What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-31 · 228 added, 123 removed, 50 unchanged (88% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 is 52/53 weeks long, ending on the Sunday closest to December 31.

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.

Our fiscal year consists of 52 or 53 weeks and ends on the Sunday closest to December 31.

The 52-week fiscal year 2025 ended on December 28, 2025, and the 52-week fiscal year 2024 ended on December 29, 2024.

As of December 29, 2024, including our partially owned Bagger Dave’s business, we owned and operated seventeen restaurants comprising the following:

Seven Burger Time (Net of one unit closed in January 2025) fast-food restaurants (“BTND”);

Village Bier Garten is a German-themed restaurant, bar, and entertainment venue in Cocoa, Florida.

(“VBG”) which was closed January 2, 2025:

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

Six Burger Time (Net of Minot closure July, 2025) fast-food restaurants (“BTND”);

Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”);

1 unchanged sentence

Schnitzel Haus in Hobe Sound, Florida (“Schnitzel”).

Unconsolidated affiliate Bagger Dave’s Burger Tavern, Inc., 39.6% owned and operates six Bagger Dave’s restaurants in Michigan, Ohio, and Indiana (“BDVB”).

In addition, we hold a 40.7% unconsolidated ownership interest in Bagger Dave’s Burger Tavern, Inc., which operates five restaurants.

Burger Time opened its first restaurant in Fargo, North Dakota, in 1987.

Burger Time restaurants feature traditional grilled hamburgers, other affordable foods, and soft drinks.

Burger Time’s operating principles include (i) offering bigger burgers and more value for the money;

(ii) offering a limited menu to permit attention to quality and speed of preparation;

(iii) providing fast service by way of single 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 made fresh to order at a 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.

We operate through a central management organization that provides continuity across our restaurant base by utilizing the efficiencies of a central management team.

Burger Time restaurants feature flame-broiled hamburgers, other quick-service menu items, and soft drinks.

Burger Time’s operating principles emphasize value, a limited menu to support quality and speed of service, efficient single- and double-drive-thru designs supported by point-of-sale systems, and food prepared fresh to order at competitive prices.

The average customer transaction at Burger Time restaurants did not change significantly in fiscal 2025 compared to fiscal 2024, and based on our recent analysis, it is approximately $14.50.

We continually evaluate menu pricing to manage gross margins amid fluctuating input costs.

Our operating environment remains highly competitive, and numerous factors, including consumer demand, pricing sensitivity, competition, and broader economic conditions influence sales trends.

In recent periods, we have also begun evaluating potential growth opportunities outside the restaurant industry as part of our broader effort to enhance shareholder value.

While restaurants remain our primary operating focus, we believe that certain non-restaurant businesses with strong fundamentals and scalable operating models may complement our existing structure.

These efforts remain exploratory and subject to ongoing evaluation.

We operate under a centralized management structure that ensures operational continuity across our restaurant portfolio and enables us to leverage shared services and administrative efficiencies.

Recent Events

Our acquisitions have 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.

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.

Material Trends and Uncertainties

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, our Consolidated Statements of Operations expressed as a percentage of total revenues.

The percentages below may not reconcile because of rounding.

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

The following table presents our consolidated statements of operations expressed as a percentage of sales for the periods indicated.

Percentages may not sum or may be adjusted to reflect the rounding.

52 weeks ended,

8 unchanged sentences

Depreciation and amortization

Impairment of assets

Impairment of restaurant and right-of-use assets

General and administrative

Gain on sale of asset

Gain on sales of assets

Total costs and expenses

2 unchanged sentences

REALIZED GAIN ON MARKETABLE SECURITIES

INTEREST EXPENSE

INTEREST AND DIVIDEND INCOME

EQUITY IN LOSS OF AFFILIATE

INCOME TAX (EXPENSE) BENEFIT

INTEREST EXPENSE

IMPAIRMENT OF RELATED PARTY INVESTMENTS AND RECEIVABLES

EQUITY IN LOSS OF UNCONSOLIDATED AFFILIATE

INCOME TAX EXPENSE

$ (2,311,208 )

Net Revenues:

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.

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.

Restaurant Operating Costs:

In 2024, restaurant operating costs (which refer to all the costs associated with operating our restaurants but do not include general and administrative expenses and depreciation, amortization, and restaurant impairment charges) increased to 95.1% of restaurant sales from 93.9% in 2023.

This increase was due primarily to continued price inflation on input costs, including food and labor, and the matters discussed in the “Cost of Sales,” “Labor Costs,” and “Occupancy and Other Operating Cost” sections below.

The impact of cost increases and the addition, including non-BTND restaurants during the year, may be detailed as follows:

In 2025, restaurant operating costs (which refer to the costs associated with operating our restaurants, excluding general and administrative expenses, depreciation, amortization, and restaurant impairment charges) declined to 87.2% of restaurant sales from 95.1% in 2024.

This decrease was due to the closure of less-profitable locations, improved margins at Pie In the Sky, and the matters discussed in the “Cost of Sales,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections discussed below.

The change in restaurant operating costs from fiscal 2024 to fiscal 2025 is summarized below:

Restaurant operating costs for the period ended December 29, 2024

Increase in food and paper costs

Increase in labor costs

Increase in occupancy and operating cost

Decrease in food and paper costs.

Decrease in labor costs.

Decrease in occupancy and operating cost

Restaurant operating costs for the period ended December 28, 2025

Costs of Sales - food and paper:

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, labor and benefits costs increased to 41.3% of restaurant sales from 38.8% in 2023.

The increase results from higher wages for hourly employees and managers in all of our markets and an unfavorable utilization of the fixed portion of labor costs.

Also, PIE and Keegan’s businesses run higher labor costs than BTND.

In addition, we added a senior culinary person at PIE to focus on new menu development.

Payroll costs are semi-variable, meaning that they do not decrease proportionally to decreases in revenue;

thus, they increase as a percentage of restaurant sales when there is a decrease.

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.

In 2025, labor and benefits costs decreased to 37.9% of restaurant sales from 41.3% in 2024.

The decrease results from the closure of unprofitable locations and a greater focus on controlling labor costs across all locations.

Payroll costs are semi-variable and therefore do not decline proportionally with declining revenues, which can cause labor costs to increase as a percentage of restaurant sales.

Occupancy and Other Operating Costs:

For 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 2025, occupancy and other costs were unchanged at 17.0% of restaurant sales, or $2,160,878, compared to $2,355,806, or in 2024.

Depreciation and Amortization Costs:

For 2024, depreciation and amortization costs increased 24.1%, or $144,320, to $742,860 (5.0% of sales) from $598,540 (4.3% of sales) in 2023.

Depreciation and amortization costs increased as a result of significant capital additions during the year, including the purchase of Schnitzel and the replacement of some hurricane-damaged property at Keegan’s.

For 2025, depreciation and amortization costs decreased 12.7%, or $94,156, to $648,704 (4.5% of sales) from $742,860 (5.0% of sales) in 2024.

The decline in total depreciation is attributable in part to the closing of VBG and the 2024 charge-off of the remaining asset value.

General and Administrative Costs:

General and administrative 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) from Operations:

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:

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):

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.

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.

Loss from Operations:

Loss from operations improved to a loss of $364,585 in fiscal 2025 from a loss of $1.8 million in fiscal 2024.

The fiscal 2024 loss included a $371,872 impairment charge related to Village Bier Garten.

The 2025 loss includes a $215,000 litigation charge related to the closure of the Village Bier Garten and a lease liability dispute.

Operating margins improved across the portfolio, particularly at PIE and Burger Time locations.

Menu changes and improved cost controls increased operating margins at the Burger Time location, as discussed in the “Net Revenues,” “General and Administrative Costs,” and “Restaurant Operating Costs” sections above.

Interest and Other Income (Expense) :

Interest expense increased slightly to $81,261 in fiscal 2025 as a result of ongoing amortization of principal on mortgage notes.

Interest and dividend income declined to $148,666 from $178,279, reflecting lower average invested balances.

Net loss improved to a net loss of $687,839 in fiscal 2025 from a $2.3 million loss in fiscal 2024.

The improvement reflects higher restaurant-level profitability, impairment and lease liability charges of $215,000 in 2025 and a 2024 charge of $371,872 for Village Bier Garten assets, and a lower equity loss from BDVB as the equity in BDVB reached zero.

We also recorded a $216,248 charge to reduce the NGI bottle inventory to its estimated net realizable value of $574,000.

Net loss for 2024 also reflects the impact of fully reserving for deferred tax benefits, resulting in a $206,000 income tax provision in 2024.

Restaurant-level EBITDA :

To supplement the consolidated financial statements, which are prepared and presented in accordance with GAAP, we use restaurant-level EBITDA (earnings before interest, taxes, depreciation, and amortization), which is not a measure defined by GAAP.

This non-GAAP operating measure is useful to both management and, we believe, investors because it represents one means of gauging the overall profitability of our recurring and 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 due to the exclusion of corporate-level expenses.

This non-GAAP operating measure is useful to both management and, we believe, investors because it provides a means to gauge the overall profitability of our recurring, controllable core restaurant operations.

However, this measure is not indicative of our overall results, nor does restaurant-level profit accrue directly to stockholders, primarily because it excludes corporate-level expenses.

Restaurant-level EBITDA should not be considered a substitute for or superior to operating income, which is calculated in accordance with GAAP, and the reconciliations to operating income set forth below should be carefully evaluated.

We define restaurant-level EBITDA as operating income before pre-opening costs, if any, general and administrative costs, depreciation, and amortization.

We define restaurant-level EBITDA as operating income before general and administrative expenses, depreciation and amortization, and restaurant impairment and related charges.

General and administrative expenses are excluded as they are generally unrelated to restaurant-specific costs.

Depreciation and amortization are excluded because they are not ongoing controllable cash expenses and are unrelated to ongoing operations’ health.

Depreciation and amortization are excluded because they are not ongoing controllable cash expenses and are unrelated to the health of ongoing operations.

There were no pre-opening costs in fiscal 2025 or fiscal 2024.

Reconciliation:

2 unchanged sentences

Gain on sale of assets

Impairment of restaurant asset

Restaurant impairment and related charges

General and administrative, corporate-level expenses

2 unchanged sentences

Liquidity and Capital Resources

For the 52 weeks ending December 29, 2024, we recorded an after-tax loss of $2,311,208.

At December 29, 2024, we had $4,270,970 in cash and marketable securities and a net working capital of $3,556,469.

Our primary requirements for liquidity are to fund our working capital needs, capital expenditures, and general corporate needs, as well as to invest in or acquire businesses that are synergistic with our business.

Our operations do not require significant working capital as, generally, restaurants operate with negative working capital.

Our primary sources of liquidity are cash generated from restaurant operations, proceeds from the sale of marketable securities, and existing cash and marketable securities on hand.

Our primary uses of cash are operating expenses, capital expenditures, debt service, transaction-related expenses, and strategic investments.

As of December 28, 2025, we had $4,442,300 in cash and marketable securities and $4,680,411 in working capital, compared to $4,270,970 in cash and marketable securities and $3,556,469 in working capital as of December 29, 2024.

The increase in working capital was primarily attributable to improved operating performance and disciplined capital expenditures during fiscal 2025.

For fiscal 2025, we recorded a net loss of $687,839 compared to a net loss of $2,311,208 in fiscal 2024.

Despite the net loss, operating cash flow improved significantly year over year due to stronger restaurant-level performance.

Our primary liquidity requirements are to fund working capital needs, capital expenditures, and general corporate needs, and to invest in or acquire businesses that are synergistic with our business.

Our operations do not require significant working capital, as restaurants generally operate with negative working capital.

Working capital deficits may be incurred in the future.

Our liquidity and cash flow sources are cash and cash equivalents and marketable securities on hand.

Our liquidity and cash flow sources are cash and cash equivalents and marketable securities.

We have used available cash to make acquisitions, service debt, and maintain our stores.

Our working capital position benefits from the fact that we collect cash from sales from our customers at the point of sale or within a few days from our credit card processor, and in general, payments to our vendors are not due for thirty days.

Our working capital position benefits from the fact that we collect cash from sales to our customers at the point of purchase or within a few days from our credit card processor, and, in general, payments to our vendors are not due for 30 days.

The Company is currently involved in litigation related to a lease dispute at its former Village Bier Garten location in Cocoa, Florida.

As of December 28, 2025, the Company recorded an accrued liability of $215,000 associated with this matter.

While the Company disputes the landlord’s claims and intends to vigorously defend the matter, the timing and amount of any cash outflows related to this litigation remain uncertain.

The Company believes that certain factors, including the landlord’s obligation to mitigate damages and the Company’s potential recovery from the assignee of the lease, may reduce the ultimate amount of any required payments.

However, the resolution of this matter will be determined through litigation or negotiated settlement, and actual cash outflows may differ from the amount currently recorded.

The Company does not currently expect this matter to have a material adverse impact on its overall liquidity position;

however, management will continue to monitor developments and assess the potential impact on future cash flows.

The ultimate capital structure, liquidity profile, and operating model of BT Group will depend on the final terms and structure of the merger and spin-off.

The separation could result in incremental transaction costs, advisory fees, audit and legal expenses, and standalone public company costs, including governance, compliance, and reporting expenses.

In addition, the separation may require the establishment of new credit facilities or other financing arrangements for BT Group, and there can be no assurance regarding the availability or terms of such financing.

We are currently evaluating BT Group’s anticipated working capital needs, capital structure, and ongoing liquidity requirements.

While we expect that existing cash balances and operating cash flow will support near-term operational needs of the restaurant business, completion of the merger and spin-off could materially change our capital allocation strategy, liquidity profile, and risk exposure.

There can be no assurance that the merger will be completed or that the spin-off will occur.

Summary of Cash Flows

Cash Flows Provided by Operating Activities

The operating cash flow in 2024 was negative $723,505 compared to negative $258,787 in 2023, representing a decline in cash flow from operations of $464,719 in 2024.

Cash Flows Used in Investing Activities

In 2024, we acquired the Schnitzel Haus restaurant for $943,000.

In 2023, on a net basis, we sold marketable securities.

The Company used cash of approximately $495,000 in capital improvements at its restaurants.

Proceeds from the sale of trademark assets were $250,000, and we lent $120,000 to NGI Corporation, a related party, in 2024.

Cash Flows from Financing Activities

Cash flow from financing activities reflects a reduction of $440,849.

In 2024, broker margin borrowing of $115,899 was repaid.

Additionally, we spent $142,794 purchasing treasury shares, and $182,156 was used for long-term debt principal payments.

Operating Activities

Net cash provided by operating activities was $284,876 in fiscal 2025, compared to net cash used in operating activities of $284,876 in fiscal 2024.

The improvement was primarily driven by reduced operating losses, improved restaurant-level margins, and the effect of the impairment charge recorded in the prior year.

Restaurant operations typically generate cash quickly due to point-of-sale transactions and short settlement cycles for credit card receipts, while vendor payment terms are generally 30 days.

As a result, our restaurant operations do not require significant working capital investment.

Investing Activities

Cash used in investing activities during fiscal 2025 primarily consisted of net purchases of marketable securities, approximately $172,925 in capital expenditures related to restaurant improvements and equipment upgrades, $380,861 for the purchase of Water Bottle Inventory, loans made to related party and purchase of a secured note totaling approximately $650,000, and proceeds from the sale of property of approximately $550,000.

In fiscal 2024, investing activities included the acquisition of Schnitzel Haus for approximately $943,000 and net purchases of marketable securities.

We expect capital expenditures in fiscal 2026 to consist primarily of maintenance capital, equipment replacement, and operational enhancements.

We do not currently anticipate significant expansionary capital expenditures.

Financing Activities

Cash used in financing activities during fiscal 2025 totaled $329,720 and consisted of scheduled principal payments on long-term debt and $140,450 in payments for deferred transaction costs.

In 2024, cash used in financing activities was $450,849, including $142,794 for share repurchases.

We did not acquire additional treasury shares during fiscal 2025.

Contractual Obligations

As of December 29, 2024, we had $4,048,155 in contractual obligations, including long-term debt and future lease liabilities.

As of December 28, 2025, we had approximately $3.7 million in contractual obligations, including long-term debt and future lease liabilities.

Our monthly required payments total approximately $47,000.

Investment in BDVB

As of December 28, 2025, the carrying value of our equity-method investment in Bagger Dave’s Burger Tavern, Inc.

(“BDVB”) was zero.

We are not obligated to fund additional losses of BDVB and have not guaranteed its indebtedness.

In the future, any decision to advance or guarantee BDVB debt will result in additional equity losses.

Proposed Merger with Aero Velocity and

Planned Spin-Off

In September 2025, we entered into an Agreement and Plan of Merger with Aero Velocity Inc., a private aerospace drone services company.

If completed, the merger will result in a fundamental change in our capital structure and strategic focus.

Pursuant to the Merger Agreement, prior to closing, we intend to spin off our existing restaurant operations into a newly formed entity, (“BT Group, Inc.”) BT Group is expected to retain all of our existing restaurant operations, related assets, cash balances, and liabilities.

Following the spin-off, BT Group would operate as a standalone company.

The proposed merger did not affect our fiscal 2025 liquidity or results of operations.

However, if completed, the transaction will materially alter our capital structure, ownership profile, and financial risk.

The combined post-merger entity is expected to issue convertible preferred stock to Aero stockholders, resulting in significant dilution to existing stockholders and a shift in voting control.

We intend to seek a listing of BT Group’s common stock on a national securities exchange;

however, there can be no assurance that BT Group will meet applicable listing requirements or that such listing will be achieved in a timely manner.

Failure to obtain a listing could adversely affect the liquidity and marketability of BT Group shares.

Completion of the merger and spin-off may result in incremental transaction costs, including advisory, legal, audit, and regulatory expenses.

In addition, BT Group may incur ongoing standalone public company costs, including governance, compliance, and reporting expenses.

The ultimate capital structure and liquidity profile of BT Group and the post-merger entity will depend on the final structure and terms of the transaction.

There can be no assurance that the merger will be completed or that the spin-off will occur.

Capital Allocation

We evaluate capital allocation priorities based on liquidity, operating performance, growth opportunities, and market conditions.

While we have a Board-authorized Share Repurchase Program in place, we did not repurchase shares during fiscal 2025.

Future repurchases, if any, will depend on liquidity, capital requirements, and strategic considerations, including the outcome of the proposed merger.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures.

These estimates are based on historical experience and other assumptions we believe to be reasonable under the circumstances.

Because these estimates involve judgment and are based on currently available information, actual results could differ materially from those estimates.

We believe the following accounting estimates involve a higher degree of judgment and are most critical to understanding our financial condition and results of operations.

Impairment of Long-Lived Assets

We review long-lived assets, including restaurant property and equipment and right-of-use lease assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

Indicators include declining operating performance, negative cash flow trends, store closures, or changes in market conditions.

Recoverability is assessed by comparing the carrying value of the asset group to the estimated undiscounted future cash flows expected to result from its use and eventual disposition.

If the carrying value exceeds estimated undiscounted cash flows, an impairment charge is recorded based on the excess of carrying value over fair value.

These analyses require significant judgment regarding projected sales, operating margins, and terminal values.

Changes in assumptions or operating performance could result in future impairment charges.

During fiscal 2024, we recorded a $371,872 impairment charge related to Village Bier Garten and entered into a lease assignment with a third party and in 2025, following receiving notice of default by the assignee to the lease we recorded a $215,000 charge representing the total amount of unpaid lease payments under the original lease.

Equity Method Investments

We account for our 40.7% ownership interest in Bagger Dave’s Burger Tavern, Inc.

(“BDVB”) under the equity method of accounting.

Under this method, we record our proportionate share of BDVB’s net income or loss and adjust the carrying value of the investment accordingly.

During fiscal 2025, cumulative equity losses reduced the carrying value of our investment in BDVB to zero.

Once an equity-method investment is reduced to zero, we discontinue recognizing additional losses unless we have guaranteed obligations or otherwise committed to providing additional financial support, which we have not done.

Determining whether additional losses should be recognized requires judgment regarding the nature of our involvement and any potential obligations.

We also evaluate equity-method investments for impairment if events or circumstances indicate that the decline in value may be other-than-temporary.

This assessment requires judgment regarding the affiliate’s financial condition and prospects.

Impairment of Related-Party Investment (NGI Corporation)

Prior to 2023, we made a series of equity investments in NGI Corporation (“NGI”), a related party, resulting in an aggregate carrying value of $304,000.

During fiscal 2025, we evaluated the recoverability of this investment.

We determined that indicators of impairment were present, including recurring operating losses at NGI and insufficient capital to sustain operations without continued external financing.

Because there were no observable market transactions or other valuation inputs to support the investment’s carrying value, management concluded that the decline in value was other than temporary.

Accordingly, we recorded a full impairment charge of $304,000 during fiscal 2025.

Following our foreclosure on the water bottle inventory in satisfaction of outstanding loans to NGI, we recorded a $216,718 adjustment to reduce the inventory’s value to its estimated net realizable value of $574,000.

Determining whether an investment is impaired and whether any impairment is other-than-temporary requires significant judgment regarding financial performance, liquidity, and future prospects of the investee.

Changes in these factors could affect the timing and amount of impairment charges.

Contingencies and Litigation Reserve

The Company is involved in a legal dispute with the landlord of its former Village Bier Garten location in Cocoa, Florida.

In connection with the Company’s cessation of operations and subsequent assignment of the lease to a third party in January 2025, the landlord asserted a claim for unpaid rent and other amounts under the lease and initiated litigation against the Company.

As of December 28, 2025, the Company recorded an accrued liability of $215,000, representing the remaining contractual lease payments associated with unpaid rent under the original lease agreement.

The determination of this liability required significant judgment.

In evaluating the appropriate amount to record, management considered the nature of the landlord’s claims, the status of the litigation, and the terms of the underlying lease.

The recorded amount reflects the full contractual lease payments remaining and does not incorporate potential reductions related to the landlord’s obligation to mitigate damages or potential recoveries from the assignee of the lease.

Management believes that certain factors, including the landlord’s acceptance of rent payments from the assignee following the transfer of possession and the landlord’s obligation under Florida law to mitigate damages after regaining possession of the premises, may affect the ultimate amount of damages, if any, that could be recoverable.

Additionally, the Company has asserted a claim against the assignee for approximately $200,000 in unpaid consulting fees, which could offset any amount ultimately owed.

The ultimate resolution of this matter is subject to significant uncertainty and will be determined through litigation or negotiated settlement.

As a result, actual outcomes may differ materially from the amount recorded.

Management will continue to monitor developments in the matter and will adjust the recorded liability as additional information becomes available.

Lease Accounting

We recognize right-of-use assets and lease liabilities for operating leases based on the present value of future lease payments.

Because our leases typically do not provide an implicit rate, we estimate an incremental borrowing rate to discount lease payments.

This rate is based on our estimated secured borrowing rate for a similar term.

Changes in assumptions regarding discount rates, renewal options, or lease terms could materially affect the measurement of lease assets and liabilities.

Marketable Securities Valuation

We hold marketable equity securities that are measured at fair value, with changes in fair value recognized in earnings.

The fair value of these securities is based on quoted market prices.

Market volatility may cause significant fluctuations in unrealized gains and losses, which could materially impact our results of operations in future periods.

Given the marketable securities are liquid and tradable, management does not anticipate any losses on settlement.

We do not believe that fluctuations in value will impact our overall liquidity and available capital resources.

Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, we have elected to comply with certain scaled disclosure reporting obligations and are not required to provide the information required by this item.

Financial Statements and Supplementary Data.

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, we are required to comply with certain scaled disclosure reporting obligations.

We are not required to provide the information required by this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis