BTBD 10-K & 10-Q changes, risk factors and insider trading
BT Brands, Inc. (also BTBDW) · Nasdaq · Retail-Eating Places · CIK 1718224 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The proposed Merger with Aero Velocity may not be completed on the anticipated terms or timeline, or at all.”
New heading “The proposed Merger will fundamentally change the nature of our business, and our historical results will not be indicative of future performance.”
New heading “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.”
New heading “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.”
New heading “We may not realize the anticipated benefits of the proposed business combination, and the merged company may face significant operational, financial, and strategic challenges.”
New heading “The proposed spin-off of BT Group, Inc., may not be completed, may be delayed, or may not achieve its intended objectives.”
New heading “The proposed business combination could expose us to litigation, regulatory scrutiny, and stockholder claims.”
New heading “The combined company may face risks related to continued listing standards and market acceptance following the transaction.”
New heading “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.”
New heading “We may not be able to integrate, operate, or improve acquired businesses effectively.”
New heading “Acquisitions may expose us to unknown liabilities, impairment charges, and other unanticipated consequences.”
New heading “Long-term leases and real estate commitments may create fixed obligations that could adversely affect our financial performance.”
New heading “If we grow rapidly, we may not be able to manage that growth effectively.”
New heading “Our evaluation of growth opportunities outside the restaurant industry may expose us to additional risks and uncertainties that could adversely affect our business.”
New heading “Cost increases could adversely affect our operating margins and financial performance.”
New heading “Labor shortages, wage inflation, and changes in employment laws could increase costs and disrupt operations.”
New heading “Food safety incidents or perceived food safety issues could harm our brand and the results of our operations.”
New heading “Unfavorable publicity, including through social media, could harm our brands and reduce customer traffic.”
New heading “Risks Related to Health Emergencies”
New heading “Risks Related to Information Technology, Cybersecurity, and Data Privacy”
New heading “Cybersecurity incidents could result in operational disruption, reputational harm, and liability.”
New heading “Litigation and regulatory proceedings could be costly and could adversely affect our business.”
New heading “Regulatory changes and shifting consumer health preferences could require updates to menu disclosures and adversely affect demand.”
New heading “Regional economic conditions and events could adversely affect our results due to geographic concentration.”
New heading “Activist stockholders could adversely affect our business and results of operations.”
New heading “The market price of our common stock may be volatile, and you may lose all or part of your investment.”
New heading “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.”
Removed heading “Health emergencies may adversely impact our business.”
Removed heading “Acquiring or opening new restaurants is subject to risks and challenges.”
Removed heading “The acquisition of existing restaurants is risky and could negatively impact our financial results.”
Removed heading “Acquisitions may have unanticipated consequences that could harm our business and our financial condition.”
Removed heading “Failure to manage new restaurants properly could negatively impact our operations and deplete our capital resources.”
Removed heading “Rising interest rates could negatively impact our performance and acquisition plans.”
Removed heading “We may enter into additional long-term, non-cancellable leases.”
Removed heading “Difficulties managing our growth could adversely affect operations.”
Removed heading “Risks Related to the Nature of Our Business and Operating in the Restaurant Industry”
Removed heading “Our inability to compete effectively may affect sales and restaurant-level profit margins, adversely affecting our results of operations.”
Removed heading “Our inability to raise menu prices could result in a decline in profitability.”
Removed heading “Public attitudes regarding diet and health could result in new regulations influencing consumers.”
Removed heading “Unfavorable publicity could reduce sales at our restaurants.”
Removed heading “Food safety concerns could harm our business by reducing demand and increasing costs.”
Removed heading “Risks Related to Inflation, Labor and Supply Chain”
Removed heading “Increased commodity, energy and other costs could decrease our restaurant-level profit margins.”
Removed heading “Shortages or interruptions in the supply or delivery of fresh food products could adversely affect our operating results.”
Removed heading “We rely on certain suppliers and distributors for all our supplies.”
Removed heading “The inability to attract, train and retain personnel could adversely impact our business and financial results.”
Removed heading “Unionization activities or labor disputes could disrupt our operations and affect our profitability.”
Removed heading “Security breaches of customer information due to cyber-attacks may adversely affect our business.”
Removed heading “The display of nutritional information could affect consumer preferences and negatively impact the results of our operations.”
Removed heading “New information or attitudes regarding diet and health could result in changes in regulations and consumer eating habits that could adversely affect our revenues.”
Removed heading “Restaurant companies have been the target of allegations of violations of employment laws.”
Removed heading “We are susceptible to regional economic developments.”
Removed heading “Our marketing programs may not be successful.”
Removed heading “Our business could be negatively affected by the actions of activist stockholders.”
Removed heading “You may be unable to resell your shares at or above the price you paid.”
Removed heading “Our board of directors is authorized to issue preferred stock without obtaining stockholder approval.”
Largest changes
“Risks Related to Inflation, Labor and Supply Chain”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
“Our business is subject to the risk of litigation by employees, consumers, suppliers, stockholders or others through private actions, class actions, administrative proceedings, regulatory actions, or other litigation. The outcome of litigation, particularly class action and regulatory actions, is difficult to assess or quantify. In recent years, restaurant companies have been subject to lawsuits, including class action lawsuits, alleging violations of federal and state laws regarding workplace and employment matters, discrimination, and similar matters.”see in full comparison
“Labor shortages, wage inflation, and changes in employment laws could increase costs and disrupt operations.”see in full comparison
“The impact of current laws and regulations, the effect of future changes in laws or regulations that impose additional requirements and the consequences of litigation relating to current or future laws and regulations, or our inability to respond effectively to significant regulatory or public policy issues, could increase our compliance and other costs of doing business and, therefore, hurt our results of operations. …”see in full comparison
Full comparison: every changed paragraph (188)
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 athe HealthProposed EmergencyBusiness 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.
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.
Health emergencies may adversely impact our business.
Government responses to health emergencies have significantly impacted the economy. Although our business did not experience significant adverse effects during the peak of COVID-19, its variants or another virus could negatively affect our business. Possible outcomes include declines in customer traffic at our restaurants, our inability to staff our restaurants fully, and, in more severe cases, a temporary restaurant closure, difficulty in our ability to obtain supplies, and increased commodity costs, possibly for prolonged periods of time.
The impact of health emergencies on our business, markets, supply chain, customers, and workforce is contingent upon unpredictable future developments, which may significantly influence our business operations, liquidity, financial condition, and overall performance.
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.
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.
Acquiring or opening new restaurants is subject to risks and challenges.
We expect to face challenges if we acquire or open new restaurants; many of these challenges pose risks that are beyond our control, including, but not limited to, our ability to acquire locations at a favorable cost, the expense and other factors involved in remodeling or updating locations, hiring managerial personnel and our lack of familiarity with local regulations. Any of these challenges, as well as others we may have yet to identify, could result in significant unanticipated costs being incurred.
As discussed throughout this Annual Report, difficulties of integration include coordinating and consolidating geographically separated systems and facilities, integrating the management and personnel of the acquired brands, maintaining employee morale and retaining key employees, implementing our management information systems and financial accounting and reporting systems, establishing and maintaining effective internal control over financial reporting, and implementing operational procedures and disciplines to control costs and increase profitability. In addition, we must have the liquidity to nurture our acquisitions financially. Given the numerous factors involved, we may not be able to identify and secure attractive restaurant acquisitions successfully, and following an acquisition, we may not be able to successfully operate the acquired business, which could have a material adverse effect on our business, financial condition, and results of operations.
If we acquire additional restaurant businesses, the integration and operation of acquisitions may place significant demands on our management, adversely affecting our ability to manage our existing restaurants. In addition, we may be required to obtain additional financing to fund future acquisitions, and there can be no assurance that we can acquire additional financing on acceptable terms or at all.
There are numerous factors involved in identifying, evaluating, and securing restaurant acquisition, including:
The acquisition of existing restaurants is risky and could negatively impact our financial results.
We are evaluating our strategy of expanding our business by acquiring existing restaurant businesses. In the event we make restaurant acquisitions in the future, any such business may be in geographic regions in which we have not operated and may offer food concepts significantly different from our existing business. Our strategy to pursue expansion through the acquisition of existing restaurant businesses is subject to risks and uncertainties, including all the risks of our current operations as outlined in this Annual Report and other factors, including:
These factors, among the many other risks and uncertainties typically associated with acquisitions of existing businesses, could negatively impact our Company, which would have a material adverse effect on our business, financial condition, and results of operations.
Acquisitions may have unanticipated consequences that could harm our business and our financial condition.
Any acquisition that we pursue, whether completed or not, involves risks, including:
Future acquisitions may be through a cash purchase transaction, the issuance of our equity securities, or a combination of both, which could result in potentially dilutive issuances of our equity securities. Alternatively, we may incur debt and assume contingent liabilities, which could harm our business and financial condition.
Failure to manage new restaurants properly could negatively impact our operations and deplete our capital resources.
Though we expect to retain key personnel of any existing restaurant group to assist with managing the restaurants, we may not be able to retain such personnel for any meaningful period. Moreover, even if we retain management from the acquired business, our executive officers may not manage the new restaurants profitably for numerous reasons, including our inability to predict consumer preferences and trends that drive the success of these types of restaurants. Any failure to effectively manage the restaurants comprising an acquired restaurant group could, among other negative effects, adversely impact our operations and deplete our capital resources, affecting our financial condition and the market price for our common stock.
Our growth strategy requiresmay substantialrequire additional capital to execute, whichthat may not be available.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 depends principally on acquiring new restaurants and operating those restaurants on a profitable basis. The cost of acquiring a business will be based on several factors, including the number of restaurants comprising the group and their profitability, and we may not have the resources to fund desirable acquisitions. If we require additional capital to continue our growth plans, we may seek to raise capital through equity or debt financing. If we raise additional funds through issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any future debt financing secured by us could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, making it more difficult for us to obtain additional capital and pursue business opportunities, including making further attractive acquisitions or opening new restaurants. Moreover, if we issue debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets. In addition, we might not be able to obtain additional financing on terms favorable to us, if at all. If we cannot obtain adequate financing on satisfactory terms, our ability to support our business growth and respond to business challenges could be significantly limited.
Rising interest rates could negatively impact our performance and acquisition plans.
Rising interest rates could significantly increase our borrowing costs or make it difficult or impossible for us to obtain financing in the future. An increased cost of borrowing would make it more expensive for us to borrow funds to acquire new businesses and negatively impact our results of operations. If we cannot obtain financing in the future, our growth could be affected.
Our growth strategy may divert management’s attention from operating our existing restaurants.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.
As we grow, management will be focused on the numerous complex and time-consuming activities required to acquire or open new restaurants and to integrate and operate an existing restaurant group. These activities may divert management’s attention from our existing restaurants, and our existing restaurants may suffer. Implementing our growth strategies may reduce the time available to manage our current restaurants, potentially harming our revenue, business, financial condition, and operations.
Management's Discussion & Analysis (MD&A)
New heading “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.”
New heading “Fiscal 2025 Compared to Fiscal 2024”
New heading “Restaurant Impairment and Related Charges:”
New heading “Investment in BDVB”
New heading “Planned Spin-Off”
New heading “Capital Allocation”
New heading “Critical Accounting Estimates”
New heading “Impairment of Long-Lived Assets”
New heading “Equity Method Investments”
New heading “Impairment of Related-Party Investment (NGI Corporation)”
New heading “Contingencies and Litigation Reserve”
New heading “Lease Accounting”
New heading “Marketable Securities Valuation”
Removed heading “The following discussion of our financial condition and results of operation should be read in conjunction with the financial statements and related notes that appear elsewhere in this Annual Report. This discussion contains forward-looking statements and information relating to our business that reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.”
Removed heading “Results of operations for the 52 weeks ending December 29, 2024, compared to the 52 weeks ending December 31, 2024.”
Removed heading “Interest expense:”
Removed heading “Net Income (loss):”
Largest changes
“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. …”see in full comparison
“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.”see in full comparison
“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.”see in full comparison
“Impairment of Related-Party Investment (NGI Corporation)”see in full comparison
“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. …”see in full comparison
Full comparison: every changed paragraph (115)
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.
The following discussion of our financial condition and results of operation should be read in conjunction with the financial statements and related notes that appear elsewhere in this Annual Report. This discussion contains forward-looking statements and information relating to our business that reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Our fiscal year isconsists of 52/ or 53 weeks long,and endingends on the Sunday closest to December 31. The 52-week fiscal year 20242025 ended on December 29,28, 2024,2025, and the 52-week fiscal year 20232024 ended on December 31,29, 2023.2024.
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
In addition, we hold a 40.7% unconsolidated ownership interest in Bagger Dave’s Burger Tavern, Inc., which operates five restaurants.
As of December 29, 2024, including our partially owned Bagger Dave’s business, we owned and operated seventeen restaurants comprising the following:
Burger Time opened its first restaurant in Fargo, North Dakota, in 1987. Burger Time restaurants feature traditional grilledflame-broiled hamburgers, other affordablequick-service foods,menu items, and soft drinks. Burger Time’s operating principles includeemphasize (i) offering bigger burgers and more value for the money; (ii) offeringvalue, a limited menu to permit attention tosupport quality and speed of preparation;service, (iii)efficient providingsingle- fastand servicedouble-drive-thru designs supported by waypoint-of-sale of singlesystems, and double drive-thru designs and a point-of-sale system that expedites the ordering and preparation process, and (iv) great tasting and quality food madeprepared fresh to order at acompetitive fair price The average customer transaction at Burger Time restaurants in the year decreased slightly in 2024 compared to 2023 and is currently about $14.50. We are constantly reviewing menu prices to maintain gross margins during recent periods of accelerating inflation. Many factors influence our sales trends. Our business environment is challenging as competition is intense.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 throughunder a centralcentralized management organizationstructure that providesensures operational continuity across our restaurant baseportfolio byand utilizingenables theus efficienciesto ofleverage ashared centralservices managementand team.administrative efficiencies.
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.
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.
Our acquisitions have allowed us to diversify our operations into new restaurant segments and new geographic regions, reducing our dependency on the financial performance of our Burger Time restaurants. In 2024, we acquired the Schnitzel Haus restaurant, and in 2022, we purchased three operating restaurants and now own a 39.6% interest in BDVB, an operator of six casual restaurants. In May of 2024, we purchased the Schnitzel Hause restaurant. We may consider and evaluate additional acquisition opportunities in the future. Due to the underperformance of our Village Bier Garten restaurant relative to our expectations, we made the decision early in 2025 to close the business. We own 39.6% of the publicly held Dave’s Burger Tavern, Inc., the owner and operator of six Bagger Dave’s restaurants, a casual restaurant and bar concept. Bagger Dave’s provides an inviting, entertaining atmosphere specializing in burgers, hand-cut fries, craft beer, milkshakes, salads, pizza, and other items. Bagger Dave’s opened its first restaurant in Berkley, Michigan, in January 2008 and operates four restaurants in Michigan, one restaurant in Ft. Wayne, Indiana, and one location in Centerville, Ohio. In January 2025, Bagger Dave’s closed a unit in Chesterfield, Michigan. We are currently exploring the sale of all of Bagger Dave’s restaurant locations.
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.
Fiscal 2025 Compared to Fiscal 2024
Industry trends have a direct impact on our business. Current trends include difficulties attracting food service workers and rapid inflation in the cost of input items. Recent trends also include the rapidly changing areas of technology and food delivery. The major companies in the restaurant industry have rapidly adopted and developed smartphone and mobile delivery applications, have aggressively expanded drive-through operations, and developed loyalty programs and database marketing supported by a robust technology platform. We expect these trends to continue as restaurants aggressively compete for customers. Competitors will continue to discount prices through aggressive promotions.
Food costs have increased over the last two years, and we expect to see continued inflationary pressure during 2024. Beef and egg costs continued to increase in 2024, and we expect costs to continue to be volatile in 2024. Given the competitive nature of the restaurant industry, it may be challenging to raise menu prices to fully cover cost increases. Future margin improvements may be difficult to achieve. Margin improvement will be achieved through operational enhancements, equipment advances, and increased volumes offsetting food cost increases.
Labor is a critical factor in operating our stores. Securing staff to run our locations has been more challenging in most areas where we operate our restaurants. The current labor market has resulted in higher wages as the competition for employees intensifies, not only in the restaurant industry but in practically all retail and service industries. We must develop and retain quality employees.
We cannot determine the future effects of any public health matters on our operations and financial results. We have and could continue to experience the impact of recent events, including but not limited to commodity inflation, disruption in our supply chain, and labor availability challenges at certain shops. We have increased and plan to continue raising prices to offset additional costs due to a higher inflationary economic environment in the U.S. These price increases may not be sufficient to mitigate higher costs, and further increases may negatively impact consumer behavior.
Results of operations for the 52 weeks ending December 29, 2024, compared to the 52 weeks ending December 31, 2024.
The following table sets forth, for the years indicated,presents our Consolidatedconsolidated Statementsstatements of Operationsoperations expressed as a percentage of totalsales revenues.for Thethe percentagesperiods belowindicated. Percentages may not reconcilesum becauseor ofmay be adjusted to reflect the rounding.
Net RevenuesSales:
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.
Net sales for 2024 increased $746,819, or 5.3%, to $14,823,472 from $14,076,653 in 2023. Schnitzel Haus, acquired in May 2024, contributed $710,000 in sales to the overall increase in revenue. Also contributing to the overall sales increase was an increase of approximately 7% at BTND locations, offsetting the effects of closing a location in Sioux Falls, South Dakota, early in the year and the conversion of the Ham Lake franchise unit to Burger Time, resulted in two-month closure of the location. PIE also contributed to the sales increase during the year, with a 19% increase in sales in 2024.
For BTND locations open at year-end, 2024 restaurant sales ranged from a low of $567,000 to a high of $1,176,000. The average sales for each Burger Time unit open at year-end were approximately $926,000 in 2024, an increase of approximately 12.8% from $821,000 in 2023.
In 2024,2025, restaurant operating costs (which refer to all the costs associated with operating our restaurantsrestaurants, but do not includeexcluding general and administrative expenses andexpenses, depreciation, amortization, and restaurant impairment charges) increaseddeclined to 95.1%87.2% of restaurant sales from 93.9%95.1% in 2023.2024. This increasedecrease was due primarily to continuedthe priceclosure inflationof onless-profitable inputlocations, costs,improved includingmargins foodat andPie labor,In the Sky, and the matters discussed in the “Cost of Sales,” “Labor Costs,” and “Occupancy and Other Operating CostCosts” sections discussed below.
The change in restaurant operating costs from fiscal 2024 to fiscal 2025 is summarized below:
The impact of cost increases and the addition, including non-BTND restaurants during the year, may be detailed as follows:
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.
The cost of food and paper sales for 2024 decreased to 37.8% of restaurant sales from 39.8% in 2023. The decrease is the net result of menu price increases at all locations during the year, offset by a moderate inflationary cost environment, where we saw a slight rise in beef and paper and lower costs for some other items. Because of its coffee-focused menu, PIE has significantly lower food and paper costs than our other restaurants.
In 2024,2025, labor and benefits costs increaseddecreased to 41.3%37.9% of restaurant sales from 38.8%41.3% in 2023.2024. The increasedecrease results from higherthe wagesclosure forof hourlyunprofitable employeeslocations and managersa ingreater allfocus ofon our markets and an unfavorable utilization of the fixed portion of labor costs. Also, PIE and Keegan’s businesses run highercontrolling labor costs thanacross BTND.all In addition, we added a senior culinary person at PIE to focus on new menu development.locations. Payroll costs are semi-variable,semi-variable meaningand that theytherefore do not decreasedecline proportionally with declining revenues, which can cause labor costs to decreases in revenue; thus, they increase as a percentage of restaurant sales when there is a decrease.sales.
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.
For 2024, occupancy and other costs increased to 16.0% of sales, or $2,355,806, compared to $2,154,611, or 15.3% of restaurant sales in 2023, principally as a result of the addition of Schnitzel Haus as a leased location during the year.
For 2024,2025, depreciation and amortization costs increaseddecreased 24.1%,12.7%, or $144,320,$94,156, to $648,704 (4.5% of sales) from $742,860 (5.0% of sales) fromin $598,5402024. (4.3%The decline in total depreciation is attributable in part to the closing of sales) in 2023. Depreciation and amortization costs increased as a result of significant capital additions during the year, including the purchase of SchnitzelVBG and the replacement2024 charge-off of somethe hurricane-damagedremaining propertyasset at Keegan’s.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.
General and administrative costs in 2024 declined as a percentage of sales with an overall increase of 2.5%, or $40,649, to $1,691,404 (11.4% of sales) from $1,650,755 (11.7% of sales) in 2023.
Income (loss)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.
The loss from operations was $1,832,108 in 2024 compared to a loss from operations of $1,072,589 in 2023. A significant portion of the increase in the loss was the result of the impairment charge related to the continuing poor results at VBG, leading to the decision to close the location in 2025 as a result of recording an impairment charge of $371,872, which is included in costs and expenses. PIE profitability declined because costs increased faster than menu prices. PIE also invested in additional staffing and culinary leadership, focusing on broadening the menu to increase business in the afternoons and evenings. The change in income from operations in 2024 compared to 2023 reflects a $250,000 gain on the sale of a trademark asset and was also due to the matters discussed in the “Net Revenues,” “General and Administrative Costs,” and “Restaurant Operating Costs” sections above.
Interest expense:
In 2024, our interest expense increased $2,298 to $99,906 (0.7% of restaurant sales) from $97,608 (0.7% of restaurant sales) in 2023 due to additional margin interest costs offset by schedule amortization reducing loan balances, resulting in a lower interest cost.
Interest and Dividends 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.
Interest and dividend income was $178,279 in 2024, a decline from $300,923 in 2023, due to a lower average cash and investment balance in 2024, when more short-term assets were invested in non-dividend or interest-earning investments.
Net Income (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.
The net loss was $2,311,208 in 2024 compared to a loss of $887,368 in 2023. The increase in the net loss in 2024 from 2023 reflects the impact of an increase in the share of loss from Bagger Dave’s to $415,085 from $347,081 in 2023. The impact of fully reserving for deferred tax benefits resulted in a $206,000 income tax provision in the year. The increase in the loss from 2023 also reflects the $371,872 impairment charge related to VBG. The net loss was also attributable to the matters discussed in the “Net Revenues,” “Restaurant Operating Costs,” “General and Administrative Costs,” and “Other Income” sections.
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 representsprovides onea means ofto gauginggauge the overall profitability of our recurring andrecurring, controllable core restaurant operations. However, this measure is not indicative of our overall results, nor does restaurant-level profit accrue directly to the benefit of stockholders, primarily duebecause toit the exclusion ofexcludes 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 pre-opening costs, if any, general and administrative costs,expenses, depreciation,depreciation and amortization.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’operations. health.There were no pre-opening costs in fiscal 2025 or fiscal 2024.
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.
What changed in the latest 10-Q
Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Results of Operations for the Twenty-Six Weeks Ended June 28, 2026, and the Twenty-Six Weeks Ended June 29, 2025”
New heading “Costs of Sales - food and paper:”
New heading “Occupancy and Other Operating Expenses:”
New heading “Depreciation and Amortization Expense:”
New heading “General and Administrative Costs:”
New heading “Loss from operations:”
New heading “Restaurant-level EBITDA:”
Largest changes
“Results of Operations for the Twenty-Six Weeks Ended June 28, 2026, and the Twenty-Six Weeks Ended June 29, 2025”see in full comparison
Full comparison: every changed paragraph (51)
As of MarchJune 29,28, 2026, 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. BT Brands owned restaurant portfolio consisted of nine restaurant locations, comprised of
We estimate that the average customer transaction at Burger Time restaurants did not change significantly in the first fiscaltwo quarterquarters of 2026 compared to fiscal 2025, and based on our analysis, it is approximately $14.50.$18. 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.
Results of Operations for the Thirteen Weeks Ended MarchJune 29,28, 2026, and the Thirteen Weeks Ended MarchJune 30,29, 2025
Net lossincome for the thirteen weeks ended MarchJune 29,28, 2026, was $751,011,$576,433, compared to a net loss of $329,849$55,031 for the prior year period. The increase in net lossincome was primarily attributable to an unrealized lossgain of $435,615$829,976 on marketable securities during the current period, compared to an unrealized lossgain of $44,024$82,128 in the prior year period. The Company also recognized a realized loss on investments of $79,395 during the current period, compared to a realized gain of $95,038 in the prior year period.
Changes in the fair value of our marketable securities can result in significant unrealized gains or losses from period to period. Unrealized gains and losses are non-cash and do not affect cash flows unless and until the applicable securities are sold.
The Company also recorded a write down on its inventory of bottled water of approximately $174,000 in the 13-week period ended June 28, 2026.
These investment-related losses are primarily driven by changes in the market value of publicly traded securities and are non-cash in nature with respect to unrealized losses. Excluding the impact of investment gains and losses,losses and the write down of the inventory of bottled water held for sale, the Company’s operating results improved compared to the prior year period, reflecting reduced general and administrative expenses and lower food costs at Burger Time.
Net sales for the firstsecond fiscal quarter of 2026 decreased by $387,439approximately $229,000 to approximately $2.8$3.6 million from $3.2$3.8 million in fiscal 2025. The decrease resulted from a decline in Burger Time sales during the quarter, including the closure of the Minot Burger Time location in mid-2025. Minot contributed $121,000 to the first quarter 2025 revenue.
Restaurant unit sales for Burger Time over 13 weeks ranged from approximately $137,000 to approximately $247,000. The average sales for each Burger Time unit were approximately $179,000 in 2026, approximately $51,000 below the same period in 2025.
The costCost of sales— – food and paper— – for the firstsecond quarter of fiscal 2026 decreased as a percentage of restaurant sales to 33.9%31.9% from 37.1%33.1% in the firstsecond quarter of fiscal 2025. This decrease was the result of menu changes, including the switch to “hand-cut” fries at Burger Time, combined with only moderate inflationary pressures on food costs.
Restaurant operating costs (which refer to all costs associated with the operation of our restaurants, excluding general and administrative expenses and depreciation and amortization) as a percentage of restaurant sales increased slightlydecreased to 90.6%83.0% in the fiscalsecond quarter of 2026 from 90.2%84.1% in the comparable period of fiscal 2025. The increasedecrease resulted from the net effect of higher labor cost as the fixed components, including minimum staffing levels, increased as a percentageconcerted ofeffort salesto monitor scheduling and loweractual foodhours andacross paperall costs resulting from menu changes,locations, as well as the matters discussed in the “Cost of Sales - food and paper,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections above and below.
Labor Costs:
For the firstsecond quarter of fiscal 2026, labor and benefits costs increaseddecreased as a percentage of restaurant sales to 39.1%35.4% from 37.7%36.4% in fiscal 2025. The increasedecrease resultsresulted from lower sales, including the impact of minimum staffing levels, which were offset by a concerted effort to monitor scheduling and actual hours across all locations.
Occupancy and Other Operating Expenses:
For the first fiscalsecond quarter of 2026, occupancy and other expenses increased to 17.6%15.8% of sales from 15.4%14.7% in 2025, due to the impact of a sales decrease on fixed costs.
For the first fiscalsecond quarter of 2026, depreciation and amortization expenses were $151,575 (5.3%4.3% of sales), aan slight decreaseincrease from the prior year of $156,395$144,725 (4.8%3.8% of sales). The resultincrease is partlyprimarily due to adepreciation largerassociated sharewith ofasset BTNDpurchases assetsmade becomingin fullythe depreciated.2026 period.
General and Administrative Costs:
General and administrative costs in the first fiscalsecond quarter of 2026 were $348,901,$333,675, a decrease of $102,133approximately $197,000 from the previous year’s firstsecond quarter of $451,034.$531,057. General and administrative costs were 12.3%9.4% of sales, a decrease from 14.0%14.1% in the previous year. The decrease is the result of a concerted cost-reduction effort throughout the Company.
Income (Loss) from Operations:
TheIncome from operations in the second quarter of 2026 was $117,205, as compared to a loss from operations for the first quarter of fiscal 2026 improved to a loss of $232,811 from a loss of $292,196$75,121 in the firstsecond quarter of 2025, reflecting primarily lower general and administrative expenses and cost-cutting in virtually all other areas of the Company’s businesses, the closing of an unprofitable location, and the items discussed in the “Net Revenues” and “Restaurant Operating Costs” sections above.
Results of Operations for the Twenty-Six Weeks Ended June 28, 2026, and the Twenty-Six Weeks Ended June 29, 2025
The following table sets forth our Condensed Statements of Operations and percentages of total sales for the twenty-six-week fiscal periods. The percentages below may not reconcile because of rounding.
Net loss for the twenty-six weeks ended June 28, 2026, was $174,578, compared to a net loss of $274,818 for the prior year period. The reduction in net loss was primarily attributable to an unrealized gain of $399,190 on marketable securities during the current period, compared to an unrealized gain of $38,104 in the prior year period.
Changes in the fair value of our marketable securities can result in significant unrealized gains or losses from period to period. Unrealized gains and losses are non-cash and do not affect cash flows unless and until the applicable securities are sold.
The Company also recorded a write down on its inventory of bottled water held for sale of approximately $174,000 in the twenty-six-week period ended June 28, 2026.
Excluding the impact of investment gains and losses and the write down of the inventory of bottled water held for sale, the Company’s operating results improved compared to the prior year period, reflecting reduced general and administrative expenses and lower food costs at Burger Time.
Sales:
Net sales for the twenty-six week period ended June 28, 2026 decreased by approximately $616,000 to approximately $6.4 million from $7.0 million in fiscal 2025. The decrease resulted from a decline in Burger Time sales during the 2026 period as compared to the 2025 period, as well as the closure of the Minot Burger Time location in mid-2025.
Our various restaurants each experience unique seasonal sales patterns. The first quarter is seasonally slower for BTND and PIE. PIE revenues are significantly higher in the second and third quarters of the year, resulting from tourist traffic in the Cape Cod area. In 2025, approximately 40% of sales occurred during the seasonally strong third quarter.
Costs of Sales - food and paper:
Cost of sales – food and paper – decreased as a percentage of restaurant sales to 32.8% from 34.9% in the comparable 2025 period. This decrease was the result of menu changes, including the switch to “hand-cut” fries at Burger Time, combined with only moderate inflationary pressures on food costs.
Restaurant-levelRestaurant EBITDAOperating Costs:
Restaurant operating costs (which refer to all costs associated with the operation of our restaurants, excluding general and administrative expenses and depreciation and amortization) as a percentage of restaurant sales increased slightly to 87.1% from 86.9% in the comparable period of fiscal 2025. The increase resulted from the net effect of higher labor cost as the fixed components, including minimum staffing levels, increased as a percentage of sales early in the 2026 period, and lower food and paper costs resulting from menu changes, as well as the matters discussed in the “Cost of Sales - food and paper,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections below.
Labor Costs:
Labor and benefits costs increased slightly as a percentage of restaurant sales to 37.1% from 37.0% in the comparable 2025 period. The increase resulted from lower sales, including the impact of minimum staffing levels, which were offset by a concerted effort to monitor scheduling and actual hours across all locations.
Occupancy and Other Operating Expenses:
Occupancy and other expenses increased to 17.2% of sales from 15.0% in 2025, primarily due to the impact of a sales decrease on fixed costs.
Depreciation and Amortization Expense:
Depreciation and amortization expenses were $303,151 (4.7% of sales), a slight increase from the prior year of $301,120 (4.3% of sales).
General and Administrative Costs:
General and administrative costs were $669,165, a decrease of approximately $313,000 from the comparable period in 2025 of $982,091. General and administrative costs were 10.5% of sales, a decrease from 14.0% in the previous year. The decrease is the result of a concerted cost-reduction effort throughout the Company.
Loss from operations:
The loss from operations improved to a loss of $147,145 from a loss of $367,317 in the comparable period in 2025, reflecting lower general and administrative expenses and cost-cutting in virtually all other areas of the Company’s businesses, the closing of an unprofitable location, and the items discussed in the “Net Revenues” and “Restaurant Operating Costs” sections above.
Restaurant-level EBITDA:
To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, the Company uses restaurant-level EBITDA. Restaurant-level EBITDA, whichEBITDA is not a measure defined by GAAP. This non-GAAP operating measure is useful to both management and, we believe, investors because it represents one means of gauging the overall profitability of our recurring and controllable core restaurant operations. This measure is not indicative of our overall results, nor does restaurant-level profit accrue directly to stockholders, primarily because corporate-level expenses are excluded. Restaurant-level EBITDA should not be considered a substitute or superior to operating income calculated under GAAP. The reconciliations to operating income set forth below should be carefully evaluated.
Recently, sales at our Burger Time business have declined. For the 13 weeks ended March 29, 2026, the restaurant’s EBITDA declined slightly from 2025 levels. We had $3.6$4.4 million in cash and marketable securities and net working capital of $3.9$4.5 million, which is a decrease of approximately $714,000$200,000 from what we had in net working capital as of December 28, 2025. The Company maintains a portfolio of marketable securities, the value of which is subject to market volatility. As a result, the Company may continue to recognize significant unrealized gains or losses in future periods, which could materially impact reported net income but would not directly affect cash flows unless such investments are sold.
WeAlthough anticipatewe thathad approximately $4.5 million of working capital deficitsat June 28, 2026, our working capital may befluctuate incurredbased on operating performance, investment activity, capital expenditures, acquisitions and possiblyother increase.strategic transactions. Our primary sources of liquidity and cash flow are operating cash flows and cash on hand. We use this to service debt, maintain our stores’ efficient operations, and increase our working capital. Our working capital position benefits from the fact that we collect cash from our customers at the point of purchase or within a few days through our credit card processor; generally, payments to our vendors are not due for 30 days.
Cash Flows UsedProvided inby Operating Activities
Operating cash flow for the thirteen26 weeks ending MarchJune 29,28, 2026, was aapproximately negative$117,000. $97,650. Seasonal patterns in our business typically result in negativeThe cash flowflows fromprovided by operating activities inwere mainly the first quarterresult of improved restaurant performance during the year.year due to lower overall costs relative to revenue as discussed above.
Cash flow from investing activities is primarily the net result of our short-term investments. We have continued to improve our existing businesses, and we may pursue acquisitions in the food service and related industries, as well as other potential mergers.
As of MarchJune 29,28, 2026, we had $3.6$3.5 million in contractual obligations, including $2.1$2.0 million for amounts due under mortgages on the real property on which our stores are situated and $1.5 million in operating lease obligations related to our recent acquisitions. Our monthly required payments on lease and mortgage obligations are approximately $53,000.
BTBD insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding BTBD (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 45,582 | $48.8K | 0.0% | New position |
| Two Sigma Investments | 2026-06-30 | 19,699 | $21.1K | 0.0% | Added 74% |