BT Brands, Inc. 10-K Summary: Fiscal Year Ended December 28, 2025
Business Context and Reporting Period
This Annual Report covers the fiscal year ended December 28, 2025. BT Brands, Inc. operates a portfolio of restaurant concepts, including six Burger Time locations, Keegan's Seafood Grille, Pie In The Sky Coffee, and Schnitzel Haus. The company also holds a 40.7% non-controlling interest in Bagger Dave's Burger Tavern, Inc. (BDVB). In September 2025, the company entered into a definitive agreement to merge with Aero Velocity Inc., a drone manufacturer, which includes a plan to spin off its restaurant operations into a new entity, BT Group, Inc.
Key Financial Metrics
| Metric | Fiscal 2025 | Fiscal 2024 |
|---|---|---|
| Net Sales | $13,486,629 | $14,823,472 |
| Net Loss | $(687,839) | $(2,311,208) |
| Loss from Operations | $(364,585) | $(1,832,308) |
| Restaurant-Level EBITDA | $1,720,909 | $723,828 |
| Restaurant-Level EBITDA Margin | 12.4% | 4.9% |
| Cash and Marketable Securities | $4,442,300 | $4,270,970 |
| Working Capital | $4,680,411 | $3,556,469 |
| Long-Term Debt (Less Current) | $1,899,592 | $2,091,335 |
| Net Cash Provided by Operating Activities | $284,876 | $(713,505) |
Material Changes Versus Prior Period
- Revenue Decline: Net sales decreased 7.5% to $13.5 million, primarily due to the closure of the Village Bier Garten location in January 2025, which contributed approximately $1.3 million in sales in 2024. Comparable store sales for Burger Time locations declined 3.9% due to reduced traffic.
- Improved Profitability: Net loss improved significantly to $0.69 million from $2.31 million. This was driven by improved restaurant-level margins, cost control initiatives, and the absence of the $371,872 impairment charge recorded in 2024 for Village Bier Garten assets.
- Impairment Charges: The company recorded a $215,000 charge in 2025 related to a lease litigation accrual for the former Village Bier Garten location. Additionally, a $304,000 impairment charge was recorded for the related-party investment in NGI Corporation, and a $216,718 write-down was applied to water bottle inventory acquired from NGI.
- Equity Method Investment: The carrying value of the investment in BDVB was reduced to zero due to cumulative losses recognized in 2025.
Guidance, Outlook, and Risks
- Proposed Business Combination: The company is pursuing a merger with Aero Velocity Inc. Upon completion, BT Brands intends to spin off its restaurant operations into BT Group, Inc. Existing shareholders are expected to retain approximately 11% ownership in the merged entity, facing substantial dilution as Aero shareholders will receive preferred stock representing approximately 89% of the equity.
- Operational Outlook: Management expects to continue focusing on same-store sales growth and cost efficiency within the restaurant portfolio. However, the company faces risks related to labor shortages, wage inflation, and food cost volatility.
- Material Weakness in Internal Controls: Management identified a material weakness in internal control over financial reporting regarding the accounting for significant, nonrecurring events and complex transactions. This weakness originated in 2022 and remains unremediated as of the filing date.
- Litigation: The company is defending a lawsuit from the landlord of the former Village Bier Garten location regarding unpaid rent. A liability of $215,000 has been accrued, though the ultimate outcome is uncertain.
Key Facts for Investor Verification
- Merger Terms: Verify the specific terms of the Aero Velocity merger, including the dilution impact on existing shareholders and the timeline for the spin-off of BT Group, Inc.
- Internal Control Remediation: Review the company's progress in remediating the material weakness in internal controls over financial reporting.
- Litigation Exposure: Monitor the status of the Village Bier Garten lease litigation and potential cash outflows beyond the accrued $215,000.
- Related Party Transactions: Assess the recoverability of the $574,000 water bottle inventory acquired from NGI Corporation and the ongoing relationship with NGI and BDVB.
- Liquidity Post-Spin-off: Evaluate the projected liquidity and capital structure of the standalone BT Group, Inc. following the proposed transaction.