Item 1. Business
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:
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Six Burger Time fast-food restaurants are located in the North Central region of the United States (collectively, “BTND”). A Sioux Falls, South Dakota, Burger Time closed in 2024, a location in Ham Lake, Minnesota, closed at the end of 2024, and a location in Minot, North Dakota, closed in July 2025;
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Keegan’s Seafood Grille is a casual seafood restaurant located in Indian Rocks Beach, Florida;
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Pie In The Sky Coffee, a coffee shop and bakery located in Woods Hole, Massachusetts, and
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Schnitzel Haus is a German-themed fine dining restaurant and bar in Hobe Sound, Florida (“Schnitzel”).
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:
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the value proposition when comparing the purchase price to the potential return on our investment;
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established, recognized brands within a geographic footprint;
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a historical record of consistent and growing cash flow;
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record of operating performance;
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sustainable operating results;
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geographic diversification: and
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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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