BT Brands Swings to Profit Amid Sales Dip, Strategic Shifts

TL;DR

**BT Brands' profit is a mirage, driven by investment gains, not core restaurant sales – sell the rally.**

AI Summary

BT Brands, Inc. reported a significant turnaround, achieving a net income of $640,157 for the 39 weeks ended September 28, 2025, compared to a net loss of $735,131 in the prior year, representing a swing of over $1.3 million. For the 13 weeks ended September 28, 2025, net income was $914,975, a substantial improvement from a net loss of $219,479 in the same period last year. This positive shift occurred despite a decrease in sales, which fell to $10,864,445 for the 39-week period from $11,649,610, and to $3,853,682 for the 13-week period from $4,348,824. The company recorded a substantial unrealized gain on marketable securities of $500,124 and a realized investment gain of $312,954 for the 39-week period. A key strategic move was the impairment charge of $304,000 for its equity investment in NGI Corporation due to recurring operating losses and insufficient capital. Additionally, BT Brands closed a Burger Time location in Minot, North Dakota, in July 2025 and is negotiating a proposed business combination with Aero Velocity, indicating a strategic pivot.

Why It Matters

BT Brands' shift from a significant loss to a profit, despite declining sales, signals effective cost management and successful investment strategies, which is crucial for investor confidence. The impairment of the NGI Corporation investment highlights the risks of related-party ventures and capital allocation, impacting future growth prospects. For employees, the closure of a Burger Time location in Minot, North Dakota, indicates potential job impacts, while the proposed merger with Aero Velocity could bring new opportunities or restructuring. In a competitive restaurant market, BT Brands' ability to generate profit from investment gains rather than core sales growth suggests a need for a clearer, sustainable operational strategy.

Risk Assessment

Risk Level: medium — The company's sales decreased by 6.7% for the 39-week period and 11.4% for the 13-week period, indicating underlying operational challenges in its restaurant business. While net income improved, a significant portion was driven by unrealized and realized investment gains totaling over $800,000, rather than core business performance, making the profit less sustainable. The $304,000 impairment of the NGI Corporation investment also highlights risks in related-party dealings and capital allocation.

Analyst Insight

Investors should scrutinize BT Brands' core restaurant performance, as the recent profit is heavily reliant on investment gains rather than sustainable operational improvements. Consider the proposed merger with Aero Velocity as a potential catalyst, but evaluate the combined entity's business model and growth prospects carefully. Await further details on the merger and any strategies to boost restaurant sales before making long-term commitments.

Financial Highlights

debt To Equity

0.54

revenue

$10,864,445

operating Margin

N/A

total Assets

$11,938,554

total Debt

$3,133,780

net Income

$640,157

eps

N/A

gross Margin

N/A

cash Position

$1,277,738

revenue Growth

-6.7%

Revenue Breakdown

Key Numbers

• $640,157 — Net Income (for 39 weeks ended Sep 28, 2025, up from $(735,131) loss)
• $914,975 — Net Income (for 13 weeks ended Sep 28, 2025, up from $(219,479) loss)
• $10,864,445 — Sales (for 39 weeks ended Sep 28, 2025, down from $11,649,610)
• $3,853,682 — Sales (for 13 weeks ended Sep 28, 2025, down from $4,348,824)
• $500,124 — Unrealized Gain on Marketable Securities (for 39 weeks ended Sep 28, 2025)
• $312,954 — Realized Investment Gain (for 39 weeks ended Sep 28, 2025)
• $304,000 — Impairment of Equity Investment (for NGI Corporation, recorded Sep 28, 2025)
• 6,154,724 — Common Shares Outstanding (as of November 15, 2025)
• 40.7% — Ownership Stake (in Bagger Dave's Burger Tavern, Inc.)
• $1,277,738 — Cash and Cash Equivalents (as of September 28, 2025, down from $1,951,415)

Key Players & Entities

• BT Brands, Inc. (company) — registrant
• NGI Corporation (company) — related company with impaired investment
• Aero Velocity (company) — proposed merger partner
• Bagger Dave's Burger Tavern, Inc. (company) — 40.7% owned affiliate
• The Walt Disney Company (company) — licensor for bottled water characters
• NASDAQ Stock Market LLC (regulator) — exchange where securities are registered
• Securities and Exchange Commission (regulator) — regulatory body for filings
• Minot, North Dakota (location) — location of permanently closed Burger Time restaurant

FAQ

Risk Factors

• Investment Impairment [medium — financial]: BT Brands recorded a $304,000 impairment charge on its equity investment in NGI Corporation due to NGI's recurring operating losses and insufficient capital. This write-down fully reflects the carrying value of the investment.
• Restaurant Closures and Strategic Pivots [medium — operational]: The company closed a Burger Time location in Minot, North Dakota, in July 2025. Additionally, BT Brands is negotiating a proposed business combination with Aero Velocity, indicating potential significant changes to its operational structure.
• Dependence on Related Party Transactions [low — market]: The company's inventory includes $339,511 related to a bottled water program with NGI Corporation, which is experiencing financial difficulties. The success of this inventory depends on NGI's ability to operate and sell the product.
• Declining Sales [medium — financial]: Sales decreased to $10,864,445 for the 39 weeks ended September 28, 2025, from $11,649,610 in the prior year. The 13-week sales also fell to $3,853,682 from $4,348,824.
• Decreasing Cash Position [medium — financial]: Cash and cash equivalents decreased to $1,277,738 as of September 28, 2025, from $1,951,415 at December 29, 2024, a reduction of $673,677.

Industry Context

BT Brands operates in the casual dining and quick-service restaurant sectors, which are highly competitive and sensitive to consumer spending. The industry faces ongoing challenges related to labor costs, food prices, and evolving consumer preferences. Companies are increasingly exploring strategic partnerships, divestitures, and operational efficiencies to navigate these pressures.

Regulatory Implications

The company must comply with various food safety regulations, labor laws, and financial reporting standards. Any significant business combination or divestiture could trigger regulatory review. The impairment of investments and potential restructuring activities may also require specific disclosures and adherence to accounting standards.

What Investors Should Do

1. Monitor the proposed business combination with Aero Velocity.
2. Analyze the drivers of the sales decline despite improved net income.
3. Assess the impact of the NGI Corporation impairment and related inventory.
4. Evaluate the company's cash flow and liquidity.

Key Dates

• 2025-09-28: End of 39-week period — Reported net income of $640,157 on sales of $10,864,445, with significant unrealized and realized investment gains.
• 2025-09-28: Impairment of NGI Corporation Investment — Recorded a $304,000 impairment charge, fully writing down the equity investment due to NGI's financial struggles.
• 2025-07: Burger Time Location Closure — Closed a Burger Time restaurant in Minot, North Dakota, reflecting potential portfolio adjustments.
• 2025-08: Bagger Dave's Strategic Review — Bagger Dave's announced negotiations with potential purchasers for store locations, impacting BT Brands' significant investment.
• 2025-11-15: Common Shares Outstanding — 6,154,724 common shares outstanding, a key metric for per-share calculations and market capitalization.

Glossary

Unrealized Gain on Marketable Securities

An increase in the value of an investment that has not yet been sold. This gain is not yet realized as cash but impacts the company's balance sheet. (Contributed $500,124 to the company's net income for the 39-week period.)

Realized Investment Gain

Profit made from selling an investment for more than its purchase price. This gain is recognized in the income statement. (Contributed $312,954 to the company's net income for the 39-week period.)

Impairment Charge

A reduction in the carrying value of an asset on the balance sheet when its fair value is less than its book value. This reflects a loss in value. (BT Brands recorded a $304,000 impairment charge on its investment in NGI Corporation.)

Assets Held for Sale

Assets that a company intends to sell in the near future. These are typically reported separately on the balance sheet. (Increased from $258,751 to $424,123, potentially indicating preparations for divestitures.)

Equity Investment in Unconsolidated Subsidiary

An investment in another company where BT Brands has significant influence but does not control it, and the subsidiary's financial statements are not fully consolidated. (This line item disappeared from the balance sheet, likely due to the impairment of the NGI investment.)

Accumulated Deficit

The total net losses of a company since its inception, less any net income. A negative number indicates the company has historically lost more money than it has earned. (Decreased from $(4,361,099) to $(3,720,942), showing improved profitability over the period.)

Year-Over-Year Comparison

Compared to the prior year's 39-week period, BT Brands has achieved a significant turnaround, moving from a net loss of $735,131 to a net income of $640,157. This improvement occurred despite a decrease in sales, which fell from $11,649,610 to $10,864,445. The company's financial health shows a reduction in total liabilities by $817,469 and an increase in total shareholders' equity by $759,226, indicating a stronger balance sheet, though cash reserves have declined.

Key Financial Figures

• $0.002 — e on which registered Common stock, $0.002 per share BTBD The NASDAQ Stock Mar
• $1.50 — 2026. Assuming the required payment of $1.50 per can sold, sales of the Disney can w

Filing Documents

• btbd_10q.htm (10-Q) — 861KB
• btbd_ex311.htm (EX-31.1) — 11KB
• btbd_ex312.htm (EX-31.2) — 12KB
• btbd_ex321.htm (EX-32.1) — 5KB
• btbd_ex322.htm (EX-32.2) — 5KB
• btbd_10qimg1.jpg (GRAPHIC) — 5KB
• 0001477932-25-008407.txt ( ) — 4495KB
• btbd-20250928.xsd (EX-101.SCH) — 44KB
• btbd-20250928_lab.xml (EX-101.LAB) — 291KB
• btbd-20250928_cal.xml (EX-101.CAL) — 50KB
• btbd-20250928_pre.xml (EX-101.PRE) — 234KB
• btbd-20250928_def.xml (EX-101.DEF) — 107KB
• btbd_10q_htm.xml (XML) — 649KB

— FINANCIAL INFORMATION

PART I— FINANCIAL INFORMATION. 5 ITEM 1. CONDENSED FINANCIAL STATEMENTS (unaudited) . 5 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 21 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. 29 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES. 29

—OTHER INFORMATION

PART II—OTHER INFORMATION. 30 ITEM 1. LEGAL PROCEEDINGS. 30 ITEM 1A. RISK FACTORS. 30 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 30 ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 30 ITEM 4. MINE SAFETY DISCLOSURES. 30 ITEM 5. OTHER INFORMATION. 30 ITEM 6. EXHIBITS. 31 SIGNATURES. 32 4 Table of Contents

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION BT BRANDS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) September 28, 2025 December 29, 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,277,738 $ 1,951,415 Marketable securities 3,461,842 2,319,555 Receivables 50,830 69,459 Demand notes receivable from related company 744,858 120,000 Inventory 563,640 272,603 Prepaid expenses and other current assets 110,210 127,621 Assets held for sale 424,123 258,751 Total current assets 6,633,241 5,119,404 PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET 2,638,957 3,343,340 OPERATING LEASES RIGHT-OF-USE ASSETS 1,529,657 1,724,052 EQUITY INVESTMENT IN UNCONSOLIDATED SUBSIDIARY - 304,439 EQUITY INVESTMENT IN RELATED COMPANY - 304,000 GOODWILL 796,220 796,220 INTANGIBLE ASSETS, NET 319,337 367,799 OTHER ASSETS, NET 21,142 37,543 Total assets $ 11,938,554 $ 11,996,797 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 185,365 $ 612,059 Current maturities of long-term debt 203,651 185,009 Current operating lease obligations 301,118 274,511 Accrued expenses 284,764 371,356 Total current liabilities 974,898 1,442,935 LONG-TERM DEBT, LESS CURRENT PORTION 1,930,029 2,091,335 NONCURRENT OPERATING LEASE OBLIGATIONS 1,309,174 1,497,300 Total liabilities 4,214,101 5,031,570 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preferred stock, $.001 par value, 2,000,000 shares authorized, no shares outstanding at September 28, 2025 and December 29, 2024 - - Common stock, $.002 par value, 50,000,000 authorized, 6,461,118 issued and 6,154,724 outstanding at both September 28, 2025, and December 29, 2024, respectively 12,309 12,309 Less cost of 306,394 common shares held in Treasury at September 28, 2025 and December 29, 2024 ( 499,718 ) ( 499,718 ) Additional paid-in capital 11,932,804 1

Business

Business Our restaurants cover a broad range of concepts. We own and operate Keegan's Seafood Grille ("Keegan's"), a dine-in restaurant located in Florida; Pie In The Sky Coffee and Bakery ("PIE"), a casual dining coffee shop bakery in Woods Hole, Massachusetts: and, Schnitzel Haus ("Schnitzel"), a German-themed restaurant in Hobe Sound, Florida, purchased in May, 2024. Our Burger Time restaurants offer a variety of burgers and other affordable foods, sides, and soft drinks. Keegan's has operated in Indian Rocks Beach, Florida, for over thirty-five years, offering a variety of traditional fresh seafood items for lunch and dinner. Keegan's menu includes beer and wine. PIE features an array of freshly prepared baked goods, sandwiches, and our locally roasted coffee. Schnitzel is a full-service restaurant and bar featuring a German-themed menu and specialty imported European beers. Our revenues are derived from food and beverages at our restaurants, retail goods such as apparel, private-labeled "Keegan's Hot Sauce," and other souvenir items. "Souvenir" items account for an insignificant portion of our income. On June 2, 2022, BT Brands purchased 11,095,085 common shares of Bagger Dave's, currently representing 40.7% of Bagger Dave's Burger Tavern, Inc., for $ 1,390,000 , or approximately $ 0.114 per share. Two representatives of BT Brands comprise two of the three members of the Board of Directors of Bagger. The Bagger concept offers a variety of burgers, including turkey burgers, hand-cut fries, craft beers, milkshakes, salads, black bean turkey chili, and pizza. The first Bagger Dave's opened in January 2008 in Berkley, Michigan. There are currently five Bagger Dave's operating restaurants, including three in Michigan and single units in Fort Wayne, Indiana, and Centerville, Ohio. In August 2025, Bagger Dave's announced that it is negotiating with potential purchasers for the store locations and would evaluate alternative options for the public company. As detail

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