control, that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include, but are not limited to: the risk that the Aero Transaction or the contemplated spin-off may not be completed on the anticipated terms or timeline, or at all; the failure to obtain required stockholder, regulatory, or exchange approvals; the occurrence of events that may give rise to termination of the merger agreement; the ability to satisfy closing conditions; the ability to obtain financing on acceptable terms or at all; the ability to realize anticipated benefits of the Aero Transaction or the spin-off; the risks associated with integrating or operating a business outside the restaurant sector; risks related to the expected ownership, governance, and voting control structure of the combined company; risks related to the separation of assets and liabilities and the standalone viability of BT Group, Inc.; and risks related to our restaurant operations, including labor shortages and wage inflation, increases in food, commodity, and energy costs, supply chain disruptions, food safety and public health concerns, adverse weather events and natural disasters, cybersecurity incidents, changes in consumer preferences and discretionary spending, and intense competition in the restaurant industry.
Additional information regarding these and other risks is included under Item 1A, “Risk Factors,” and elsewhere in this Annual Report.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. Except as required by law, we disclaim any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or otherwise.
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PART I
Item 1. Business.
In this Annual Report, and unless otherwise indicated, the terms “BT Brands,” the “Company,” “we,” “us,” “our,” “our Company,” and “our business” refer to BT Brands, Inc. together with its consolidated subsidiaries.
The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. Due to rounding, figures in tables may not sum exactly.
Overview of Our Company
As of December 28, 2025, we owned and operated nine restaurants across multiple states in the Midwest, Massachusetts, and Florida, and held a minority ownership interest in an unconsolidated affiliate that operated an additional five restaurants, for a total of 14 operating restaurant locations. Operating restaurants comprise:
In addition, we own a 40.7% interest in Bagger Dave’s Burger Tavern, Inc. (“BDVB”), an unconsolidated affiliate operating five casual-dining restaurants in Michigan, Ohio, and Indiana. We do not own a controlling interest in BDVB, but we exercise significant influence over its operating and financial policies; we account for BDVB under the equity method.
Village Bier Garten, a German-themed restaurant, bar, and entertainment venue located in Cocoa, Florida, ceased operations and was permanently closed in January 2025.
We operate our businesses under a centralized management structure. By leveraging our shared management services platform, we aim to drive company-wide efficiencies, including reducing corporate overhead across existing and acquired operations.
Historically, our objective has been to create long-term shareholder value in the food service industry. Our core strategy has focused on acquiring restaurant properties and operating businesses at attractive valuation multiples, enabling diversification across restaurant concepts and geographic markets while reducing reliance on any single brand or location. Additional elements of our strategy have included driving same-store sales growth, improving cost efficiency, and enhancing brand awareness.
In 2025, we began actively evaluating business opportunities outside the food service sector. On September 2, 2025, we entered into an agreement to pursue a proposed business combination with Aero Velocity Inc., a private company that designs and manufactures American-made unmanned aerial vehicles and operates a Drones-as-a-Service business. If the proposed transaction is completed, we currently expect to spin off our restaurant operations and related assets into a newly formed entity, BT Group, Inc., following the merger closing.
The proposed business combination and related spin-off remain subject to numerous conditions, including stockholder and regulatory approvals, and there can be no assurance that either transaction will be completed on the anticipated terms, timeline, or at all.
Our Corporate History
The Company was incorporated in Delaware as Hartmax of NY, Inc. in January 2016. In 2020, we changed our corporate domicile to Wyoming.
The Burger Time brand originated in August 1987 with the opening of its first restaurant in Fargo, North Dakota. In subsequent years, Burger Time restaurants were both open and closed in Minnesota, North Dakota, and South Dakota.
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On November 12, 2021, we completed an initial public offering of 2,400,000 units of our securities at a public offering price of $5.00 per unit, each unit comprising one share of common stock and one warrant to purchase one share of common stock at an initial exercise price of $5.50 per share (the “IPO”). The net proceeds from the IPO were approximately $10.7 million, after deducting underwriting discounts and commissions, excluding proceeds from the exercise of warrants.
Proposed Business Combination with Aero Velocity
On September 2, 2025, BT Brands entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aero Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of BT Brands (“Merger Sub”), and Aero Velocity Inc., a Delaware corporation (“Aero”). Pursuant to the Merger Agreement, Aero will merge with and into Merger Sub, with Aero continuing as the surviving corporation (the “Merger”). Following the Merger, the combined company (the “Merged Company”) is expected to focus primarily on Aero’s unmanned aerial vehicle manufacturing and Drones-as-a-Service operations.
The Merger Agreement contemplates, prior to the closing of the Merger, a spin-off of our existing restaurant operations and related assets and liabilities into a newly formed subsidiary, BT Group, Inc. (“BT Group”). The spin-off shares will be distributed to pre-merger holders of BT Brands common stock and is not expected to qualify as a tax-free transaction for U.S. federal income tax purposes, and stockholders may incur taxable income in connection with the distribution of BT Group shares.
Upon completion of the Merger, Aero stockholders are expected to receive Series A-1 and Series A-2 Convertible Preferred Stock of the Merged Company, with a stated value of $101,100,000, convertible into common stock at $1.48 per share. The Series A-1 Preferred Stock will carry a 50-to-1 voting preference on an as-converted basis. Collectively, the Series A-1 and Series A-2 Preferred Stock are expected to represent approximately 89% of the equity ownership of the Merged Company on an as-converted basis. As a result, existing BT Brands stockholders, together with our financial advisor, Maxim Group, are expected to retain approximately 11% of the equity ownership of the Merged Company and will experience substantial dilution and a significant shift in voting power and control.
In addition, concurrently with the closing of the Merger, Aero stockholders or their designees are expected to invest $3 million, and up to a maximum of $5 million, in newly authorized Series B Convertible Preferred Stock of the Company.
The completion of the Merger and the contemplated spin-off are subject to numerous conditions, including stockholder approval, regulatory approvals, and satisfaction of other closing conditions. There can be no assurance that the Merger or the spin-off will be completed on the anticipated terms, within the anticipated timeframe, or at all. See “Risk Factors—Risks Related to the Proposed Business Combination” in Item 1A of this Annual Report.
For additional information regarding the proposed Merger, see our Current Report on Form 8-K filed on December 1, 2025, available at www.sec.gov.
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Our Restaurants
Burger Time
Burger Time restaurants offer a variety of burgers and other quick-service items. Our juicy, flame-broiled burgers, called “Bigger Burgers,” are larger in diameter than typical quarter-pound burger offerings. Our supplier produces our burger patties to our specifications. We prepare each burger according to the customer’s order and serve it hot and fresh. Other menu offerings include chicken sandwiches and chicken tenders. We offer a range of traditional and signature sides, many of which are regional favorites, along with other reasonably priced food and beverage items. From time to time, we offer specialty sandwiches and wraps at competitive prices. Our limited menu is designed to deliver quality across all products, combining a high taste profile and speedy delivery. Our Burger Time brand appeals to a broad spectrum of consumers. We serve customers who appreciate the size and variety of our burgers, the value of our Bigger Burger, and the speed and efficiency of our single and double-drive-thru windows. Subject to seasonal and local conditions, our restaurants are generally open seven days a week from 10 a.m. until 9 or 10 p.m. We offer online ordering through our website with curbside delivery and have initiated sales through third-party delivery services. Burger Time serves the drive-thru and take-out segment of the restaurant industry.
We own six operating Burger Time restaurants in Minnesota, North Dakota, and South Dakota. We own a closed Burger Time property in Ham Lake, Minnesota, which is currently reflected as held for sale. In July 2025, we ceased operating Burger Time in Minot, North Dakota. The Minot property is now leased to a third party. We own all of the BTND real estate.
Our Burger Time units are free-standing facilities with single or double “drive-thru” and walk-up service windows. The menu, store layout, and equipment are designed to work together to deliver exceptional food with fast service. This integrated design allows for maximum food output with minimal labor.
Each restaurant typically employs eight to sixteen employees, including a manager and an assistant manager. Work shifts are staggered to ensure superior customer service during our busiest times. We focus on customer service and quality and seek to staff our stores with friendly, customer-focused personnel. Our managers and assistant managers are full-time employees. We support our managers by offering competitive wages, including performance-based incentive bonuses. Our experienced managers train new assistant managers in all aspects of operations. Our training emphasizes food quality, fast, friendly customer service, restaurant cleanliness, and proper management operations for a quick-service restaurant. We also focus on training our employees and monitoring compliance with food safety and sanitation standards, employment laws and regulations, and systems for controlling food and labor costs. All managers and assistant managers must obtain the required food safety (HACCP) certification applicable to their location.
Each restaurant has a point-of-sale (POS) system monitored by management. In 2025, we implemented a cloud-based POS in all Burger Time locations, enhancing our ability to monitor store operations. This system enables management to monitor sales, labor, customer counts, and other key metrics. The general manager of each restaurant reports directly to the Director of Operations, who, in turn, reports to our Chief Operating Officer, who oversees all aspects of restaurant operations, including facility management, new restaurant openings, and the rollout of key operational initiatives. Our restaurants are managed using weekly operating budgets, with actual results compared to planned results and to those from the prior year.
We utilize various suppliers for our restaurants. Since July 2024, Performance Food Group, a leading national distributor, has served as the primary vendor for most food, paper, packaging, and supplies for our Burger Time restaurants. Performance Food Group delivers to our Burger Time restaurants on a regular schedule.
As of February 1, 2026, Burger Time restaurants employed approximately 81 employees, including 17 full-time and 64 part-time. Our full-time employees are salaried managers and assistant managers; the remaining restaurant staff are hourly employees.
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Keegan’s Seafood Grille
On March 2, 2022, we acquired substantially all the assets of Keegan’s Seafood Grille, Inc. (“Keegan’s”), including its trademark and website, an operating restaurant located in Indian Rocks Beach, Florida, for $1,150,000. Keegan’s Seafood Grille has operated in the same location for over 35 years, serving the Clearwater, Florida market. In November 2024, operations at Keegan’s were disrupted for approximately six weeks by Hurricane Helene, which caused significant damage to the Indian Rocks Beach community. Keegan’s was closed for approximately 1 month for cleanup and restoration, and we replaced approximately $80,000 worth of equipment.
Keegan’s is a family-friendly, casual restaurant situated directly across from the beach. The restaurant’s award-winning dishes are prepared in-house with the freshest local ingredients. Keegan’s motto is “Eat Fresh and Eat Wild.” It is known for daily fish specials, inventive seafood dishes, and excellent service. Keegan’s also offers a selection of beer and wine. The restaurant has indoor and outdoor seating, is open daily for lunch and dinner, and provides takeout and curbside pickup.
As of February 1, 2026, Keegan’s employed 33 people, including two full-time and 31 part-time employees. Our employees include a full-time salaried manager and a salaried kitchen manager; the remaining restaurant staff are hourly employees.
Pie In The Sky Coffee and Bakery
On May 11, 2022, we acquired the assets of Pie In The Sky Coffee and Bakery (“PIE”), a coffee shop and bakery restaurant located near the Steamship Authority ferry terminal in Woods Hole, Massachusetts. We purchased the PIE assets for $1,150,000, including the “Pie In The Sky” trade name and the piecoffee.com web address.
PIE has served the local community and ferry travelers to Martha’s Vineyard for nearly forty years. PIE offers a variety of breakfast and lunch sandwiches made on store-baked bread; pastries, soups, and salads are all freshly prepared on-site. We also offer freshly roasted coffee, smoothies, and branded merchandise. The store is open seven days a week, year-round, except for Christmas.
As of February 1, 2026, PIE employed 23 people, including three full-time and 20 part-time employees. Our full-time team includes three managers, one dedicated to coffee roasting operations, two assistant managers, and a varying number of hourly staff.
Schnitzel Haus
On May 13, 2024, we acquired the assets of Schnitzel Haus, including the trade name and a German-themed fine dining restaurant and bar in Hobe Sound, Florida (“Schnitzel”). Schnitzel has served the local community for over 10 years. Schnitzel offers a variety of traditional German and American menu items, along with wine, beer, and cocktails, in an elegant, upscale setting. Schnitzel is open year-round, Monday through Saturday.
As of February 1, 2026, Schnitzel employed 28 people, including two full-time and 26 part-time workers. Our staff includes a full-time salaried manager and a salaried kitchen manager; the rest of the restaurant team are hourly employees.
Village Bier Garten
On August 4, 2022, we acquired the assets of Von Stephan Village Bier Garten. Village Bier Garten (“VBG”) was a German-themed, family-friendly casual restaurant and bar concept in Cocoa, Florida. Effective January 2, 2025, we closed the VBG location, sold certain equipment for $34,500 and assigned the lease to an unrelated party. See Note 5 for discussion of the VBG lease.
Bagger Dave’s Burger Tavern
In June 2022, we acquired a minority ownership position in the common stock of Bagger Dave’s Burger Tavern, Inc. (“BDVB”), currently representing 40.7% ownership. BDVB is a publicly traded company that owns and operates five Bagger Dave’s restaurants. Bagger Dave’s is a casual restaurant-and-bar concept. BDVB opened its first location in Berkley, Michigan, in January 2008 and currently operates three restaurants in Michigan, one in Fort Wayne, Indiana, and one in Centerville, Ohio. BDVB has approximately 130 employees, including 20 salaried managers, 30 full-time, and 70 part-time employees. Because we do not control BDVB but are able to exercise significant influence over its operating and financial policies, we account for our investment in BDVB under the equity method of accounting. Under the equity method, our investment in BDVB is recorded on our consolidated balance sheets as an equity method investment, and our proportionate share of BDVB’s net income or loss is recorded in our consolidated statements of operations as equity income (loss) from unconsolidated affiliate. Dividends received from BDVB, if any, reduce the carrying value of our investment. Due to BDVB’s historical operating losses, our cumulative share of losses has reduced the carrying value of our equity method investment in BDVB to zero as of December 28, 2025. Accordingly, we have ceased recognizing additional equity losses related to this investment, except to the extent we have committed to providing additional financial support or have guaranteed obligations of BDVB, which we have not.
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Hot-N-Now Trademark
Effective October 9, 2024, we completed the sale of a trademark asset. The Hot-N-Now trademark, which had no carrying value, was sold for an upfront cash payment of $250,000, plus contingent payments of up to $150,000, payable at $10,000 per unit for each Hot-N-Now restaurant location the purchaser opens.
A gain of $250,000 on the sale of the trademark was recognized during fiscal 2024. During fiscal 2025, we also received a $10,000 licensing payment related to the trademark.
Marketing and Advertising
Our marketing and advertising activities primarily focus on digital and social media platforms, supplemented by limited advertising in newspapers and on the radio. From time to time, we also utilize promotional discounts, customer contests, live remote broadcasts, and direct mail campaigns. In addition, we seek to take advantage of marketing incentives offered by our suppliers when available.
Our restaurants offer online ordering and curbside pickup through their respective websites, and we utilize direct database marketing, supported by social media tools, to promote our brands and individual locations. Historically, our marketing and advertising expenditures have represented a relatively small percentage of net revenues. A significant portion of our restaurant sales is derived from drive-by traffic and repeat visits by returning customers. As a result, increases in restaurant revenues may require incremental investment in marketing and advertising.
We expect to continue evaluating and refining our marketing strategies and may develop more sophisticated programs, including an expanded digital and social media presence, to enhance consumer awareness of our restaurant brands and drive traffic to our locations.
Growth Strategy
Our objective is to increase shareholder value through disciplined acquisitions, operational efficiencies, and strategic capital allocation. Historically, our strategic focus has been on the restaurant sector, where we have pursued acquisitions at valuations we believe offered attractive risk-adjusted returns. The Company is an operating business and is not a blank-check, shell, or blind-pool company.
While we continue to evaluate opportunities in the restaurant industry, we are also assessing potential growth strategies beyond the food service sector. Management may review opportunities in other industries that align with our investment criteria, including businesses with stable or predictable cash flows, scalable operating models, and defensible market positions. No assurance can be given that any such opportunities will be identified, pursued, or completed.
As previously disclosed, the Company has entered into an agreement to pursue a business combination with Aero Velocity Inc., a private company that designs and manufactures unmanned aerial vehicles and provides drone-related services. The proposed transaction remains subject to various closing conditions, and there is no assurance that it will be completed on the anticipated terms, or at all. If the transaction is completed, the Company intends to spin off its restaurant and other operating assets into a newly formed entity, BT Group, Inc. Accordingly, the growth strategies described in this section reflect management’s current thinking with respect to the restaurant and related businesses that would be operated by BT Group, assuming the Aero Velocity transaction and related spin-off are consummated.
Within our existing restaurant operations, our growth initiatives include increasing same-store sales, enhancing brand awareness, improving operating margins, and improving cash flow. Our tactics to achieve our objectives include evaluating menu offerings and promotional strategies, informed by customer feedback and market data. These initiatives are expected to evolve as market conditions change and as we evaluate future acquisitions.
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Strategic Transactions
We may evaluate strategic transactions, including mergers, acquisitions, asset purchases, and other business combinations, as part of our broader growth strategy. Such transactions may involve businesses within or outside the restaurant sector and may take various forms depending on the specific opportunity.
In evaluating potential strategic transactions, we consider a range of factors, including the target’s financial condition, operating performance, scalability, market position, strategic fit, and the experience of its management team. Any transaction would be subject to internal evaluation, approval by our board of directors, and compliance with applicable legal, regulatory, and exchange listing requirements.
In limited circumstances, we may consider transactions involving private operating companies seeking access to the public markets through a business combination. Such transactions are not part of our core strategy and would be pursued only if management and our board determined that they are consistent with our long-term objectives and shareholder interests. As noted above, the proposed Aero Velocity transaction is one such transaction. There can be no assurance that any strategic transaction will be identified, pursued, or completed.
Restaurant Industry Acquisitions
We continue to review our acquisition strategy in the restaurant industry. Acquisitions might provide access to specific restaurant concepts, geographic areas, or operational platforms. We may buy individual restaurant properties or multi-unit restaurant businesses that we believe will generate attractive returns. We might also consider acquisitions where franchise or brand development is a primary focus of the acquired business.
In evaluating opportunities, we consider the following characteristics, among others, relevant to each opportunity:
· established, recognized brands within a geographic footprint;
· a historical record of consistent and growing cash flow;
· record of operating performance;
· sustainable operating results;
· geographic diversification: and
· growth potential.
We operate our restaurant businesses with a shared central management organization. Following an acquisition, we may pursue a plan to expand our location count and increase comparable store sales and profits, as described below. By leveraging our management services platform, we aim to deliver post-acquisition cost savings by reducing the acquired business’s corporate overhead. If we acquire restaurant chains or individual units located near one another, concentration could provide economic leverage for our management functions, marketing, advertising, supply chain support, staff training, and operational oversight.
Increase Sales
Our primary goal is to increase sales across our restaurant operations to optimize performance. One of the metrics we use to measure sales growth is same-store sales growth, which reflects year-over-year sales for the comparable store base. We apply techniques proven in the restaurant industry to increase same-store sales at all our restaurants. We may also develop new approaches that reflect our corporate character and restaurant composition. We use customer feedback and sales data to introduce, test, and refine existing and new menu items. Our strategies to increase same-store sales will evolve as we acquire new restaurant concepts in new markets.
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Brand Awareness
Increasing brand awareness is essential to our Company’s growth. We seek to develop and implement forward-looking branding strategies for our businesses. We utilize social media and target digital advertising to expand our reach and drive traffic to our stores. We expect our branding initiatives to continue to evolve.
Trademarks and Service Marks
We operate under several trade names and have acquired various trade and service marks. We have registered “It’s Burger Time” with the United States Patent and Trademark Office. Our trademarks and service marks, whether or not formally registered, are valuable to us and essential to our marketing efforts. We may develop additional marks in the future. Our policy is to pursue registration of our marks when appropriate and to oppose infringement vigorously.
Competition
We own restaurants in the industry’s quick-service, fast-casual, and both casual and upscale dining categories. The competitive environment in each category is intense across price, service, location, and food quality. We face significant competition from a variety of restaurants at the national, regional, and local levels. Dining options continue to expand as the popularity of food delivery services grows. The restaurant industry is affected by, among other factors, changes in consumer tastes, dietary trends, local and national economic conditions, demographics, consumer spending, population trends, and traffic patterns. The restaurant industry has few barriers to entry, and new competitors may emerge at any time.
In addition, to the extent we pursue acquisitions or strategic transactions—whether within or outside the restaurant industry—we may encounter risks that are difficult to predict, including our limited experience operating new or unfamiliar businesses, challenges integrating acquired operations, unanticipated operational or regulatory requirements, increased competition in new markets, the diversion of management attention, and the possibility that anticipated benefits of a transaction are not realized.
Seasonality
Seasonal factors and holiday timing cause our revenue to fluctuate from quarter to quarter. Our BTND revenue is typically lower in the first and fourth quarters because of winter weather. PIE is highly seasonal, with a significant portion of its business occurring during the summer. Our Florida locations reach peak revenue during the winter travel season.
Regulation and Compliance
Our operations are subject to a wide range of federal, state, and local government regulations, including those relating to public health and safety, zoning and fire codes, labor, and franchising. Our failure to obtain or maintain food or other licenses, registrations, or exemptions would adversely affect our restaurants’ operations. We operate each restaurant in accordance with applicable laws, codes, and regulations. To date, we have not experienced and do not anticipate any problems in obtaining required licenses, permits, or approvals; however, any difficulties, delays, or failures in obtaining such licenses, permits, registrations, exemptions, or permissions in the future could delay or prevent the opening of a location and adversely impact the viability of a restaurant.
The development and construction of new restaurants must comply with applicable zoning, land-use, and environmental regulations. Federal and state environmental regulations have not had a material effect on operations. However, more stringent and varied local government requirements regarding zoning, land use, and environmental factors could delay construction and increase development costs for any new restaurants we may pursue.
We are also subject to the Fair Labor Standards Act, the Immigration Reform and Control Act of 1986, and various federal and state laws governing minimum wages, overtime, unemployment tax rates, workers’ compensation rates, citizenship requirements, and other working conditions. Most of our hourly staff, except for BDVBs, “tip compensated” employees, who are covered by Michigan “tip-credit” rules, are paid above the applicable federal or state minimum wage. Accordingly, increases in the minimum wage are unlikely to significantly affect labor costs. We may also be subject to applicable laws and regulations governing future operations. We are also subject to the Americans with Disabilities Act, which prohibits discrimination based on disability in public accommodations and employment.
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States, counties, and cities have enacted menu-labeling laws requiring restaurant operators to disclose certain nutritional information to consumers or have enacted legislation restricting the use of certain ingredients in restaurants. Many of these requirements are inconsistent or interpreted differently across jurisdictions. These requirements may differ from or be inconsistent with the requirements under the Patient Protection and Affordable Care Act of 2010 (“ACA”), as amended, which establishes federal requirements applicable to chain restaurants with 20 or more locations to post nutritional information on their menus. In addition, the ACA requires employers with more than 50 full-time employees to offer health benefits to full-time employees and their dependents, or face penalties. The ACA imposes significant reporting requirements on restaurant businesses, including the requirement to certify whether they offer minimum essential coverage to full-time employees. The failure to comply with the ACA is substantial, and new regulations that increase coverage requirements and costs could adversely affect our business. We do not currently operate a franchise program.
Environmental Matters
Our operations must comply with environmental laws and regulations at all levels, including air emissions, wastewater discharges, waste management, and site remediation. Under certain environmental laws, an owner or operator of real property may be held liable for investigation and remediation costs associated with environmental contamination at or emanating from the property, regardless of whether the owner or operator caused the contamination or was aware of it.
We have not conducted comprehensive environmental site assessments for all of our properties. However, based on our operating experience and information available to us, we are not currently aware of any material environmental liabilities. There can be no assurance that environmental conditions or liabilities have not occurred or will not be discovered in the future, or that future changes in environmental laws, regulations, or their interpretation will not require us to incur additional costs or otherwise adversely affect our business, financial condition, results of operations, or cash flows.
Employees
As of February 1, 2026, our corporate office has four employees. Additionally, each of our restaurants employs a General Manager, an assistant manager or supervisor, and a varying number of restaurant staff, all of whom are hourly employees. As of March 1, 2026, including the Company’s wholly owned subsidiaries, we had approximately 179 employees, consisting of 28 full-time and 151 part-time staff. None of our employees are unionized or covered by collective bargaining agreements, and we believe our current employee relations are good.
Marketable Securities
From time to time, we purchase publicly traded marketable securities. Historically, these securities consisted of investments in exchange-listed securities, with published per-share prices readily available.
Investments
Bagger Dave’s-
Our investments include our net investment in Bagger Dave’s as determined under the “Equity Method” of accounting, net of recording our equity share in Bagger Dave’s losses. During the third quarter of 2025, our share of the equity resulted in our investment in Bagger Dave’s being reduced to zero on December 28, 2025.
NGI related party investment-
Before 2023, BT Brands made a series of equity investments in NGI Corporation (“NGI”), resulting in a minority ownership interest with an aggregate carrying value of $304,000. As of September 28, 2025, the Company evaluated the recoverability of its investment and concluded that impairment indicators were present, including recurring operating losses at NGI and insufficient capital to sustain operations without continued external financing. In addition, there were no observable market transactions or other valuation inputs available to determine the investment’s carrying amount.
Based on this assessment, the Company determined that its equity investment in NGI was impaired, and we recorded an impairment charge of $304,000 as of September 28, 2025, entirely writing down the carrying value of the investment.
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Item 1A. Risk Factors
An investment in our securities involves a high degree of risk. You should carefully consider the risks described below, together with the other information in this Annual Report. The risks described are not the only risks we face, and additional risks not presently known or that we currently deem immaterial may also impair our business. If any of the following risks occur, our business, financial condition, results of operations, and cash flow could be materially adversely affected, and the market price of our common stock and warrants could decline.
Risks Related to the Proposed Business Combination with Aero Velocity
The proposed Merger with Aero Velocity may not be completed on the anticipated terms or timeline, or at all.
The proposed business combination with Aero Velocity Inc. (“Aero”) is subject to numerous conditions, including stockholder approval, the effectiveness of required registration statements, regulatory and exchange approvals, and the satisfaction or waiver of customary closing conditions. There can be no assurance that these conditions will be satisfied or waived. Regulatory review, SEC comments, financing conditions, or other factors could delay or prevent completion.
If the transaction is not completed, we may incur substantial legal, accounting, advisory, and other transaction-related expenses without realizing anticipated benefits. The pendency of the transaction may also create operational disruption, harm relationships with employees and business partners, and adversely affect our stock price.
The proposed Merger will fundamentally change the nature of our business, and our historical results will not be indicative of future performance.
If completed, the combined company is expected to focus primarily on unmanned aerial vehicle manufacturing and related services rather than restaurant operations. Our historical financial statements reflect restaurant operations and will not be indicative of the future performance, financial condition, or risk profile of the combined company.
The transaction represents a significant strategic shift into an industry with different capital requirements, regulatory frameworks, operational risks, and competitive dynamics. Investors who purchased our securities based on our historical restaurant operations will own securities in a company operating in a different industry. If the combined company fails to execute its business plan, the value of our securities could decline materially.
If the proposed Merger is completed, our existing stockholders will experience substantial dilution and reduced voting power, and Aero stockholders are expected to obtain control of the combined company.
Upon completion of the proposed business combination, our existing stockholders are expected to hold a minority ownership interest in the combined company. The transaction contemplates the issuance of a significant amount of convertible preferred stock to Aero stockholders. A certain series of this preferred stock is expected to carry voting rights that are disproportionate to its economic ownership, including enhanced voting rights on an as-converted basis.
As a result, Aero stockholders are expected to control the election of directors and the outcome of matters submitted to a stockholder vote. Our existing common stockholders will have limited ability to influence corporate governance, strategic decisions, or other significant matters, and the market price of our common stock could be adversely affected.
In addition, conversion of the preferred stock into common stock at the stated conversion price could result in substantial dilution to existing stockholders, particularly if the market price of our common stock is below or near the conversion price at the time of conversion.
The proposed spin-off of BT Group, Inc. is not expected to qualify as a tax-free transaction and may result in taxable income to our stockholders.
The contemplated spin-off of BT Group, Inc. is not expected to qualify as a tax-free transaction for U.S. federal income tax purposes. As a result, stockholders may recognize taxable income upon the distribution of BT Group shares, potentially without receiving cash to satisfy the resulting tax liabilities.
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The tax treatment of the spin-off may vary depending on individual circumstances, and we do not currently intend to seek an IRS ruling regarding its tax consequences. Any taxable treatment could reduce the value received by stockholders and adversely affect trading prices.
We may not realize the anticipated benefits of the proposed business combination, and the merged company may face significant operational, financial, and strategic challenges.
Even if the proposed business combination is completed, there can be no assurance that the combined company will achieve the anticipated benefits of the transaction. Realizing those benefits will depend, among other things, on the combined company’s ability to execute its business plan, attract and retain key personnel, obtain financing on acceptable terms, manage its capital structure, comply with applicable regulatory and listing requirements, and respond effectively to competitive and market conditions.
The combined company may also face unanticipated costs, liabilities, or challenges, and management’s attention may be diverted toward integration, reporting, and strategic matters following the transaction, which could adversely affect operating performance.
The proposed spin-off of BT Group, Inc., may not be completed, may be delayed, or may not achieve its intended objectives.
The proposed business combination with Aero contemplates a spin-off of BT Group, Inc., which would hold our restaurant operations and related assets and liabilities. The spin-off is subject to various conditions and approvals and may be delayed, not completed on the anticipated terms or timeline, or not completed at all. Even if completed, there can be no assurance that BT Group, Inc. will achieve a public listing, operate successfully as a standalone company, or deliver value to our stockholders.
Failure to complete the spin-off as contemplated, or adverse market or regulatory conditions affecting BT Group, Inc., could negatively affect the overall structure and anticipated benefits of the proposed transaction.
The proposed business combination could expose us to litigation, regulatory scrutiny, and stockholder claims.
Transactions of the type contemplated by the proposed business combination frequently result in litigation, including stockholder lawsuits challenging the transaction, the consideration to be received, or the disclosure provided in connection with the transaction. Defending such actions could be costly, time-consuming, and distracting to management, regardless of the outcome, and could result in significant liability or settlement costs.
In addition, regulatory authorities, including the SEC and Nasdaq, may review aspects of the proposed transaction, which could result in delays, additional disclosure requirements, or conditions to completion.
The combined company may face risks related to continued listing standards and market acceptance following the transaction.
Following completion of the proposed business combination, the combined company will remain subject to the continued listing requirements of The Nasdaq Stock Market, including requirements relating to stock price, market capitalization, stockholders’ equity, governance, and public float. There is no assurance that the combined company will be able to meet these requirements. Any failure to satisfy applicable listing standards could result in delisting, which would reduce the liquidity of the combined company’s securities, limit access to capital, and adversely affect the market price of our common stock.
Risks Related to Our Growth Strategy
If our proposed merger with Aero Velocity does not close, or if the related spin-off of our restaurant operations is not completed, our growth strategy and business outlook may change.
The Merger Agreement with Aero Velocity contemplates a spin-off of our existing restaurant operations into a new company. If either the merger or the spin-off is delayed, renegotiated, or fails to close, we may incur transaction-related costs, experience operational disruption, or be required to reassess our strategic focus. Uncertainty surrounding the Merger may also affect investor perception, employee retention, and partner relationships.
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We may not be able to integrate, operate, or improve acquired businesses effectively.
The integration and operation of an acquired business may be difficult and may impose significant demands on management and our administrative and financial resources. Integration risks include, among others, implementing consistent operating standards; consolidating systems, procedures, and vendors; integrating management and personnel; retaining key employees; maintaining employee morale; adapting marketing strategies to local markets; and establishing or enhancing financial reporting systems and internal control over financial reporting. These challenges may be more pronounced if we acquire or invest in businesses outside the restaurant industry, given our management team’s limited operational experience in those markets. If we are unable to successfully integrate or operate acquired restaurants, our business, results of operations, and cash flows could be materially adversely affected.
Acquisitions may expose us to unknown liabilities, impairment charges, and other unanticipated consequences.
Acquired businesses may have liabilities that are not identified during due diligence, including employment, tax, food safety, lease, insurance, vendor, litigation, or regulatory matters. Acquired assets, including goodwill, tradenames, other intangibles, and long-lived assets, may be subject to impairment if performance does not meet expectations or market conditions deteriorate. Acquisitions outside our traditional restaurant operations may expose us to additional or different risks, including industry‐specific regulatory regimes, contractual obligations, or operational liabilities that are more difficult to identify or quantify. In addition, acquisitions may disrupt our existing operations and divert management attention, particularly in the periods immediately following a transaction.
Our growth strategy may require additional capital that may not be available on acceptable terms, or at all, and rising interest rates could increase our borrowing costs.
Our ability to pursue acquisitions and growth initiatives depends in part on our access to capital. Market conditions, our operating performance, our stock price, and other factors may limit our ability to raise funds when needed, on acceptable terms, or at all. If we raise capital through equity or convertible securities, existing stockholders may experience dilution, and new securities may have rights senior to our common stock. If we incur debt, we may be subject to restrictive covenants, collateral requirements, and increased debt service obligations, which could limit financial flexibility and adversely affect our results of operations. Higher interest rates may increase borrowing costs and reduce the availability of financing for acquisitions or other corporate purposes. Non‐restaurant acquisitions or strategic transactions may require additional or different forms of financing and could increase our capital needs and financial risk.
Our growth strategy may divert management’s attention from our existing operations.
Pursuing acquisitions, restaurant openings, and expansion requires significant management time and resources and could reduce attention available for operating and improving our existing restaurants. Any resulting decline in operational focus could adversely affect sales, margins, service quality, employee retention, and overall operating performance.
Long-term leases and real estate commitments may create fixed obligations that could adversely affect our financial performance.
Certain acquired restaurants may be subject to long-term, non-cancellable leases and other contractual obligations that require us to pay rent, common area charges, taxes, insurance, maintenance, and other occupancy costs regardless of the restaurant’s performance. If we close or underperform in leased locations, we may remain obligated under the lease and may incur additional costs to exit, assign, or sublease. Lease renewals may also result in higher occupancy costs or the loss of desirable locations, any of which could materially adversely affect our financial condition and results of operations. While this risk is most pronounced in restaurant operations, other acquired businesses may also involve fixed contractual or capital commitments that reduce financial flexibility.
If we grow rapidly, we may not be able to manage that growth effectively.
Significant growth could strain our managerial, administrative, operational, and financial resources. To manage growth effectively, we must enhance operational and financial controls, improve information systems and reporting capabilities, and hire, train, and retain qualified personnel. Growth through acquisitions or strategic transactions outside the restaurant industry may increase these challenges due to differing business models, systems, or regulatory requirements. If we are unable to do so, our business could be harmed, and we may be unable to execute our strategy effectively.
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We rely on key executives to operate our business.
We rely on Gary Copperud, our Chief Executive Officer, and Kenneth Brimmer, our Chief Operating Officer and Chief Financial Officer, to make key decisions relating to our operations and finances. The loss of either executive could adversely affect our business. In addition, neither individual devotes full-time efforts to the Company, as described under “Management.” Our reliance on a limited management team may be further heightened as we evaluate and pursue growth opportunities outside our traditional areas of operation.
Our evaluation of growth opportunities outside the restaurant industry may expose us to additional risks and uncertainties that could adversely affect our business.
In addition to growth within the restaurant and food service sector, management is evaluating strategic transactions and other growth opportunities that may involve businesses outside our historical areas of operation. Pursuing opportunities in new industries involves risks and uncertainties that may be difficult to identify or evaluate in advance, including our limited experience operating non-restaurant businesses, challenges in assessing industry-specific risks, unanticipated regulatory or compliance requirements, and difficulties integrating new operations into our existing management structure.
These efforts may also divert management time and resources, increase professional fees and transaction costs, and create operational distractions, whether or not the transaction is ultimately completed. There can be no assurance that any such opportunity will be successfully identified, consummated, or managed, or that any anticipated benefits will be realized. If we are unable to evaluate, integrate, or operate businesses outside the restaurant industry effectively, our results of operations, cash flows, and financial condition could be materially adversely affected.
Risks Related to Operating in the Restaurant Industry
We face intense competition, and our inability to compete effectively could adversely affect sales and margins.
The restaurant industry is highly competitive across price, service, location, and quality. Many competitors have greater financial, marketing, and operational resources and stronger brand recognition than we do. Increased competition, including from delivery-focused restaurants, supermarkets and prepared meals, meal kits, and other at-home dining alternatives, could reduce traffic and profitability. Competitive discounting may further pressure margins.
Cost increases could adversely affect our operating margins and financial performance.
We are exposed to increases in food and beverage costs, paper and packaging, labor, utilities, insurance, maintenance, rent, and other operating expenses. Inflation, supply chain disruptions, adverse weather, public health matters, and other factors beyond our control may increase costs. Our ability to offset cost increases through menu price increases or operational initiatives may be limited by competitive conditions and customer price sensitivity. If we cannot offset cost increases, our margins and results of operations could be adversely affected.
Labor shortages, wage inflation, and changes in employment laws could increase costs and disrupt operations.
Our business is labor-intensive and depends on our ability to hire, train, and retain sufficient qualified employees. Labor shortages, higher turnover, or an inability to staff restaurants adequately could adversely affect service levels and operating efficiency. In addition, changes in minimum wage, overtime, paid leave, scheduling, healthcare, and other employment laws could increase labor costs and compliance burdens. If we are unable to effectively manage these labor-related challenges, our profitability and ability to operate efficiently could be materially adversely affected.
Food safety incidents or perceived food safety issues could harm our brand and the results of our operations.
Any foodborne illness, contamination, tampering, or other food safety incident involving our restaurants or suppliers, or involving the broader restaurant industry, could harm our reputation, reduce demand for our products, result in temporary closures, and lead to litigation, regulatory actions, and increased costs. Any such event could materially reduce customer traffic, increase our costs, and negatively affect our financial performance.
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Unfavorable publicity, including through social media, could harm our brands and reduce customer traffic.
Negative publicity, including online reviews regarding food quality, customer experience, inspections, employee matters, or other issues—whether or not accurate—could harm our reputation and reduce sales. Social media can amplify these risks and lead to rapid, widespread dissemination of adverse information. Loss of customer trust and reduced traffic may significantly affect our sales, profitability, brand image, and future growth.
Risks Related to Health Emergencies
Health emergencies, including the resurgence of COVID-19 variants or other outbreaks, could reduce customer traffic, disrupt staffing, increase commodity costs, and cause supply disruptions, resulting in temporary closures or other operational constraints. If any such health emergency occurs, it could materially adversely affect our revenues, operating margins, and overall financial condition.
Risks Related to Information Technology, Cybersecurity, and Data Privacy
Technological disruptions or failures could interrupt operations and adversely affect our business.
We rely on technology systems, including point-of-sale systems and other systems operated and supported by third-party vendors. System failures, telecommunications disruptions, or service provider outages could disrupt operations, degrade customer experience, and incur costs or liabilities. Any prolonged or significant disruption could impair our ability to operate our restaurants efficiently and could materially adversely affect our results of operations.
Cybersecurity incidents could result in operational disruption, reputational harm, and liability.
Although we rely on third-party providers for payment processing and certain employee-related systems and we generally do not store customer payment card information, cybersecurity incidents affecting our vendors or us could result in unauthorized access to data, system disruptions, reputational harm, regulatory investigations, litigation, and remediation costs. Cybersecurity threats continue to evolve, and our controls may not prevent all incidents. Any such incident could result in significant costs, operational disruption, and reputational damage, materially adversely affecting our business and financial results.
Failure to manage social media effectively could harm our reputation and the results of our operations.
Information on social media may be inaccurate or adverse to our interests and can spread quickly. In addition, ineffective or inappropriate use of social media by us, our customers, or employees could lead to reputational harm, litigation, increased costs, or reduced customer traffic. If these risks materialize, they could negatively affect customer perception, reduce traffic to our restaurants, and materially affect our revenues.
Legal and Regulatory Risks
Litigation and regulatory proceedings could be costly and could adversely affect our business.
We may be subject to claims by employees, customers, suppliers, stockholders, and others, including wage-and-hour, discrimination, harassment, wrongful termination, premises liability, food-related claims, and other matters. Litigation and regulatory proceedings can be costly, time-consuming, disruptive, and may result in adverse publicity. Insurance may not be available on commercially reasonable terms or in amounts sufficient to cover all liabilities. An adverse outcome in any such proceeding could result in significant monetary damages, operational restrictions, or reputational harm, materially adversely affecting our business and financial condition.
Regulatory changes and shifting consumer health preferences could require updates to menu disclosures and adversely affect demand.
As we grow, we may be subject to additional federal, state, or local requirements, including menu labeling and other nutritional disclosures. New regulations or shifts in consumer preferences could require adjustments to menu items or disclosures, adversely affect demand, or increase compliance costs. These changes could increase operating costs, reduce customer demand for certain menu offerings, and materially adversely affect our operating results.
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We are subject to extensive federal, state, and local regulation, and compliance is costly and complex.
Our operations are subject to numerous laws and regulations, including those relating to food safety, sanitation, health and fire standards, alcohol service (where applicable), employment practices, wage and hour compliance, immigration verification, and accessibility requirements under the ADA. Failure to comply could result in fines, enforcement actions, litigation, or the loss of required licenses and permits. Any failure to comply with laws and regulations could disrupt our operations, increase costs, and materially adversely affect our business and results of operations.
Failure to maintain required licenses and permits could harm our business.
Restaurants must obtain and renew various licenses, permits, and approvals. If we are unable to obtain or maintain required licenses or approvals, we could be required to modify operations, delay openings, or close locations. Such outcomes could reduce revenues and profitability and materially adversely affect our financial condition.
We may not be able to adequately protect our intellectual property, which could reduce brand value.
Our business depends in part on trademarks and other intellectual property. Third-party infringement, misappropriation, challenges to our rights, or claims that we have infringed others’ rights could be costly and adversely affect our brands and operations. Any impairment of our intellectual property rights could diminish brand recognition and customer loyalty and materially adversely affect our business.
General Risk Factors
Economic conditions and reduced consumer discretionary spending could adversely affect our business.
Our performance depends on consumer discretionary spending. Economic downturns, inflation, financial market volatility, and reductions in consumer confidence may reduce restaurant traffic and sales. If sales decline, profitability may be adversely affected, and we may take actions such as delaying remodels, closing locations, or recording impairment charges. Sustained adverse economic conditions could materially adversely affect our revenues, margins, and cash flows.
Regional economic conditions and events could adversely affect our results due to geographic concentration.
A significant portion of our operations is concentrated in a limited number of states. Adverse regional economic conditions, severe weather, natural disasters, or other local events could adversely affect our results of operations and financial condition. Because of this concentration, adverse events in these regions could disproportionately impact our business and financial results.
Damage to our reputation could adversely affect our business and our results of operations.
Our success depends in part on consumer perception of our brands. Any event that harms consumer trust or perception—including incidents involving food quality, service, safety, or employee conduct—could reduce brand value and customer traffic and materially adversely affect our business. A sustained loss of consumer confidence could materially adversely affect our revenues and long-term growth prospects.
Our business is subject to seasonal fluctuations due to weather and other factors.
Historically, customer spending at our midwestern restaurants is lowest in the first and fourth quarters, driven by holidays, consumer habits, and adverse weather. Likewise, our restaurants in Florida experience declines in customer spending during the summer, when fewer tourists visit. Our restaurant in Woods Hole, Massachusetts, experiences reduced customer traffic outside the summer months. Therefore, our quarterly results will continue to be affected by seasonality. Because of these and other factors, our financial results for any quarter may not be indicative of the results achieved for a full fiscal year. Seasonal fluctuations may cause volatility in our quarterly operating results and cash flows, complicating planning and adversely affecting our financial performance in certain periods.
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If we cannot offset rising labor costs with price increases, our financial performance could be adversely affected.
Increases in hourly labor costs and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially in certain localities, could increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance. If labor cost increases exceed our ability to adjust pricing or improve productivity, our margins and profitability could be materially adversely affected.
Failure of our internal control over financial reporting could adversely affect our business and financial results.
Our management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process is designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we will prevent or detect a misstatement of our financial statements or fraud. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and in a timely manner or to detect and prevent fraud. The identification of a material weakness could indicate a lack of controls adequate to produce accurate financial statements, which, in turn, could cause a loss of investor confidence and a decline in the market price of our common stock. We cannot assure you that we will be able to remediate any material weaknesses that may be identified in future periods in a timely manner, or that we will maintain all necessary controls to maintain continued compliance. Likewise, we cannot guarantee we will be able to retain sufficiently skilled finance and accounting personnel, particularly given the increased demand for such personnel among publicly traded companies. Any failure to maintain effective internal controls could result in financial reporting errors, loss of investor confidence, regulatory scrutiny, and a decline in the market price of our common stock.
Risks Related to Ownership of Our Common Stock
Activist stockholders could adversely affect our business and results of operations.
From time to time, stockholders may propose or seek to influence corporate actions or strategic decisions. Activist stockholder activity, whether successful or not, could be costly and time-consuming, diverting management’s attention and resources from operating our business. In addition, activist activity may create perceived uncertainty regarding our strategy or future direction, which could adversely affect our ability to attract and retain employees, customers, suppliers, and other business partners, and could hinder our ability to execute our business plan. Activist activity could also lead to litigation or other disputes, which may be costly and disruptive, regardless of the outcome. These activities could distract management, increase costs, and create uncertainty that could adversely affect our business and stock price.
The market price of our common stock may be volatile, and you may lose all or part of your investment.
The trading price of our common stock may fluctuate significantly, and you may not be able to sell your shares at or above the price you paid. The stock market has experienced, and may continue to experience, significant volatility, and our stock price may be particularly volatile due to, among other things, our operating results, strategic initiatives, merger-related developments and announcements, and general market conditions. As a result, the market price of our common stock may decline substantially, including for reasons unrelated to our operating performance. As a result of this volatility, investors may experience significant losses, and our ability to access capital markets could be adversely affected.
Factors that may cause our stock price to fluctuate include, among others:
· analyst reports or changes analysts’ estimates or recommendations;
· our failure to meet analysts’ projections or guidance;
· changes in management or key personnel;
· strategic transactions or investments, or changes in business strategy;
· litigation and governmental investigations;
· publicity (regardless of accuracy), including on social media platforms;
· terrorist acts, acts of war or periods of widespread civil unrest;
· a foodborne illness outbreak, national health emergency or a pandemic;
· severe weather, natural disasters, and other calamities; and
· changes in the general market and economic conditions.
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Our articles of incorporation, bylaws and Wyoming law may discourage a change of control of our Company and depress the price of our stock.
Our articles of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying, or preventing a change of control of our company or changes in our management, including, among other things:
These provisions could limit strategic alternatives and reduce the value of stockholders, and may be realized in a change‐of‐control transaction.
We have no plans to pay cash dividends on our common stock.
We will likely retain any future earnings for operations, expansion, and debt repayment, and we have no plans to pay any cash dividends in the foreseeable future. Any decision to declare and pay dividends in the future will be at the discretion of our board of directors and will depend, among other things, on our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants in any existing or future indebtedness of our subsidiaries or us, including a credit facility. As a result, you may not receive any return on an investment in our common stock for a price greater than that you paid. As a result, investors may need to rely on stock price appreciation to achieve a return on their investment.
Raising additional equity capital may be more challenging while the warrants are outstanding.
While the warrants issued in our IPO remain outstanding, the holders of such warrants will be able to profit from an increase in the market price of our common stock. However, we may find it more difficult to raise additional equity capital. At the same time, the warrants are outstanding, and we may not have the capital to fund our expansion and growth plans or for other corporate purposes. If we are unable to raise capital on acceptable terms, our ability to fund growth initiatives and operations could be materially adversely affected.
Our board has broad authority to issue preferred stock, which could adversely affect holders of our common stock and could discourage or delay a change in control.
Our articles of incorporation authorize the issuance of up to 2,000,000 shares of preferred stock with designations, rights and preferences that may be determined from time to time by the board of directors. Subject to applicable law, our certificate of incorporation and bylaws, and applicable stock exchange requirements, our board of directors has the authority to create and issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.
In connection with the proposed business combination, we are seeking stockholder approval for the issuance of Series A-1 and Series A-2 Convertible Preferred Stock. In addition, our board may in the future authorize the issuance of additional shares or series of preferred stock on terms that could dilute the interests of common stockholders, adversely affect the market price of our common stock, or be used, under certain circumstances, as a method of discouraging, delaying, or preventing a change in control of our company or a change in our management.
These provisions could adversely affect the voting power of holders of common stock and limit the price investors may be willing to pay for our common stock in the future.
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These provisions might discourage, delay, or prevent a change in control of our company or a change in our management. These provisions could adversely affect the voting power of holders of common stock and limit the price investors may be willing to pay for our common stock in the future.
Claims for indemnification by our directors and officers may reduce available funds to satisfy successful third-party claims.
Our articles of incorporation and bylaws provide that the Company will indemnify our directors and officers, in each case, to the fullest extent permitted by Wyoming law.
In addition, as permitted by the Wyoming Business Corporation Act, our bylaws and the indemnification agreements that we have entered into with our directors and officers provide that:
Reduced disclosure requirements may make our common stock less attractive to investors.
Reduced disclosure requirements applicable to us as a smaller reporting company may make our common stock less attractive to investors.
We qualify as a “smaller reporting company” under SEC rules. As a result, we are permitted to provide scaled disclosures in our SEC filings, including reduced executive compensation disclosure, and we are exempt from the requirement under Section 404(b) of the Sarbanes-Oxley Act that our independent registered public accounting firm attests to the effectiveness of our internal control over financial reporting. We may also be eligible to rely on other disclosure accommodations available to smaller reporting companies and, if applicable, emerging growth companies.
If we use these accommodations, investors may find our common stock less attractive because they may receive less information than they would from companies that do not qualify for, or elect not to use, scaled disclosure. Any such perception could reduce trading volume, increase price volatility, and adversely affect the market price of our common stock.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity
We rely on information technology systems to operate our business and store and process data, including confidential business information and personal information of our customers and employees. Generally, these systems are maintained by third parties, who assume responsibility for data security. We are, however, subject to cybersecurity risks, including unauthorized access to our systems, data breaches, service disruptions, and other incidents.
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Cybersecurity Risk Management and Strategy
We maintain processes to identify, assess, manage, and mitigate material risks posed by cybersecurity threats. These processes are integrated into our overall risk management framework and include, among other things, risk assessments, monitoring of information technology systems, employee training, and the use of third-party service providers and security tools. We also maintain incident response and business continuity processes designed to address cybersecurity incidents, including incidents involving third-party service providers.
Cybersecurity risks are evaluated in the context of potential operational, financial, legal, and reputational impacts. While we seek to manage these risks, cybersecurity threats continue to evolve, and there can be no assurance that our processes will prevent all cybersecurity incidents.
Governance
Responsibility for oversight of cybersecurity risks resides with our management team, which regularly assesses cybersecurity risks and the effectiveness of related processes and controls. Senior management is informed of material cybersecurity risks and incidents, as appropriate, and is responsible for implementing and maintaining our cybersecurity risk management practices.
The Board of Directors oversees the Company’s risks, including cybersecurity risks, and receives information from management on material risks and related mitigation efforts as part of its overall risk oversight function.
Cybersecurity Incidents
As of the date of this Annual Report, we have not experienced a cybersecurity incident that has materially affected our business, operating results, or financial condition. However, we may experience cybersecurity incidents in the future that could have such effects.
Cybersecurity risks are described in more detail under Item 1A, “Risk Factors—Cybersecurity incidents or security breaches involving customer or employee information could adversely affect our business.”
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Item 2. Properties.
Corporate Offices
Our principal office is in a leased office space in Minnetonka, Minnesota. Effective January 2, 2022, we agreed to reimburse Brimmer Company, LLC, an affiliate of the Company, for the monthly rent of $1,350 on approximately 1100 square feet in Minnetonka, Minnesota, at 10501 Wayzata Blvd Ave S, Suite 102, where administrative activities are performed. Our office space is adequate for its intended purposes and our near-term expansion plans.
Properties
We own our Burger Time properties; long-term leases cover our other locations. The table below provides basic information about each of our BTND properties.
BTND, LLC
Location Open Since Building (Sq. Ft.) Land (Sq. Ft.) Owner Business Operator
Grand Forks, North Dakota 1989 650 29,580 BTND, LLC BTND, LLC
Sioux Falls, South Dakota 1991 650 17,688 BTND, LLC BTND, LLC
Minot, North Dakota(2) Closed 800 33,600 BTND, LLC (2)
Ham Lake, Minnesota (1) Closed 1,664 31,723 BTND LLC (1)
Keegan’s Seafood Grille
Upon acquiring Keegan’s assets in March 2022, we entered into a 132-month triple-net lease with an unrelated landlord for the property occupied by Keegan. The lease terms provided for an initial rent of $5,000 per month, increasing annually at the greater of 3% or the increase in the Consumer Price Index over that period. The location comprises approximately 2,900 square feet of dining, kitchen, and storage space, and includes typical features of a full-service restaurant.
Pie In The Sky Coffee and Bakery
With our purchase of PIE assets in May 2022, we entered into a five-year triple-net lease with the seller of the assets for the property PIE occupies. The lease provides three five-year extensions at our option. The lease terms provide for an initial rent of $10,000 per month, increasing annually to approximately $11,000 per month during the first five-year term. The location comprises approximately 3,500 square feet of dining, kitchen, and storage space on two levels, with a production kitchen and storage and office space on the lower level; there is also approximately 1,500 square feet of outdoor dining space, serviced by an outdoor service bar. The landlord granted us a right of first refusal to purchase the property on the terms it receives from a third party during the term, including any lease extension.
Schnitzel Haus
Concurrently with the May 13, 2024 purchase of Schnitzel Haus assets, we assumed the remaining term of the existing lease obligation for approximately 4,200 square feet. The Schnitzel lease expires January 1, 2028. Monthly lease payments are approximately $4,700 per month, plus common area charges, and are subject to annual escalation based on the Consumer Price Index.
Contractual Obligations
As of December 28, 2025, we had $2,134,358 in contractual mortgage obligations for the real property on which our Burger Time restaurants are located. Our monthly required payment is approximately $23,000. We are also obligated under operating lease agreements to future payments totaling approximately $1,568,000, requiring monthly rental payments of approximately $24,000.
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Item 3. Legal Proceedings.
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. The results of any current or future litigation cannot be predicted with certainty, and, regardless of the outcome, such litigation can adversely affect us due to defense and settlement costs, diversion of management resources, and other factors.
The Company is a party to litigation related to a lease dispute for its former Village Bier Garten location in Cocoa, Florida. The landlord has asserted claims for unpaid rent and other amounts. The Company disputes the claims and intends to defend the matter. The outcome of the litigation cannot be predicted at this time.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock began trading on the Nasdaq Stock Market under the symbol “BTBD” on November 12, 2021, and our warrants issued as part of the units sold in the IPO commenced trading on the Nasdaq Stock Market under the symbol “BTBDW” on November 12, 2021.
Stockholders
As of March 1, 2026, approximately 36 stockholders of record held 6,154,724 issued and outstanding shares of common stock. The number of record holders reflects the actual number of holders registered with our transfer agent. It does not reflect holders of shares held in “street name” or persons, partnerships, associations, corporations, or other entities identified in security position listings maintained by depository trust companies, which, based on our most recent available data, totals approximately 500 shareholders.
Dividends
We have never declared or paid cash dividends on our capital stock. We do not anticipate paying cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and any future earnings to support our operations and finance our business growth and development. Any future determination related to our dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects, the requirements of current or then-existing debt instruments and other factors our board of directors may deem relevant.
Issuer Purchases of Equity Securities
In June 2024, our Board of Directors authorized a share repurchase program pursuant to which the Company may repurchase up to 625,000 shares of its common stock (the “Share Repurchase Program”). As of December 28, 2025, the Company had repurchased 91,394 shares pursuant to the Share Repurchase Program, and 533,606 shares remained available for repurchase under the authorization. The Share Repurchase Program does not obligate the Company to repurchase any specific number of shares and may be suspended, modified, or terminated at any time.
In 2022, the Company purchased 65,000 shares of its common stock in a single repurchase program, and an additional 150,000 shares were repurchased prior to adopting the publicly announced repurchase plan. In 2024, the Company initiated its share repurchase activity under the Share Repurchase Program, and repurchased 91,394 shares in 2024, as reflected in the table below.
Additional information regarding the Share Repurchase Program is included under “Share Repurchase Program” in Note 9 to the consolidated financial statements.
(1) Calculated inclusive of commissions.
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Recent Sales of Unregistered Securities
We did not sell any equity securities during the year ended December 28, 2025.
Securities Authorized for Issuance under Equity Compensation Plans
In October 2019, our board of directors and stockholders adopted the 2019 Incentive Stock Plan (the “Plan”). In December 2022, the stockholders authorized an increase in the number of shares available for grant under the Plan to 1,000,000 shares. The plan is a comprehensive incentive compensation plan under which we can grant equity-based and other incentive awards to officers, employees, directors, consultants, and advisers to BT Brands and its subsidiaries. The plan is intended to attract, motivate, and retain qualified personnel and enhance stockholder value. Awards that lapse or are forfeited again become available for grant.
As of December 28, 2025, the Company had granted options and warrants to purchase 381,750 shares of common stock, including options granted to employees and consultants under the 2019 Plan and 100,000 warrants to a consultant outside of the 2019 Plan. A total of 46,000 options have been granted to non-employee directors, including 10,000 to a former director of the company. In 2025, a total of 7,500 options to purchase shares at $1.50 per share were granted to nonemployee directors with immediate vesting and a one-year expiration. The 100,000-share warrant grant to the consultant is subject to the terms of the consulting agreement. These consultant warrants vest monthly over 60 months.
Effective February 27, 2023, our board of directors approved a total grant of 250,000 shares of common stock to two officers (the “Grant Shares”). The Grant Shares vest when our common stock trades for $8.50 per share for 20 consecutive trading days. This requirement entitles the Company to redeem the common stock warrant issued in our IPO.
Equity compensation plans approved by security holders. 281,750 $ 2.39 718,250
Equity compensation plans not approved by security holders. 100,000 $ 2.50 -
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Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations is intended to provide information relevant to an assessment of our financial condition and results of operations and should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report.
Fiscal Year
Our fiscal year consists of 52 or 53 weeks and ends on the Sunday closest to December 31. The 52-week fiscal year 2025 ended on December 28, 2025, and the 52-week fiscal year 2024 ended on December 29, 2024.
Introduction
As of December 28, 2025, we owned and operated nine restaurants. In addition, we held a non-controlling 40.7% ownership interest in Bagger Dave’s Burger Tavern, Inc. (“BDVB”), an unconsolidated affiliate that operated five restaurant locations at year-end. Accordingly, our owned and minority-owned restaurant portfolio consisted of fourteen restaurant locations, comprised of
· Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”);
· Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”);
· Schnitzel Haus in Hobe Sound, Florida (“Schnitzel”).
In addition, we hold a 40.7% unconsolidated ownership interest in Bagger Dave’s Burger Tavern, Inc., which operates five restaurants.
Burger Time opened its first restaurant in Fargo, North Dakota, in 1987. Burger Time restaurants feature flame-broiled hamburgers, other quick-service menu items, and soft drinks. Burger Time’s operating principles emphasize value, a limited menu to support quality and speed of service, efficient single- and double-drive-thru designs supported by point-of-sale systems, and food prepared fresh to order at competitive prices.
The average customer transaction at Burger Time restaurants did not change significantly in fiscal 2025 compared to fiscal 2024, and based on our recent analysis, it is approximately $14.50. We continually evaluate menu pricing to manage gross margins amid fluctuating input costs. Our operating environment remains highly competitive, and numerous factors, including consumer demand, pricing sensitivity, competition, and broader economic conditions influence sales trends.
In recent periods, we have also begun evaluating potential growth opportunities outside the restaurant industry as part of our broader effort to enhance shareholder value. While restaurants remain our primary operating focus, we believe that certain non-restaurant businesses with strong fundamentals and scalable operating models may complement our existing structure. These efforts remain exploratory and subject to ongoing evaluation.
We operate under a centralized management structure that ensures operational continuity across our restaurant portfolio and enables us to leverage shared services and administrative efficiencies.
Recent Events
Our acquisitions have diversified our operations across restaurant concepts and geographic regions, reducing our dependence on the Burger Time brand. In May 2024, we acquired the Schnitzel Haus restaurant. In 2022, we acquired three operating restaurants and purchased 40.7% ownership interest in BDVB, a non-controlled affiliate.
Due to underperformance, we closed the Village Bier Garten restaurant in early 2025. In November 2025, the landlord of the Village Bier Garten premises in Cocoa, Florida, issued a notice of default alleging nonpayment of rent beginning in August 2025. Subsequent to the notice, the landlord filed a lawsuit against the Assignee of the lease, our 1519BT, LLC subsidiary and BT Brands, Inc., seeking recovery of unpaid rent and other amounts alleged to be due under the lease. We recorded an impairment charge of $215,000 in 2025 to write-off the remaining right-of-use asset. We believe this matter is a contractual dispute that will be resolved through negotiation or litigation. The Company’s position is that the landlord’s prior acceptance of rent payments from the assignee following the transfer of possession constituted constructive consent to the lease assignment. See Note 15 to Consolidated Financial Statements.
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In September 2025, we entered into the Merger Agreement to enter into a business combination with Aero Velocity, a private aerospace company, as described elsewhere in this Report. This proposed transaction did not impact the 2025 results of operation. If the merger is completed, we intend to spin off our restaurant operations and other existing assets into a separate company, BT Group, Inc. The forward-looking growth strategy described in this Report reflects management’s current views regarding BT Group, assuming the merger closes. There can be no assurance that the merger will be completed or that the spin-off will occur.
In January 2025, our unconsolidated affiliate, Bagger Dave’s, closed its Chesterfield, Michigan, location. BDVB is currently exploring strategic alternatives, including the potential sale of all Bagger Dave’s restaurant locations.
Material Trends and Uncertainties
Industry trends materially affect our business. These trends include ongoing challenges in attracting and retaining restaurant employees, rising wages, and increased labor competition across the retail and service industries. We also face rapidly evolving technological trends, including mobile ordering, delivery platforms, loyalty programs, and digital marketing, which larger competitors have adopted aggressively.
Food cost inflation moderated in 2025; however, we expect volatility to persist due to inflationary pressures and tariffs. Given the competitive nature of the restaurant industry, our ability to recover cost increases through menu pricing may be limited. Margin improvement efforts focus on operational efficiencies, equipment upgrades, and improved unit-level performance. If labor inflation, commodity volatility, or competitive pricing pressures persist, we believe they are reasonably likely to continue to impact restaurant-level margins and operating results.
Public health matters, inflationary pressures, supply chain disruptions, and labor availability continue to present uncertainty. We have implemented menu price increases and may continue to do so; however, such increases may not fully offset higher costs and could adversely affect consumer demand. In addition, our entry into an agreement to merge with Aero Velocity and the related plan to spin off our restaurant operations introduce additional uncertainties to our outlook.
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Fiscal 2025 Compared to Fiscal 2024
The following table presents our consolidated statements of operations expressed as a percentage of sales for the periods indicated. Percentages may not sum or may be adjusted to reflect the rounding.
Amount % Amount %
COSTS AND EXPENSES
Restaurant operating expenses
UNREALIZED GAIN (LOSS) ON MARKETABLE SECURITIES 128,822 1.0 (93,458 ) (0.6 )
IMPAIRMENT OF RELATED PARTY INVESTMENTS AND RECEIVABLES (520,718 ) (3.9 ) - -
Net Sales:
Net sales, which represent sales at our restaurant locations, for fiscal 2025 decreased $1.3 million, or 7.5%, to $13.5 million from $14.8 million in fiscal 2024. Among several factors, this decrease reflects the closure of the Village Bier Garten location at the beginning of the year; VBG contributed approximately $1.3 million in sales during fiscal 2024.
Comparable restaurant sales represent sales from Burger Time locations open for the full 52-week periods in both fiscal 2025 and fiscal 2024. A Burger Time restaurant in Minot, North Dakota, was closed during fiscal 2025. The Minot location generated approximately $560,000 in sales during fiscal 2024 and $281,000 during fiscal 2025. Schnitzel Haus, acquired in May 2024, contributed approximately $1.5 million in sales during fiscal 2025, an increase of approximately $0.8 million compared to fiscal 2024.
For Burger Time locations open for the full year, sales declined approximately $224,000, or 3.9%. The decline in comparable restaurant sales was primarily attributable to reduced customer traffic, partially offset by modest menu price increases. Average annual sales for the six Burger Time restaurants open at year-end were approximately $914,000 in fiscal 2025, compared with $952,000 in fiscal 2024, a 3.9% decline. For BTND locations that were open at year-end 2025, restaurant sales ranged from $691,000 to $1,224,000.
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Restaurant Operating Costs:
In 2025, restaurant operating costs (which refer to the costs associated with operating our restaurants, excluding general and administrative expenses, depreciation, amortization, and restaurant impairment charges) declined to 87.2% of restaurant sales from 95.1% in 2024. This decrease was due to the closure of less-profitable locations, improved margins at Pie In the Sky, and the matters discussed in the “Cost of Sales,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections discussed below.
The change in restaurant operating costs from fiscal 2024 to fiscal 2025 is summarized below:
Restaurant operating costs for the period ended December 29, 2024 $ 14,099,644
Decrease in food and paper costs. (1,111,130 )
Decrease in labor costs. (1,017,477 )
Decrease in occupancy and operating cost (205,317 )
Restaurant operating costs for the period ended December 28, 2025 $ 11,765,720
Costs of Sales - food and paper:
Food and paper costs decreased to 33.3% of restaurant sales in fiscal 2025 from 37.8% in fiscal 2024. This decrease reflects cost control initiatives, a more moderate inflationary environment, and menu price increases.
Labor Costs:
In 2025, labor and benefits costs decreased to 37.9% of restaurant sales from 41.3% in 2024. The decrease results from the closure of unprofitable locations and a greater focus on controlling labor costs across all locations. Payroll costs are semi-variable and therefore do not decline proportionally with declining revenues, which can cause labor costs to increase as a percentage of restaurant sales.
Occupancy and Other Operating Costs:
For 2025, occupancy and other costs were unchanged at 17.0% of restaurant sales, or $2,160,878, compared to $2,355,806, or in 2024.
Depreciation and Amortization Costs:
For 2025, depreciation and amortization costs decreased 12.7%, or $94,156, to $648,704 (4.5% of sales) from $742,860 (5.0% of sales) in 2024. The decline in total depreciation is attributable in part to the closing of VBG and the 2024 charge-off of the remaining asset value.
General and Administrative Costs:
General and administrative expenses declined by $227,375 to $1.5 million in fiscal 2025, down from $1.7 million in fiscal 2024, and decreased to 10.9% of sales from 11.4% in fiscal 2024, reflecting cost-control efforts across administrative activities.
Restaurant Impairment and Related Charges:
In 2024, the Company recorded an impairment charge of $371,872 related to its decision to close the Village Bier Garten location. In 2025, the Company recorded a $215,000 lease litigation accrual related to the former Village Bier Garten location in Cocoa, Florida. This amount reflects the remaining contractual lease payments associated with unpaid rent under the original lease agreement. The Company disputes the landlord’s claims and intends to vigorously defend the matter. The ultimate outcome of the litigation is uncertain and may differ from the amount recorded, including as a result of the landlord’s obligation to mitigate damages and the Company’s potential recovery from the assignee. The Company will continue to evaluate the matter and adjust the recorded amount as additional information becomes available.
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Loss from Operations:
Loss from operations improved to a loss of $364,585 in fiscal 2025 from a loss of $1.8 million in fiscal 2024. The fiscal 2024 loss included a $371,872 impairment charge related to Village Bier Garten. The 2025 loss includes a $215,000 litigation charge related to the closure of the Village Bier Garten and a lease liability dispute. Operating margins improved across the portfolio, particularly at PIE and Burger Time locations. Menu changes and improved cost controls increased operating margins at the Burger Time location, as discussed in the “Net Revenues,” “General and Administrative Costs,” and “Restaurant Operating Costs” sections above.
Interest and Other Income (Expense):
Interest expense increased slightly to $81,261 in fiscal 2025 as a result of ongoing amortization of principal on mortgage notes. Interest and dividend income declined to $148,666 from $178,279, reflecting lower average invested balances.
Net Loss
Net loss improved to a net loss of $687,839 in fiscal 2025 from a $2.3 million loss in fiscal 2024. The improvement reflects higher restaurant-level profitability, impairment and lease liability charges of $215,000 in 2025 and a 2024 charge of $371,872 for Village Bier Garten assets, and a lower equity loss from BDVB as the equity in BDVB reached zero. We also recorded a $216,248 charge to reduce the NGI bottle inventory to its estimated net realizable value of $574,000. Net loss for 2024 also reflects the impact of fully reserving for deferred tax benefits, resulting in a $206,000 income tax provision in 2024.
Restaurant-level EBITDA:
To supplement the consolidated financial statements, which are prepared and presented in accordance with GAAP, we use restaurant-level EBITDA (earnings before interest, taxes, depreciation, and amortization), which is not a measure defined by GAAP. This non-GAAP operating measure is useful to both management and, we believe, investors because it provides a means to gauge the overall profitability of our recurring, controllable core restaurant operations. However, this measure is not indicative of our overall results, nor does restaurant-level profit accrue directly to stockholders, primarily because it excludes corporate-level expenses. Restaurant-level EBITDA should not be considered a substitute for or superior to operating income, which is calculated in accordance with GAAP, and the reconciliations to operating income set forth below should be carefully evaluated.
We define restaurant-level EBITDA as operating income before general and administrative expenses, depreciation and amortization, and restaurant impairment and related charges. General and administrative expenses are excluded as they are generally unrelated to restaurant-specific costs. Depreciation and amortization are excluded because they are not ongoing controllable cash expenses and are unrelated to the health of ongoing operations. There were no pre-opening costs in fiscal 2025 or fiscal 2024.
Year
Reconciliation:
General and administrative, corporate-level expenses 1,464,021 1,691,404
Restaurant-level EBITDA margin 12.4 % 4.9 %
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Liquidity and Capital Resources
Overview
Our primary sources of liquidity are cash generated from restaurant operations, proceeds from the sale of marketable securities, and existing cash and marketable securities on hand. Our primary uses of cash are operating expenses, capital expenditures, debt service, transaction-related expenses, and strategic investments.
As of December 28, 2025, we had $4,442,300 in cash and marketable securities and $4,680,411 in working capital, compared to $4,270,970 in cash and marketable securities and $3,556,469 in working capital as of December 29, 2024. The increase in working capital was primarily attributable to improved operating performance and disciplined capital expenditures during fiscal 2025.
For fiscal 2025, we recorded a net loss of $687,839 compared to a net loss of $2,311,208 in fiscal 2024. Despite the net loss, operating cash flow improved significantly year over year due to stronger restaurant-level performance.
Our primary liquidity requirements are to fund working capital needs, capital expenditures, and general corporate needs, and to invest in or acquire businesses that are synergistic with our business. Our operations do not require significant working capital, as restaurants generally operate with negative working capital. Working capital deficits may be incurred in the future. Our liquidity and cash flow sources are cash and cash equivalents and marketable securities. We have used available cash to make acquisitions, service debt, and maintain our stores. Our working capital position benefits from the fact that we collect cash from sales to our customers at the point of purchase or within a few days from our credit card processor, and, in general, payments to our vendors are not due for 30 days.
The Company is currently involved in litigation related to a lease dispute at its former Village Bier Garten location in Cocoa, Florida. As of December 28, 2025, the Company recorded an accrued liability of $215,000 associated with this matter. While the Company disputes the landlord’s claims and intends to vigorously defend the matter, the timing and amount of any cash outflows related to this litigation remain uncertain. The Company believes that certain factors, including the landlord’s obligation to mitigate damages and the Company’s potential recovery from the assignee of the lease, may reduce the ultimate amount of any required payments. However, the resolution of this matter will be determined through litigation or negotiated settlement, and actual cash outflows may differ from the amount currently recorded. The Company does not currently expect this matter to have a material adverse impact on its overall liquidity position; however, management will continue to monitor developments and assess the potential impact on future cash flows.
The ultimate capital structure, liquidity profile, and operating model of BT Group will depend on the final terms and structure of the merger and spin-off. The separation could result in incremental transaction costs, advisory fees, audit and legal expenses, and standalone public company costs, including governance, compliance, and reporting expenses. In addition, the separation may require the establishment of new credit facilities or other financing arrangements for BT Group, and there can be no assurance regarding the availability or terms of such financing.
We are currently evaluating BT Group’s anticipated working capital needs, capital structure, and ongoing liquidity requirements. While we expect that existing cash balances and operating cash flow will support near-term operational needs of the restaurant business, completion of the merger and spin-off could materially change our capital allocation strategy, liquidity profile, and risk exposure. There can be no assurance that the merger will be completed or that the spin-off will occur.
Summary of Cash Flows
Operating Activities
Net cash provided by operating activities was $284,876 in fiscal 2025, compared to net cash used in operating activities of $284,876 in fiscal 2024. The improvement was primarily driven by reduced operating losses, improved restaurant-level margins, and the effect of the impairment charge recorded in the prior year.
Restaurant operations typically generate cash quickly due to point-of-sale transactions and short settlement cycles for credit card receipts, while vendor payment terms are generally 30 days. As a result, our restaurant operations do not require significant working capital investment.
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Investing Activities
Cash used in investing activities during fiscal 2025 primarily consisted of net purchases of marketable securities, approximately $172,925 in capital expenditures related to restaurant improvements and equipment upgrades, $380,861 for the purchase of Water Bottle Inventory, loans made to related party and purchase of a secured note totaling approximately $650,000, and proceeds from the sale of property of approximately $550,000. In fiscal 2024, investing activities included the acquisition of Schnitzel Haus for approximately $943,000 and net purchases of marketable securities.
We expect capital expenditures in fiscal 2026 to consist primarily of maintenance capital, equipment replacement, and operational enhancements. We do not currently anticipate significant expansionary capital expenditures.
Financing Activities
Cash used in financing activities during fiscal 2025 totaled $329,720 and consisted of scheduled principal payments on long-term debt and $140,450 in payments for deferred transaction costs. In 2024, cash used in financing activities was $450,849, including $142,794 for share repurchases. We did not acquire additional treasury shares during fiscal 2025.
Contractual Obligations
As of December 28, 2025, we had approximately $3.7 million in contractual obligations, including long-term debt and future lease liabilities. Our monthly required payments total approximately $47,000.
Investment in BDVB
As of December 28, 2025, the carrying value of our equity-method investment in Bagger Dave’s Burger Tavern, Inc. (“BDVB”) was zero. We are not obligated to fund additional losses of BDVB and have not guaranteed its indebtedness. In the future, any decision to advance or guarantee BDVB debt will result in additional equity losses. Proposed Merger with Aero Velocity and
Planned Spin-Off
In September 2025, we entered into an Agreement and Plan of Merger with Aero Velocity Inc., a private aerospace drone services company. If completed, the merger will result in a fundamental change in our capital structure and strategic focus.
Pursuant to the Merger Agreement, prior to closing, we intend to spin off our existing restaurant operations into a newly formed entity, (“BT Group, Inc.”) BT Group is expected to retain all of our existing restaurant operations, related assets, cash balances, and liabilities. Following the spin-off, BT Group would operate as a standalone company.
The proposed merger did not affect our fiscal 2025 liquidity or results of operations. However, if completed, the transaction will materially alter our capital structure, ownership profile, and financial risk. The combined post-merger entity is expected to issue convertible preferred stock to Aero stockholders, resulting in significant dilution to existing stockholders and a shift in voting control.
We intend to seek a listing of BT Group’s common stock on a national securities exchange; however, there can be no assurance that BT Group will meet applicable listing requirements or that such listing will be achieved in a timely manner. Failure to obtain a listing could adversely affect the liquidity and marketability of BT Group shares.
Completion of the merger and spin-off may result in incremental transaction costs, including advisory, legal, audit, and regulatory expenses. In addition, BT Group may incur ongoing standalone public company costs, including governance, compliance, and reporting expenses. The ultimate capital structure and liquidity profile of BT Group and the post-merger entity will depend on the final structure and terms of the transaction. There can be no assurance that the merger will be completed or that the spin-off will occur.
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Capital Allocation
We evaluate capital allocation priorities based on liquidity, operating performance, growth opportunities, and market conditions. While we have a Board-authorized Share Repurchase Program in place, we did not repurchase shares during fiscal 2025. Future repurchases, if any, will depend on liquidity, capital requirements, and strategic considerations, including the outcome of the proposed merger.
Critical Accounting Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. These estimates are based on historical experience and other assumptions we believe to be reasonable under the circumstances. Because these estimates involve judgment and are based on currently available information, actual results could differ materially from those estimates.
We believe the following accounting estimates involve a higher degree of judgment and are most critical to understanding our financial condition and results of operations.
Impairment of Long-Lived Assets
We review long-lived assets, including restaurant property and equipment and right-of-use lease assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Indicators include declining operating performance, negative cash flow trends, store closures, or changes in market conditions.
Recoverability is assessed by comparing the carrying value of the asset group to the estimated undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying value exceeds estimated undiscounted cash flows, an impairment charge is recorded based on the excess of carrying value over fair value.
These analyses require significant judgment regarding projected sales, operating margins, and terminal values. Changes in assumptions or operating performance could result in future impairment charges.
During fiscal 2024, we recorded a $371,872 impairment charge related to Village Bier Garten and entered into a lease assignment with a third party and in 2025, following receiving notice of default by the assignee to the lease we recorded a $215,000 charge representing the total amount of unpaid lease payments under the original lease.
Equity Method Investments
We account for our 40.7% ownership interest in Bagger Dave’s Burger Tavern, Inc. (“BDVB”) under the equity method of accounting. Under this method, we record our proportionate share of BDVB’s net income or loss and adjust the carrying value of the investment accordingly.
During fiscal 2025, cumulative equity losses reduced the carrying value of our investment in BDVB to zero. Once an equity-method investment is reduced to zero, we discontinue recognizing additional losses unless we have guaranteed obligations or otherwise committed to providing additional financial support, which we have not done. Determining whether additional losses should be recognized requires judgment regarding the nature of our involvement and any potential obligations.
We also evaluate equity-method investments for impairment if events or circumstances indicate that the decline in value may be other-than-temporary. This assessment requires judgment regarding the affiliate’s financial condition and prospects.
Impairment of Related-Party Investment (NGI Corporation)
Prior to 2023, we made a series of equity investments in NGI Corporation (“NGI”), a related party, resulting in an aggregate carrying value of $304,000. During fiscal 2025, we evaluated the recoverability of this investment. We determined that indicators of impairment were present, including recurring operating losses at NGI and insufficient capital to sustain operations without continued external financing.
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Because there were no observable market transactions or other valuation inputs to support the investment’s carrying value, management concluded that the decline in value was other than temporary. Accordingly, we recorded a full impairment charge of $304,000 during fiscal 2025. Following our foreclosure on the water bottle inventory in satisfaction of outstanding loans to NGI, we recorded a $216,718 adjustment to reduce the inventory’s value to its estimated net realizable value of $574,000.
Determining whether an investment is impaired and whether any impairment is other-than-temporary requires significant judgment regarding financial performance, liquidity, and future prospects of the investee. Changes in these factors could affect the timing and amount of impairment charges.
Contingencies and Litigation Reserve
The Company is involved in a legal dispute with the landlord of its former Village Bier Garten location in Cocoa, Florida. In connection with the Company’s cessation of operations and subsequent assignment of the lease to a third party in January 2025, the landlord asserted a claim for unpaid rent and other amounts under the lease and initiated litigation against the Company.
As of December 28, 2025, the Company recorded an accrued liability of $215,000, representing the remaining contractual lease payments associated with unpaid rent under the original lease agreement.
The determination of this liability required significant judgment. In evaluating the appropriate amount to record, management considered the nature of the landlord’s claims, the status of the litigation, and the terms of the underlying lease. The recorded amount reflects the full contractual lease payments remaining and does not incorporate potential reductions related to the landlord’s obligation to mitigate damages or potential recoveries from the assignee of the lease.
Management believes that certain factors, including the landlord’s acceptance of rent payments from the assignee following the transfer of possession and the landlord’s obligation under Florida law to mitigate damages after regaining possession of the premises, may affect the ultimate amount of damages, if any, that could be recoverable. Additionally, the Company has asserted a claim against the assignee for approximately $200,000 in unpaid consulting fees, which could offset any amount ultimately owed.
The ultimate resolution of this matter is subject to significant uncertainty and will be determined through litigation or negotiated settlement. As a result, actual outcomes may differ materially from the amount recorded. Management will continue to monitor developments in the matter and will adjust the recorded liability as additional information becomes available.
Lease Accounting
We recognize right-of-use assets and lease liabilities for operating leases based on the present value of future lease payments. Because our leases typically do not provide an implicit rate, we estimate an incremental borrowing rate to discount lease payments. This rate is based on our estimated secured borrowing rate for a similar term. Changes in assumptions regarding discount rates, renewal options, or lease terms could materially affect the measurement of lease assets and liabilities.
Marketable Securities Valuation
We hold marketable equity securities that are measured at fair value, with changes in fair value recognized in earnings. The fair value of these securities is based on quoted market prices. Market volatility may cause significant fluctuations in unrealized gains and losses, which could materially impact our results of operations in future periods. Given the marketable securities are liquid and tradable, management does not anticipate any losses on settlement. We do not believe that fluctuations in value will impact our overall liquidity and available capital resources.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, we are required to comply with certain scaled disclosure reporting obligations. We are not required to provide the information required by this item.
Item 8. Financial Statements and Supplementary Data.
The information required by this Item is included in Part II, Item 8 of this Annual Report, “Financial Statements and Supplementary Data,” and is presented in accordance with Article 8 of Regulation S-X applicable to smaller reporting companies.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of BT Brands, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of BT Brands, Inc. and Subsidiaries (the Company) as of December 28, 2025 and December 29, 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the fiscal years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the fiscal years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
/s/ Boulay PLLP
We have served as the Company’s auditor since 2015
Minneapolis, Minnesota
March 30, 2026
PCAOB ID: 542
Table of Contents
PART II, ITEM 8
BT BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
CURRENT ASSETS
Inventory – bottled water held for resale, net 574,000 -
Prepaid expenses and other current assets 22,152 117,621
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET 2,456,718 3,343,340
EQUITY METHOD INVESTMENT IN UNCONSOLIDATED AFFILIATE - 304,439
INVESTMENT IN EQUITY AND NOTES RECEIVABLE FROM RELATED COMPANY - 424,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
See Notes to Consolidated Financial Statements
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BT BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
52 Weeks Ended, 52 Weeks Ended,
COSTS AND EXPENSES
Restaurant operating expenses
Impairment of restaurant and right-of-use assets 215,000 371,872
UNREALIZED GAIN (LOSS) ON MARKETABLE SECURITIES 128,822 (93,458 )
IMPAIRMENT OF RELATED PARTY INVESTMENT AND RECEIVABLES (520,718 ) -
EQUITY IN LOSS OF UNCONSOLIDATED AFFILIATE (304,439 ) (415,085 )
NET LOSS PER COMMON SHARE - Basic and Diluted $ (0.11 ) $ (0.37 )
See Notes to Consolidated Financial Statements
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BT BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the 52-week periods- Common Stock AdditionalPaid-in Accumulated Treasury
Shares Amount Capital (Deficit) Stock Total
See Notes to Consolidated Financial Statements
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BT BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
52 Weeks ended,
CASH FLOWS FROM OPERATING ACTIVITIES
Amortization of debt issuance costs included in interest expense 4,050 5,400
Unrealized loss (gain) on marketable securities (128,822 ) 93,458
Impairment of restaurant and right-to-use assets 215,000 371,872
Impairment of related party investment and water bottle inventory 520,718 -
Loss on disposal of assets - 90,087
Changes in operating assets and liabilities, net of acquisitions-
Prepaid expenses and other current assets 95,489 (70,375 )
Net cash provided by (used in) operating activities 284,876 (713,505 )
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of net assets of Schnitzel Haus - (943,000 )
Purchase of secured note due from related company (359,221 ) -
Repayment of loans to related company 360,000 -
Purchase of water bottle inventory (380,861 ) -
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of broker margin loan - (115,899 )
Payment of deferred transaction costs (140,450 ) (10,000 )
Purchase of treasury shares - (142,794 )
SUPPLEMENTAL DISCLOSURES
Purchase of property and equipment is included in accounts payable. $ - $ 15,109
See Notes to Consolidated Financial Statements
Table of Contents
NOTE 1 – BUSINESS DESCRIPTION
Organization
BT Brands, Inc. (“BT Brands,” “we,” “us,” “our,” or the “Company”) was incorporated as Hartmax of NY Inc. on January 19, 2016. Effective July 30, 2018, we acquired 100% of the ownership interests of BTND, LLC (“BTND”) in exchange for shares of our common stock pursuant to a Share Exchange Agreement (the “Share Exchange”). In 2020, BT Brands Inc. was reincorporated in the State of Wyoming.
Business
As of December 28, 2025, the Company owned and operated nine restaurants and held a nonconsolidated 40.7% equity interest in an operator of five restaurants. During fiscal 2025, we owned and operated six Burger Time restaurants in the north-central United States. In July 2025, we closed a leased Burger Time location in Minot, North Dakota and subsequently converted the property to a land lease on which payments are expected to commence in 2026. The net book value of the closed location was approximately $128,000, including land and equipment, with certain equipment relocated to other Burger Time units.
We also own and operate Keegan’s Seafood Grille (“Keegan’s”), a dine-in restaurant located in Indian Rocks Beach, Florida; Pie In The Sky Coffee and Bakery (“PIE”), located in Woods Hole, Massachusetts; and Schnitzel Haus, a German-themed restaurant located in Hobe Sound, Florida. We operated The Village Bier Garten (“VBG”), a German-themed restaurant in Cocoa, Florida, during fiscal 2024 and closed the restaurant on January 3, 2025.
Burger Time restaurants offer a variety of burgers and other affordable items, including sides and soft drinks. Keegan’s has operated in Indian Rocks Beach, Florida, for more than 35 years and offers a variety of fresh seafood for lunch and dinner, along with beer and wine. PIE offers freshly baked goods, sandwiches, and locally roasted coffee. Schnitzel Haus offers German and American menu items and beer, wine, and cocktails.
Our revenues are derived primarily from the sale of food and beverages at our restaurants. We also generate revenue from retail items at PIE and Keegan’s, including apparel, and from other merchandise, which collectively represent an insignificant portion of total revenue.
Proposed Business Combination with Aero Velocity
On September 2, 2025, BT Brands entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Aero Merger Sub Inc., a Delaware corporation, and a direct, wholly owned subsidiary of BT Brands (“Merger Sub”) and Aero Velocity Inc., a Delaware corporation (“Aero”). Pursuant to the terms of the Merger Agreement, Aero will merge with and into the Merger Sub, with Aero continuing as the surviving corporation (the “Merger”), resulting in a combined entity (the “Merged Company”). The Merger Agreement contemplates a spin-off of shares of a newly formed subsidiary, BT Group, Inc., to BT Brands shareholders. BT Group, Inc., will retain all of BT Brands’ restaurant assets and liabilities, including cash and investments. Management of BT Group, Inc. plans to pursue a listing for BT Group common stock.