[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements of BT Brands, Inc. and its subsidiaries, including balance sheets, statements of income, cash flows, and shareholders' equity, along with accompanying notes detailing significant accounting policies, business operations, and financial instrument disclosures [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets | ASSETS | October 1, 2023 ($) | January 1, 2023 ($) | | :----------------------------------------- | :-------------- | :-------------- | | Cash and cash equivalents | 5,546,874 | 2,150,578 | | Marketable securities | 1,366,973 | 5,994,295 | | Total current assets | 7,458,234 | 8,864,093 | | Total assets | 14,911,180 | 16,769,697 | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total current liabilities | 1,287,414 | 2,133,541 | | Total liabilities | 5,269,789 | 6,617,075 | | Total shareholders' equity | 9,641,391 | 10,152,622 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (13 weeks ended) | Metric | October 1, 2023 ($) | October 2, 2022 ($) | | :---------------------- | :-------------- | :-------------- | | SALES | 4,007,656 | 4,023,920 | | Income from operations | 40,615 | 8,991 | | NET LOSS | (3,486) | (174,906) | | NET LOSS PER COMMON SHARE | (0.00) | (0.04) | Condensed Consolidated Statements of Income (39 weeks ended) | Metric | October 1, 2023 ($) | October 2, 2022 ($) | | :---------------------- | :-------------- | :-------------- | | SALES | 11,078,419 | 9,621,996 | | Income from operations | (289,691) | 93,765 | | NET LOSS | (379,006) | (224,531) | | NET LOSS PER COMMON SHARE | (0.06) | (0.03) | [Condensed Consolidated Statements of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (39 weeks ended) | Cash Flow Activity | October 1, 2023 ($) | October 2, 2022 ($) | | :---------------------------------- | :-------------- | :-------------- | | Net cash provided by (used in) operating activities | (74,732) | 484,504 | | Net cash provided by (used in) investing activities | 4,845,886 | (5,653,560) | | Net cash used in financing activities | (1,374,858) | (50,872) | | CHANGE IN CASH AND CASH EQUIVALENTS | 3,396,296 | (5,219,928) | | CASH AND CASH EQUIVALENTS, END OF PERIOD | 5,546,874 | 7,165,704 | [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Condensed Consolidated Statements of Shareholders' Equity (39 weeks ended) | Shareholder Equity | January 1, 2023 ($) | October 1, 2023 ($) | | :---------------------------------- | :-------------- | :-------------- | | Common Stock Amount | 12,792 | 12,492 | | Additional Paid-in Capital | 11,409,235 | 11,527,235 | | Accumulated (Deficit) | (1,162,523) | (1,541,529) | | Treasury Stock | (106,882) | (356,807) | | Total | 10,152,622 | 9,641,391 | - Stock-based compensation for the 39 weeks ended October 1, 2023, was **$118,000**, contributing to additional paid-in capital[187](index=187&type=chunk) - The company purchased treasury stock totaling **$250,225** during the 39 weeks ended October 1, 2023[187](index=187&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Presentation and Use of Estimates](index=6&type=section&id=Basis%20of%20Presentation%20and%20Use%20of%20Estimates) The condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, requiring management to make estimates and assumptions that affect reported amounts - Financial statements are prepared in conformity with GAAP for interim financial information and SEC requirements for Form 10-Q[188](index=188&type=chunk) - Management's estimates and assumptions affect reported asset, liability, revenue, and expense amounts, with potential for material differences in actual results[29](index=29&type=chunk) [The Company and Business Overview](index=7&type=section&id=The%20Company%20and%20Business%20Overview) BT Brands, Inc. operates a diverse portfolio of eighteen restaurants across the US, including Burger Time, Dairy Queen, Keegan's Seafood Grille, Pie In The Sky Coffee and Bakery, Village Bier Garten, and a 41.2% interest in Bagger Dave's Burger Tavern, with plans to sell its Dairy Queen business - As of October 1, 2023, BT Brands operates **eighteen restaurants**, including eight Burger Time, one Dairy Queen, Keegan's Seafood Grille, Pie In The Sky Coffee and Bakery, Village Bier Garten, and a **41.2% interest in Bagger Dave's Burger Tavern**[74](index=74&type=chunk)[119](index=119&type=chunk)[191](index=191&type=chunk) - The company plans to sell its Dairy Queen business, which has a book value of **$440,384** as of October 1, 2023, following an agreement to terminate the franchise[190](index=190&type=chunk) - BT Brands acquired **41.2% of Bagger Dave's Burger Tavern, Inc.** on June 2, 2022, for **$1,390,000**[49](index=49&type=chunk) [Fiscal Year Periods](index=7&type=section&id=Fiscal%20Year%20Periods) BT Brands' fiscal year is a 52/53-week year, ending on the Sunday closest to December 31, with fiscal 2023 being a 52-week year ending December 31, 2023 - The company's fiscal year is a 52/53-week year, ending on the Sunday closest to December 31[192](index=192&type=chunk) - Fiscal 2023 is a 52-week year ending December 31, 2023[192](index=192&type=chunk) [Cash and Cash Equivalents](index=7&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and cash equivalents include United States Treasury Bills with original maturities of 90 days or less, with the company maintaining cash deposits in bank and brokerage accounts, sometimes exceeding insured amounts, but not believing there is significant risk - Cash includes US Treasury Bills with original maturities of **90 days or less**[75](index=75&type=chunk) - Bank and brokerage deposits may exceed insured amounts, but the company assesses the risk as not significant[75](index=75&type=chunk) [Investments](index=7&type=section&id=Investments) Noncurrent investments as of October 1, 2023, include an **$811,615** equity method investment in Bagger Dave's and a **$304,000** total investment in NGI Corporation, which includes common shares and preferred stock with warrants - Noncurrent investments as of October 1, 2023, include[76](index=76&type=chunk) Investment Breakdown (October 1, 2023) | Investment | Amount (October 1, 2023) ($) | | :--------- | :----------------------- | | Bagger Dave's Burger Tavern, Inc. (equity method) | 811,615 | | NGI Corporation (total investment) | 304,000 | - BT Brands holds **330,418 common shares** and warrants for **358,000 common shares at $1.00** (expiring March 31, 2028) and **34,697 warrants at $1.65** in NGI Corporation[37](index=37&type=chunk) - For the 39 weeks ending October 1, 2023, Bagger Dave's had sales of **$5,009,164** and a net loss of **$617,164**, resulting in BT Brands' **41.2% equity share of loss** being approximately **$254,272**[52](index=52&type=chunk) [Fair Value of Financial Instruments](index=8&type=section&id=Fair%20Value%20of%20Financial%20Instruments) The company adheres to the FASB fair value hierarchy (Level 1, 2, 3) for measuring assets and liabilities, with marketable securities, including a bond fund and common stocks, valued at Level 1 quoted market prices - The company follows FASB fair value hierarchy (Level 1, 2, 3) for fair value measurements[78](index=78&type=chunk)[79](index=79&type=chunk) - As of October 1, 2023, marketable securities (bond fund and common stocks) had a total cost of **$1,366,973**, reflected at Level 1 quoted market price[79](index=79&type=chunk) [Receivables, Inventory, Property and Equipment](index=8&type=section&id=Receivables%2C%20Inventory%2C%20Property%20and%20Equipment) Receivables are estimated rebates, inventory is valued at the lower of cost or net realizable value (FIFO), and property and equipment are stated at cost, depreciated using the straight-line method, with long-lived assets reviewed for impairment based on estimated cash flows - Receivables consist of estimated rebates due from a primary vendor[56](index=56&type=chunk) - Inventory (food, beverages, supplies) is stated at the lower of cost (FIFO) or net realizable value[57](index=57&type=chunk) - Property and equipment are stated at cost and depreciated using the straight-line method over **3 to 30 years**[58](index=58&type=chunk) - Long-lived assets are reviewed for impairment based on estimated cash flows at the restaurant level[80](index=80&type=chunk) [Goodwill and Other Intangible Assets, Income Taxes](index=9&type=section&id=Goodwill%20and%20Other%20Intangible%20Assets%2C%20Income%20Taxes) Goodwill is not amortized but tested for impairment annually, while other intangible assets are amortized over their useful lives, and the company uses a net combined federal and state tax rate of approximately 27.5% for deferred taxes with no accrued interest or penalties related to income tax obligations - Goodwill is not amortized and is tested for impairment annually[81](index=81&type=chunk) - Other intangible assets, such as covenants not to compete and trademarks, are amortized over their expected useful lives (e.g., tradename assets over **15 years**)[81](index=81&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - Total amortization expense for intangible assets was **$12,221** for 13 weeks and **$54,486** for 39 weeks ending October 1, 2023[61](index=61&type=chunk) - The company uses a net combined federal and state tax rate of approximately **27.5%** for estimating current tax benefit[59](index=59&type=chunk) - No accrued interest or penalties relating to income tax obligations; all periods since inception remain open for inspection[84](index=84&type=chunk) [Per Common Share Amounts](index=9&type=section&id=Per%20Common%20Share%20Amounts) Net income per common share is calculated by dividing net income or loss by the weighted average number of common shares outstanding, with no dilutive shares for the periods ending in 2023 and 2022 - Net income per common share is computed by dividing net income or loss by the weighted average number of common stock outstanding[85](index=85&type=chunk) - There were no dilutive shares for the periods ending in 2023 and 2022[85](index=85&type=chunk) [NOTE 3 – PROPERTY AND EQUIPMENT & Asset Held for Sale](index=9&type=section&id=NOTE%203%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT%20%26%20Asset%20Held%20for%20Sale) Property and equipment include land, equipment, and buildings, with the company completing the sale of its West St. Paul Burger Time location in February 2023 for a gain of **$313,688** and disposing of the St. Louis property, eliminating **$180,000** in accrued property taxes, while the Richmond location is currently offered for sale Property and Equipment | Property and Equipment | October 1, 2023 ($) | January 1, 2023 ($) | | :--------------------- | :-------------- | :-------------- | | Land | 435,239 | 485,239 | | Equipment | 3,875,840 | 3,893,274 | | Buildings and leasehold improvements | 2,453,547 | 2,402,157 | | Total property and equipment | 6,764,626 | 6,780,670 | | Accumulated depreciation | (3,267,565) | 3,741,170 | | Less - property held for sale | (258,751) | (446,526) | | Net property and equipment | 3,238,310 | 3,294,644 | - Depreciation expense for the 39-week periods was **$416,315** in 2023 and **$306,584** in 2022[63](index=63&type=chunk) - Sale of West St. Paul location in February 2023 resulted in a gain of **$313,688**[82](index=82&type=chunk) - Disposition of St. Louis property eliminated approximately **$180,000** of previously accrued property taxes[82](index=82&type=chunk) [NOTE 4 - ACCRUED EXPENSES](index=10&type=section&id=NOTE%204%20-%20ACCRUED%20EXPENSES) Accrued expenses include real estate taxes, bonus compensation, payroll, payroll taxes, sales taxes payable, vacation pay, gift card liability, and other accrued expenses Accrued Expenses | Accrued Expense | October 1, 2023 ($) | January 1, 2023 ($) | | :------------------------ | :-------------- | :-------------- | | Accrued real estate taxes | 33,487 | 202,436 | | Accrued bonus compensation | 59,139 | 59,139 | | Accrued payroll | 190,747 | 143,481 | | Accrued payroll taxes | 12,926 | 12,764 | | Accrued sales taxes payable | 99,330 | 70,270 | | Accrued vacation pay | 17,663 | 17,663 | | Accrued gift card liability | 19,705 | 25,965 | | Other accrued expenses | 43,038 | 802 | | Total | 476,035 | 532,520 | [NOTE 5 - LONG TERM DEBT](index=10&type=section&id=NOTE%205%20-%20LONG%20TERM%20DEBT) Long-term debt primarily consists of three bank notes totaling **$2,533,971** as of October 1, 2023, secured by mortgages on ten BTND operating locations and guaranteed by BT Brands, Inc. and a shareholder, also including a Minnesota Small Business Emergency Loan Long-Term Debt | Long-Term Debt Item | October 1, 2023 ($) | January 1, 2023 ($) | | :------------------------ | :-------------- | :-------------- | | Three notes payable to a bank | 2,533,971 | 2,864,484 | | Minnesota Small Business Emergency Loan | 458 | 3,208 | | Total | 2,534,429 | 2,867,692 | | Less - unamortized debt issuance costs | (37,549) | (41,599) | | Current maturities | (164,866) | (167,616) | | Net Long-Term Debt | 2,332,014 | 2,658,477 | - Bank notes are due in monthly installments, including principal and interest at a fixed rate of **3.45%** through June 28, 2031, then variable[89](index=89&type=chunk) [NOTE 6 - STOCK-BASED COMPENSATION](index=10&type=section&id=NOTE%206%20-%20STOCK-BASED%20COMPENSATION) The company grants stock options and contingent incentive share awards to employees and executives, with total equity-based compensation expenses of **$118,000** through Q3 2023 and an estimated **$372,000** projected over the next five years, including a Contingent Incentive Share Award for **250,000 shares** contingent on the share price reaching **$8.50** - Total equity-based compensation expenses through Q3 2023 were **$118,000**, compared to **$102,300** through Q3 2022[90](index=90&type=chunk) - Approximately **$372,000** in stock-based compensation expense for current grants is projected over the next five years (**$200,000** in 2024, **$95,000** in 2025, **$35,000** in 2026, **$28,000** in 2027, and **$14,000** in 2028)[90](index=90&type=chunk) - A Contingent Incentive Share Award for **250,000 common shares** was finalized for senior executives, contingent on the share price reaching **$8.50** for 20 consecutive trading days[92](index=92&type=chunk) - **$77,000** of stock-based compensation was recognized for the Contingent Incentive Share Award for the 39 weeks of 2023[92](index=92&type=chunk) Stock Options Activity (October 1, 2023) | Stock Options Activity | Number of Options | Weighted Average Exercise Price ($) | | :--------------------------------------- | :---------------- | :------------------------------ | | Options outstanding at January 1, 2023 | 220,250 | 2.74 | | Granted | 100,000 | 2.50 | | Canceled, forfeited, or expired | (750) | 0 | | Options outstanding at October 1, 2023 | 319,500 | 2.74 | | Options exercisable at October 1, 2023 | 106,802 | 3.18 | [NOTE 7 – LEASES](index=11&type=section&id=NOTE%207%20%E2%80%93%20LEASES) The company has operating leases for Keegan's, PIE, and VBG, with varying terms and annual escalations, and lease obligations are discounted using incremental borrowing rates (**4-5%**) due to the absence of implicit interest rates, resulting in total future minimum lease payments of **$2,272,158** and a present value of **$1,865,687** as of October 1, 2023 - Operating leases for Keegan's, PIE, and VBG are accounted for, with initial lease obligations and right-of-use assets recorded at inception[93](index=93&type=chunk)[94](index=94&type=chunk)[117](index=117&type=chunk) - Incremental borrowing rates (**4%** for Keegan's, **5%** for PIE and VBG) are used to determine the present value of future lease payments[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) Future Minimum Lease Payments (as of Oct 1, 2023) | Future Minimum Lease Payments | Amount ($) | | :------------------------------------------------ | :-------------- | | Remainder 2023 | 70,788 | | 2024 | 289,076 | | 2025 | 297,745 | | 2026 | 306,674 | | 2027 | 268,437 | | 2028 and thereafter | 1,039,438 | | Total future minimum lease payments | 2,272,158 | | Less - interest | (406,471) | | Present Value of Lease Payments | 1,865,687 | - The weighted average remaining lease term is approximately **5.3 years**[36](index=36&type=chunk) [NOTE 8 - RELATED PARTY TRANSACTION](index=12&type=section&id=NOTE%208%20-%20RELATED%20PARTY%20TRANSACTION) The company's CEO and CFO also serve as Chairman and CFO, respectively, of NGI Corporation, with BT Brands holding common shares and warrants in NGI, and the investment carried at a cost of **$75,000** due to the lack of a readily determinable market value - BT Brands' CEO and CFO also hold leadership positions at NGI Corporation[37](index=37&type=chunk) - BT Brands owns **330,418 common shares** and holds warrants for **358,000 common shares at $1.00** and **34,697 warrants at $1.65** in NGI[37](index=37&type=chunk) - The investment in NGI is carried at a cost of **$75,000**, as it does not have a readily determinable market value[37](index=37&type=chunk) [NOTE 9 – CONTINGENCIES](index=12&type=section&id=NOTE%209%20%E2%80%93%20CONTINGENCIES) The company is not aware of any significant asserted or potential claims or legal/regulatory actions that could impact its financial position - The company is unaware of any significant asserted or potential claims that could impact its financial position[38](index=38&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION](index=13&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATION) This section provides an overview of BT Brands' financial condition, results of operations, liquidity, and capital resources, highlighting recent acquisitions, industry trends, and detailed financial performance for the thirteen and thirty-nine weeks ended October 1, 2023, compared to the prior year [Introduction and Company Overview](index=13&type=section&id=Introduction%20and%20Company%20Overview) BT Brands, Inc. operates Burger Time restaurants, established in 1987, focusing on grilled hamburgers and affordable foods through a drive-thru and take-out strategy, with the average customer transaction increasing by approximately **20%** in fiscal 2023 to **$15.60** due to menu price increases - Burger Time restaurants, established in 1987, focus on grilled hamburgers and affordable foods, primarily serving the drive-thru and take-out segment[6](index=6&type=chunk) - Average customer transaction at Burger Time increased by approximately **20%** in fiscal 2023 compared to 2022, reaching approximately **$15.60**, mainly due to menu price increases[7](index=7&type=chunk) [Notable Recent Events](index=13&type=section&id=Notable%20Recent%20Events) Recent acquisitions in 2022, including three operating restaurants and a **41.2%** ownership in BD (Bagger Dave's), have diversified BT Brands' operations into new restaurant segments and geographic regions, reducing dependency on Burger Time's financial performance, with the company planning to consider future acquisition opportunities - Recent acquisitions in 2022, including three operating restaurants and a **41.2% ownership in BD**, diversified operations into new restaurant segments and geographic regions[9](index=9&type=chunk) - The company expects to consider new acquisition opportunities in the future[9](index=9&type=chunk) [Industry Trends and Uncertainties](index=13&type=section&id=Industry%20Trends%20and%20Uncertainties) The restaurant industry faces challenges including intense competition, difficulties attracting food service workers, and rapid inflation in input costs, though beef and egg costs have trended down slightly in 2023, fully covering cost increases through menu price hikes remains challenging, with margin improvements expected through operational enhancements, equipment advances, and increased volumes - Current industry trends include difficulties attracting food service workers and rapid inflation in input costs[10](index=10&type=chunk) - Beef and egg costs have trended down slightly in 2023, but raising menu prices to fully cover cost increases remains challenging due to intense competition[11](index=11&type=chunk) - Future margin improvements are expected through operational enhancements, equipment advances, and increased volumes[11](index=11&type=chunk) - The labor market is challenging, leading to higher wages and increased competition for employees[121](index=121&type=chunk) [Results of Operations for the Thirteen Weeks Ended October 1, 2023, and October 2, 2022](index=14&type=section&id=Results%20of%20Operations%20for%20the%20Thirteen%20Weeks%20Ended%20October%201%2C%202023%2C%20and%20October%202%2C%202022) For the third fiscal quarter of 2023, net sales slightly decreased, primarily due to the closure of the West St. Paul location and a return to pre-pandemic customer purchasing patterns, while income from operations improved significantly, driven by moderating inflation and declining food and paper costs, despite increased labor and general and administrative expenses [Net Revenues (13 weeks)](index=14&type=section&id=Net%20Revenues%20%2813%20weeks%29) Net Revenues (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 ($) | 13 weeks ended Oct 2, 2022 ($) | Change ($) | Change (%) | | :----- | :------------------------- | :------------------------- | :--------- | :--------- | | Sales | 4,007,656 | 4,023,920 | (16,264) | (0.4%) | - Sales declined due to the closure of the West St. Paul location and a return to pre-pandemic customer purchasing patterns, along with staffing challenges at Burger Time[133](index=133&type=chunk) - PIE's sales for the quarter were **$1,292,740**, an increase of **2.9%** from the prior year, benefiting from lower input costs[135](index=135&type=chunk) [Costs of Sales - Food and Paper (13 weeks)](index=14&type=section&id=Costs%20of%20Sales%20-%20Food%20and%20Paper%20%2813%20weeks%29) Costs of Sales - Food and Paper (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 (%) | 13 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Food and paper costs (% of sales) | 36.2 | 39.9 | (3.7) | - The decrease in food and paper costs as a percentage of sales was primarily due to moderating inflationary pressures and declining prices for several key inputs[136](index=136&type=chunk) [Restaurant Operating Costs (13 weeks)](index=14&type=section&id=Restaurant%20Operating%20Costs%20%2813%20weeks%29) Restaurant Operating Costs (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 (%) | 13 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Restaurant operating costs (% of sales) | 88.6 | 88.4 | 0.2 | - The slight decrease in restaurant operating costs as a percentage of sales was attributed to declining and stabilizing commodity costs, particularly at PIE[137](index=137&type=chunk) [Labor Costs (13 weeks)](index=14&type=section&id=Labor%20Costs%20%2813%20weeks%29) Labor Costs (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 (%) | 13 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Labor costs (% of sales) | 37.7 | 33.2 | 4.5 | - The increase in labor costs as a percentage of sales was due to tighter labor markets, higher hourly wage costs, and higher labor costs associated with the PIE acquisition[138](index=138&type=chunk)[139](index=139&type=chunk) [Occupancy and Other Operating Expenses (13 weeks)](index=15&type=section&id=Occupancy%20and%20Other%20Operating%20Expenses%20%2813%20weeks%29) Occupancy and Other Operating Expenses (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 (%) | 13 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Occupancy and other expenses (% of sales) | 8.5 | 9.1 | (0.6) | - The decrease in occupancy and other expenses as a percentage of sales was influenced by the closure of the West St. Paul location, partially offset by rent and utility cost increases[140](index=140&type=chunk) [Depreciation and Amortization Expense (13 weeks)](index=15&type=section&id=Depreciation%20and%20Amortization%20Expense%20%2813%20weeks%29) Depreciation and Amortization Expense (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 ($) | 13 weeks ended Oct 2, 2022 ($) | Change ($) | Change (pp) | | :----- | :------------------------- | :------------------------- | :--------- | :---------- | | Depreciation and amortization expense | 114,774 | 168,855 | (54,081) | (1.3) | - The decrease in depreciation and amortization expense was due to reduced depreciation and amortization associated with recent acquisitions[141](index=141&type=chunk) [General and Administrative Costs (13 weeks)](index=15&type=section&id=General%20and%20Administrative%20Costs%20%2813%20weeks%29) General and Administrative Costs (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 ($) | 13 weeks ended Oct 2, 2022 ($) | Change ($) | Change (pp) | | :----- | :------------------------- | :------------------------- | :--------- | :---------- | | General and administrative costs | 343,027 | 288,922 | 54,105 | 1.4 | - The increase was associated with public company transition expenses, long-term management agreements, incentive stock options, and approximately **$100,000** in legal expenses for a proxy solicitation contest[142](index=142&type=chunk) [Income from Operations (13 weeks)](index=15&type=section&id=Income%20from%20Operations%20%2813%20weeks%29) Income from Operations (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 ($) | 13 weeks ended Oct 2, 2022 ($) | Change ($) | Change (pp) | | :----- | :------------------------- | :------------------------- | :--------- | :---------- | | Income from operations | 40,615 | 8,991 | 31,624 | 0.8 | - The improvement in income from operations was due to moderating inflation, partially offset by higher general and administrative expenses[143](index=143&type=chunk) [Restaurant-level EBITDA (13 weeks)](index=15&type=section&id=Restaurant-level%20EBITDA%20%2813%20weeks%29) - Restaurant-level EBITDA is a non-GAAP measure used to gauge the profitability of core restaurant operations, excluding corporate-level expenses, depreciation, amortization, and impairment charges[144](index=144&type=chunk)[145](index=145&type=chunk) Restaurant-level EBITDA (13 weeks) | Metric | 13 weeks ended Oct 1, 2023 ($) | 13 weeks ended Oct 2, 2022 ($) | Change ($) | | :----- | :------------------------- | :------------------------- | :--------- | | Revenues | 4,007,656 | 4,023,920 | (16,264) | | Income from operations | 40,615 | 8,991 | 31,624 | | Depreciation and amortization | 114,774 | 168,855 | (54,081) | | General and administrative, corporate-level expenses | 343,027 | 288,922 | 54,105 | | Restaurant-level EBITDA | 498,416 | 466,768 | 31,648 | [Results of Operations for the Thirty-nine Weeks Ended October 1, 2023, and October 2, 2022](index=16&type=section&id=Results%20of%20Operations%20for%20the%20Thirty-nine%20Weeks%20Ended%20October%201%2C%202023%2C%20and%20October%202%2C%202022) For the first 39 weeks of fiscal 2023, net sales increased significantly due to acquired restaurants, offsetting a decline in BTND revenue, however, the company reported an operating loss, primarily driven by increased general and administrative expenses, higher labor costs, and increased food and paper costs [Net Revenues (39 weeks)](index=16&type=section&id=Net%20Revenues%20%2839%20weeks%29) Net Revenues (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 ($) | 39 weeks ended Oct 2, 2022 ($) | Change ($) | Change (%) | | :----- | :------------------------- | :------------------------- | :--------- | :--------- | | Sales | 11,078,419 | 9,621,996 | 1,456,423 | 15.1% | - The increase in sales was principally due to approximately **$1.9 million** in incremental sales from acquired restaurants, offsetting a **4.5% decline** in BTND revenue[68](index=68&type=chunk) - Average sales for each Burger Time unit were approximately **$625,000** in 2023, a decline from **$626,000** in 2022, attributed to a return to pre-COVID patterns, labor challenges, and poorer weather[102](index=102&type=chunk) [Costs of Sales - Food and Paper (39 weeks)](index=16&type=section&id=Costs%20of%20Sales%20-%20Food%20and%20Paper%20%2839%20weeks%29) Costs of Sales - Food and Paper (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 (%) | 39 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Food and paper costs (% of sales) | 39.3 | 37.8 | 1.5 | - The increase was due to inflation early in the year, especially for Keegan's fresh seafood and meat costs at Burger Time[124](index=124&type=chunk) [Restaurant Operating Costs (39 weeks)](index=16&type=section&id=Restaurant%20Operating%20Costs%20%2839%20weeks%29) Restaurant Operating Costs (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 (%) | 39 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Restaurant operating costs (% of sales) | 89.6 | 84.6 | 5.0 | - The increase was due to rising hourly wages and commodity food costs[125](index=125&type=chunk) [Labor Costs (39 weeks)](index=16&type=section&id=Labor%20Costs%20%2839%20weeks%29) Labor Costs (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 (%) | 39 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Labor and benefits costs (% of sales) | 37.2 | 32.5 | 4.7 | - Significantly higher hourly wage rates at all locations and challenging hiring markets contributed to the increase[147](index=147&type=chunk) [Occupancy and Other Operating Expenses (39 weeks)](index=16&type=section&id=Occupancy%20and%20Other%20Operating%20Expenses%20%2839%20weeks%29) Occupancy and Other Operating Expenses (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 (%) | 39 weeks ended Oct 2, 2022 (%) | Change (pp) | | :----- | :------------------------- | :------------------------- | :---------- | | Occupancy and other expenses (% of sales) | 7.6 | 8.4 | (0.8) | - The decrease was principally due to reversing previously accrued property taxes, partially offset by higher lease occupancy costs at new locations[104](index=104&type=chunk) [Depreciation and Amortization Expenses (39 weeks)](index=17&type=section&id=Depreciation%20and%20Amortization%20Expenses%20%2839%20weeks%29) Depreciation and Amortization Expenses (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 ($) | 39 weeks ended Oct 2, 2022 ($) | Change ($) | Change (pp) | | :----- | :------------------------- | :------------------------- | :--------- | :---------- | | Depreciation and amortization expenses | 470,801 | 351,084 | 119,717 | 0.6 | - The increase resulted from the purchase of three new restaurants and capital improvements at several locations[105](index=105&type=chunk) [General and Administrative Costs (39 weeks)](index=17&type=section&id=General%20and%20Administrative%20Costs%20%2839%20weeks%29) General and Administrative Costs (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 ($) | 39 weeks ended Oct 2, 2022 ($) | Change ($) | Change (pp) | | :----- | :------------------------- | :------------------------- | :--------- | :---------- | | General and administrative costs | 1,288,019 | 1,035,639 | 252,380 | 0.8 | - The increase was due to approximately **$100,000** in legal and other costs associated with a proxy solicitation effort, public reporting expenses, stock-based compensation, and long-term management employment agreements[127](index=127&type=chunk) [Income from Operations (39 weeks)](index=17&type=section&id=Income%20from%20Operations%20%2839%20weeks%29) Income from Operations (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 ($) | 39 weeks ended Oct 2, 2022 ($) | Change ($) | | :----- | :------------------------- | :------------------------- | :--------- | | Income from operations | (289,691) | 93,765 | (383,456) | - The shift from operating profit to loss was primarily due to the increase in general and administrative expenses and other factors discussed in revenue and operating costs[149](index=149&type=chunk) [Restaurant-level EBITDA (39 weeks)](index=17&type=section&id=Restaurant-level%20EBITDA%20%2839%20weeks%29) - Restaurant-level EBITDA is a non-GAAP measure used to assess the profitability of core restaurant operations, excluding corporate-level expenses, depreciation, amortization, and impairment charges[129](index=129&type=chunk)[150](index=150&type=chunk) Restaurant-level EBITDA (39 weeks) | Metric | 39 weeks ended Oct 1, 2023 ($) | 39 weeks ended Oct 2, 2022 ($) | Change ($) | | :----- | :------------------------- | :------------------------- | :--------- | | Revenues | 11,078,419 | 9,621,996 | 1,456,423 | | Income (loss) from operations | (289,691) | 93,765 | (383,456) | | Depreciation and amortization | 470,801 | 351,084 | 119,717 | | General and administrative, corporate-level expenses | 1,288,019 | 1,035,639 | 252,380 | | Restaurant-level EBITDA | 1,469,129 | 1,480,488 | (11,359) | | Restaurant-level EBITDA margin | 13.3% | 15.4% | (2.1) pp | [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) As of October 1, 2023, BT Brands had **$6.9 million** in cash and marketable securities and **$6.2 million** in net working capital, a decrease of **$0.6 million** from January 1, 2023, with primary liquidity sources being operating cash flows and cash on hand, used to fund working capital, capital expenditures, and acquisitions, and operating cash flow for the 39 weeks was negative **$74,732**, impacted by public company expenses and proxy solicitation costs - As of October 1, 2023, the company had **$6.9 million** in cash and cash equivalents and marketable securities, and net working capital of **$6.2 million**, a decrease of **$0.6 million** from January 1, 2023[151](index=151&type=chunk) - Primary liquidity requirements are to fund working capital, capital expenditures, general corporate needs, and business investments/acquisitions[152](index=152&type=chunk) - Operating cash flow for the 39 weeks ending October 1, 2023, was a negative **$74,732**, negatively impacted by public company expenses and costs related to proxy solicitation[132](index=132&type=chunk) [Summary of Cash Flows](index=18&type=section&id=Summary%20of%20Cash%20Flows) - Operating cash flow for the 39 weeks ending October 1, 2023, was a negative **$74,732**[132](index=132&type=chunk) [Cash Flows Provided by Operating Activities](index=18&type=section&id=Cash%20Flows%20Provided%20by%20Operating%20Activities) - Operating cash flow was negatively impacted by ongoing public company expenses, including stock-based compensation and costs associated with contested proxy solicitation[132](index=132&type=chunk) [Cash Flows Used in Investing Activities](index=18&type=section&id=Cash%20Flows%20Used%20in%20Investing%20Activities) - During fiscal 2023, the company continued to seek acquisitions, purchasing two operating restaurants and a **41.2% interest** in a publicly traded casual dining business[156](index=156&type=chunk) [Cash Flows Used in Financing Activities](index=18&type=section&id=Cash%20Flows%20Used%20in%20Financing%20Activities) - A significant portion of cash flow used in financing activities is allocated to debt service[157](index=157&type=chunk) [Contractual Obligations](index=18&type=section&id=Contractual%20Obligations) - As of October 1, 2023, contractual obligations totaled **$4.4 million**, including amounts due under mortgages and **$1.9 million** in capitalized lease obligations[158](index=158&type=chunk) - Monthly required payments on lease and mortgage obligations are approximately **$47,000**[158](index=158&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=19&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) As a smaller reporting company, BT Brands, Inc. is not required to provide the information typically mandated under this item - The registrant is a smaller reporting company and is not required to provide information under this item[164](index=164&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=18&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) The company's CEO and CFO concluded that disclosure controls and procedures were not effective as of October 1, 2023, due to a material weakness in internal control over financial reporting related to lack of segregation of duties and inadequate risk assessment, with no significant changes in internal control over financial reporting occurring during the quarter, apart from integrating controls into recent acquisitions [Evaluation of Disclosure Controls and Procedures](index=18&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - As of October 1, 2023, the CEO and CFO concluded that disclosure controls and procedures were not effective at a reasonable assurance level[160](index=160&type=chunk) - This ineffectiveness is due to a material weakness in internal control over financial reporting, as disclosed in the Company's Form 10-K for the fiscal year ended January 1, 2023[160](index=160&type=chunk) [Changes in Internal Control over Financial Reporting](index=18&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - A material weakness for lack of segregation of duties and inadequate risk assessment on monitoring internal controls was disclosed in the prior 10-K[161](index=161&type=chunk) - No significant change in internal control over financial reporting occurred during the most recent fiscal quarter, apart from integrating controls into recent acquisitions[161](index=161&type=chunk) [PART II - OTHER INFORMATION](index=19&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=19&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) There are no pending legal proceedings to which BT Brands, Inc. is a party, nor are any such proceedings known to be threatened or contemplated against it - There are no pending legal proceedings to which the Company is a party or as to which any of its property is subject[163](index=163&type=chunk) - No such proceedings are known to be threatened or contemplated against the Company[163](index=163&type=chunk) [ITEM 1A. RISK FACTORS](index=19&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, BT Brands, Inc. is not required to provide the information typically mandated under this item - The registrant is a smaller reporting company and is not required to provide information under this item[164](index=164&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=19&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Since its initial public offering in November 2021, the company has used proceeds for general working capital and to acquire Keegan's Seafood Grille, Pie in the Sky Bakery and Coffee Shop, a **41.2%** interest in Bagger Dave's, and Village Bier Garten, with no other unregistered sales of equity securities occurring during the reporting period [Unregistered Sales of Equity Securities](index=19&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) - Other than previously set forth, no securities were sold since the filing of the Annual Report on Form 10-K through the date of this quarterly report[165](index=165&type=chunk) [Use of Proceeds](index=19&type=section&id=Use%20of%20Proceeds) - Proceeds from the November 2021 IPO were used for general working capital and acquisitions[166](index=166&type=chunk) Acquisition Item and Amount Used from Proceeds | Acquisition Item | Amount Used from Proceeds ($) | | :-------------------------------- | :------------------------ | | Keegan's Seafood Grille | 1,150,000 | | Pie in the Sky Bakery and Coffee Shop | 1,160,000 | | Bagger Dave's (41.2% interest) | 1,390,000 | | Village Bier Garten | (Amount not specified in chunk) | [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=19&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities during the reporting period - None[167](index=167&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=19&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to BT Brands, Inc - Not applicable[168](index=168&type=chunk) [ITEM 5. OTHER INFORMATION](index=19&type=section&id=ITEM%205.%20OTHER%20INFORMATION) There is no other information to report under this item - None[169](index=169&type=chunk) [ITEM 6. EXHIBITS](index=19&type=section&id=ITEM%206.%20EXHIBITS.) This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents - Exhibits include certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002 from the Company's Principal Executive Officer and Principal Financial Officer[169](index=169&type=chunk)[170](index=170&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Labels, Presentation Linkbase Documents, and Cover Page Interactive Data File) are also included[170](index=170&type=chunk) [SIGNATURES](index=20&type=section&id=SIGNATURES) The report is duly signed on behalf of BT Brands, Inc. by Kenneth Brimmer, Chief Operating Officer and Principal Financial Officer, on November 15, 2023 - The report is signed by Kenneth Brimmer, Chief Operating Officer and Principal Financial Officer[171](index=171&type=chunk) - The report was signed on November 15, 2023[177](index=177&type=chunk)

Fair Value of Financial Instruments The Company's accounting for fair value measurements of assets and liabilities, including available-for-sale securities, is that they are recognized or disclosed at fair value in the statements on a recurring or nonrecurring basis, adhere to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value. · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 BT BRANDS, INC. See Notes to Consolidated Condensed Financial Statements BT BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 8 FORM 10-Q For the quarterly period ended: April 2, 2023 For the transition period from to Commissi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: October 2, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 333-233233 BT BRANDS, INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | |-------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: July 3, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 333-233233 BT BRANDS, INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | |--------------------- ...

PART I— FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents BT Brands, Inc.'s unaudited condensed consolidated financial statements, reflecting increased total assets to **$15.4 million** and a significant decrease in net income to **$42,650** [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets at **$15.4 million** and a sharp decline in net income to **$42,650** for the 13 weeks ended April 3, 2022 Consolidated Balance Sheet Highlights (Unaudited) | Account | April 3, 2022 ($) | January 2, 2022 ($) | | :--- | :--- | :--- | | **Total Assets** | **15,414,133** | **14,505,727** | | Total Current Assets | 11,492,535 | 12,564,579 | | Goodwill | 200,000 | 0 | | **Total Liabilities** | **4,634,764** | **3,877,374** | | Total Current Liabilities | 1,167,919 | 925,310 | | **Total Shareholders' Equity** | **10,779,369** | **10,628,353** | Consolidated Statement of Income (Unaudited) | Metric | 13 Weeks Ended April 3, 2022 ($) | 13 Weeks Ended April 4, 2021 ($) | | :--- | :--- | :--- | | Sales | 2,073,195 | 1,940,872 | | Income from Operations | 88,921 | 223,495 | | **Net Income** | **42,650** | **134,924** | | **Net Income Per Share (Basic & Diluted)** | **0.01** | **0.03** | - Net cash provided by operating activities was **$337,394** for the 13 weeks ended April 3, 2022, compared to **$242,292** in the prior-year period, while net cash used in investing activities significantly increased to **$1,682,010** due to the Keegan's Seafood Grille acquisition[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies and significant financial events, including the **$1.15 million** acquisition of Keegan's Seafood Grille and subsequent **$1.17 million** acquisition of Pie In The Sky Coffee and Bakery - As of April 3, 2022, the company operated **eleven restaurants**, including nine Burger Time, one Dairy Queen, and the newly acquired Keegan's Seafood Grille[28](index=28&type=chunk) - On March 2, 2022, the Company acquired Keegan's Seafood Grille for approximately **$1.15 million** in cash, provisionally recording **$200,000** in Goodwill[48](index=48&type=chunk)[50](index=50&type=chunk) - The company's long-term debt totaled approximately **$3.0 million** as of April 3, 2022, primarily from three bank notes with a fixed interest rate of **3.45%**[56](index=56&type=chunk) - In Q1 2022, the company granted **215,750** stock options at an exercise price of **$2.50** per share, recognizing **$33,500** in stock-based compensation expense[59](index=59&type=chunk)[60](index=60&type=chunk) - On May 11, 2022, the company acquired Pie In The Sky Coffee and Bakery for **$1,173,500** in cash and entered into a five-year property lease[70](index=70&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=13&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATION) Management discusses Q1 2022 financial performance, highlighting a **6.8%** increase in net sales and a significant decline in net income due to a **176.3%** surge in general and administrative costs - The company's principal growth strategy focuses on acquiring multi-unit restaurant concepts and individual properties at attractive earnings multiples[83](index=83&type=chunk) - Food costs, especially beef, have increased approximately **13.7%** since 2020, prompting a planned menu price increase in Q2 2022 to mitigate inflationary pressures[80](index=80&type=chunk) - On March 2, 2022, the company acquired Keegan's Seafood Grille for **$1,150,000**, a restaurant operating for over **35 years** in Indian Rocks Beach, Florida[93](index=93&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Net sales increased **6.8%** to **$2.07 million** in Q1 2022, but income from operations sharply declined due to a **176.3%** rise in general and administrative expenses Q1 2022 vs Q1 2021 Performance | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net Sales | $2,073,195 | $1,940,872 | | Food and Paper Costs (% of Sales) | 34.8% | 37.7% | | Labor Costs (% of Sales) | 29.3% | 29.1% | | General & Administrative Costs | $291,062 | $105,338 | | Income from Operations | $88,921 | $223,495 | | Net Income | $42,650 | $134,924 | - The increase in general and administrative costs was primarily due to the transition to a public company, leading to increased officer compensation and staff[105](index=105&type=chunk) - Restaurant-level EBITDA increased to **$449,397** (**21.6%** margin) in Q1 2022 from **$383,689** (**19.8%** margin) in Q1 2021[114](index=114&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) As of April 3, 2022, the company maintained a strong liquidity position with **$11.1 million** in cash and **$9.9 million** in working capital, largely from its November 2021 public offering - As of April 3, 2022, the Company had **$11,073,645** in cash and **$9,905,672** in working capital, primarily from its November 2021 public offering[110](index=110&type=chunk) - The company's primary liquidity sources are operating cash flows and cash on hand, utilized for debt service, store maintenance, and growth funding[112](index=112&type=chunk) - As of April 3, 2022, the company had **$3 million** in contractual obligations, mainly property mortgages, with monthly payments of approximately **$32,000**[118](index=118&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=19&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) The company is a smaller reporting company and is not required to provide the information under this item - As a smaller reporting company, BT Brands, Inc. is not required to provide quantitative and qualitative disclosures about market risk[132](index=132&type=chunk) [Controls and Procedures](index=19&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that as of April 3, 2022, the company's disclosure controls and procedures were not effective due to insufficient accounting resources and inadequate internal control monitoring - The CEO and CFO concluded that as of April 3, 2022, the company's disclosure controls and procedures were not effective[134](index=134&type=chunk) - Key reasons for ineffectiveness included a lack of accounting resources for segregation of duties, no effective risk assessment, and insufficient internal control monitoring[134](index=134&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=20&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reports that there are no pending legal proceedings to which it is a party or to which its property is subject - There are no pending legal proceedings against the Company as of the report date[137](index=137&type=chunk) [Risk Factors](index=20&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, BT Brands, Inc. is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide risk factors in its Form 10-Q[138](index=138&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=20&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company did not sell any unregistered equity securities during the period covered by this report - The Company did not sell any securities during the period covered by the report[139](index=139&type=chunk) [Other Items (Defaults, Mine Safety, Other Information)](index=20&type=section&id=Other%20Items) The company reports no defaults upon senior securities, no mine safety disclosures as it is not applicable, and no other information to disclose under Item 5 - The company reported no defaults upon senior securities, no mine safety disclosures, and no other information[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) [Exhibits](index=20&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the quarterly report, including certifications by the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and XBRL data files - The report includes required certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL filings[142](index=142&type=chunk)

Part I [Business](index=3&type=section&id=Item%201.%20Business%2E) BT Brands, Inc. operates nine Burger Time and one Dairy Queen restaurant, with a core strategy to acquire multi-unit restaurant concepts, supported by its November 2021 public offering - The company operates nine Burger Time restaurants and one Dairy Queen franchise, primarily in Minnesota, North Dakota, and South Dakota[21](index=21&type=chunk) - The core business strategy is to acquire multi-unit restaurant concepts and individual restaurant properties at attractive earnings multiples[24](index=24&type=chunk)[61](index=61&type=chunk) - In November 2021, the company completed a public offering, raising net proceeds of approximately **$10.7 million** to fund growth and acquisitions[27](index=27&type=chunk) Restaurant Locations Overview | Location | Open Since | Approx. Sq. Ft. | Real Estate Owner | | :--- | :--- | :--- | :--- | | Fargo, North Dakota | 1987 | 600 | BTND, LLC | | Moorhead, Minnesota | 1988 | 600 | BTND, LLC | | Grand Forks, North Dakota | 1989 | 650 | BTND, LLC | | Waite Park, Minnesota | 1989 | 700 | BTND, LLC | | Bismarck, North Dakota | 1989 | 600 | BTND, LLC | | Sioux Falls, South Dakota | 1991 | 650 | BTND, LLC | | Sioux Falls, South Dakota | 1991 | 650 | Leased | | Minot, North Dakota | 1992 | 800 | BTND, LLC | | Ham Lake, Minnesota (Dairy Queen) | 2015 | 1,664 | BTND DQ, LLC | | West St. Paul, Minnesota | 2016 | 1,020 | BTND, LLC | [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors%2E) As a smaller reporting company, BT Brands, Inc. is not required to provide specific risk factor disclosures - The company is not required to provide Risk Factors disclosure as it qualifies as a smaller reporting company[79](index=79&type=chunk) [Unresolved Staff Comments](index=9&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments%2E) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[81](index=81&type=chunk) [Properties](index=9&type=section&id=Item%202.%20Properties%2E) The company owns real estate for nine of its ten restaurants, with **$3.05 million** in mortgage obligations at a fixed 3.45% interest rate, and leases executive office space - The company owns the real estate for nine of its ten operating restaurants[35](index=35&type=chunk) - As of January 2, 2022, the company had **$3,049,971** in mortgage obligations, refinanced in June 2021 to a lower fixed interest rate of **3.45%** for ten years[83](index=83&type=chunk) - Executive offices in West Fargo, ND, and Minnetonka, MN, are leased on a month-to-month basis for a combined total of approximately **$1,800** per month[82](index=82&type=chunk)[85](index=85&type=chunk) [Legal Proceedings](index=10&type=section&id=Item%203.%20Legal%20Proceedings%2E) The company is not currently involved in any material legal proceedings or aware of any threatened litigation - The company reports no material legal proceedings[94](index=94&type=chunk) [Mine Safety Disclosures](index=10&type=section&id=Item%204.%20Mine%20Safety%20Disclosures%2E) Mine safety disclosures are not applicable to the company's business operations - Mine safety disclosures are not applicable[96](index=96&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=11&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities%2E) The company's common stock and warrants began trading on Nasdaq in November 2021, with **6,461,118** shares outstanding as of March 15, 2022, and no plans for future cash dividends - Common stock (BTBD) and warrants (BTBDW) began trading on Nasdaq on **November 12, 2021**[100](index=100&type=chunk) - As of March 15, 2022, there were **6,461,118** shares of common stock outstanding[101](index=101&type=chunk) - The company has never paid cash dividends and does not plan to in the foreseeable future[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=11&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%2E) Fiscal 2021 saw a **3.5%** increase in net sales to **$8.45 million**, but net income declined due to a prior-year PPP loan forgiveness, while the company maintains strong liquidity post-IPO despite inflationary pressures Fiscal Year 2021 vs 2020 Performance | Metric | Fiscal 2021 (52 Weeks) | Fiscal 2020 (53 Weeks) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $8,451,870 | $8,159,796 | +3.5% | | Income from Operations | $980,712 | $529,368 | +85.3% | | Net Income | $607,851 | $791,992 | -23.2% | | Food & Paper Costs (% of Sales) | 38.9% | 37.9% | +1.0 ppt | | Labor Costs (% of Sales) | 28.2% | 28.6% | -0.4 ppt | - The decrease in net income in 2021 was primarily due to the inclusion of **$460,400** in forgiven PPP loan income in 2020, which was not repeated in 2021[144](index=144&type=chunk)[145](index=145&type=chunk) - The company's liquidity significantly improved due to its November 2021 public offering, resulting in a cash balance of **$12,385,632** and working capital of **$11,639,269** at year-end[149](index=149&type=chunk)[155](index=155&type=chunk) - Key challenges include inflationary pressure on food costs (especially beef, which rose **4%** per pound in 2021) and labor shortages leading to higher wages[117](index=117&type=chunk)[118](index=118&type=chunk) [Financial Statements and Supplementary Data](index=17&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%2E) This section provides the company's audited consolidated financial statements for fiscal years 2021 and 2020, including balance sheets, income statements, statements of shareholders' equity, and cash flows [Consolidated Balance Sheets](index=18&type=section&id=Consolidated%20Balance%20Sheets) As of January 2, 2022, total assets increased to **$14.5 million** and shareholders' equity turned positive to **$10.6 million** due to the IPO, while total liabilities decreased Consolidated Balance Sheet Highlights (as of year-end) | Account | Jan 2, 2022 | Jan 3, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $12,385,632 | $1,321,244 | | Total Current Assets | $12,564,579 | $1,406,198 | | Total Assets | $14,505,727 | $3,389,165 | | **Liabilities & Equity** | | | | Total Current Liabilities | $925,310 | $1,034,505 | | Total Liabilities | $3,877,347 | $4,091,488 | | Total Shareholders' Equity (Deficit) | $10,628,353 | ($702,323) | [Consolidated Statements of Income](index=19&type=section&id=Consolidated%20Statements%20of%20Income) Fiscal 2021 sales increased to **$8.45 million**, with income from operations growing significantly, though net income declined to **$607,851** due to the absence of prior-year PPP loan forgiveness Consolidated Statement of Income Summary | Account | 52 Weeks Ended Jan 2, 2022 | 53 Weeks Ended Jan 3, 2021 | | :--- | :--- | :--- | | Sales | $8,451,870 | $8,159,796 | | Total Costs and Expenses | $7,471,158 | $7,630,428 | | Income from Operations | $980,712 | $529,368 | | Other Income | $0 | $466,758 | | Net Income | $607,851 | $791,992 | | Net Income Per Share (Basic & Diluted) | $0.14 | $0.20 | [Consolidated Statements of Cash Flows](index=20&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Fiscal 2021 saw **$813,955** in operating cash flow, **$207,920** used in investing, and **$10.46 million** provided by financing, primarily from the public offering, leading to an **$11.06 million** net cash increase Consolidated Statement of Cash Flows Summary | Cash Flow Category | 52 Weeks Ended Jan 2, 2022 | 53 Weeks Ended Jan 3, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $813,955 | $1,397,519 | | Net cash (used in) provided by investing activities | ($207,920) | $24,580 | | Net cash provided by (used in) financing activities | $10,458,353 | ($358,956) | | **Change in Cash** | **$11,064,388** | **$1,063,143** | [Controls and Procedures](index=26&type=section&id=Item%209A.%20Controls%20and%20Procedures%2E) Management concluded that disclosure controls and procedures were not effective as of January 2, 2022, due to an unremediated material weakness in internal control over financial reporting related to income tax accounting for acquired assets - Management concluded that as of January 2, 2022, the company's disclosure controls and procedures were not effective at a reasonable assurance level[243](index=243&type=chunk) - A material weakness exists in internal control over financial reporting related to the failure to correctly calculate deferred income taxes associated with acquired assets[247](index=247&type=chunk) - The company is in the process of remediating the material weakness but concluded it did not maintain effective internal control over financial reporting as of the end of the fiscal year[248](index=248&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=27&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance%2E) The company's leadership includes CEO Gary Copperud and COO Kenneth Brimmer, with a five-member Board of Directors, a majority of whom are independent, overseeing Audit and Compensation Committees and adhering to a Code of Ethics Executive Officers and Directors | Name | Age | Position | | :--- | :--- | :--- | | Gary Copperud | 63 | Chief Executive Officer and Director | | Kenneth Brimmer | 66 | Chief Operating Officer and Chairman | | Allan Anderson | 68 | Director | | Terri Tochihara-Dirks | 60 | Director | | Steven W. Schussler | 66 | Director | - The Board of Directors is composed of five members, with a majority of three independent directors[263](index=263&type=chunk)[266](index=266&type=chunk) - The board has an Audit Committee chaired by Allan Anderson and a Compensation Committee chaired by Terri Tochihara-Dirks[274](index=274&type=chunk)[276](index=276&type=chunk) [Executive Compensation](index=32&type=section&id=Item%2011.%20Executive%20Compensation%2E) In fiscal 2021, CEO Gary Copperud received **$250,000** in total compensation, while non-employee directors were granted options to purchase **5,000** shares each, under the company's 2019 Incentive Plan Summary Compensation Table (2021) | Name and Principal Position | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Gary Copperud, CEO | 150,000 | 100,000 | 0 | 250,000 | | Kenneth W. Brimmer, COO | 0 | 100,000 | 66,000 | 166,000 | - Effective January 1, 2022, Mr. Brimmer became a full-time employee with an annual salary of **$150,000**[285](index=285&type=chunk) - Upon joining the board in Q4 2021, each of the three non-employee directors was issued options to purchase **5,000** shares of common stock at an exercise price of **$5.00** per share[288](index=288&type=chunk) [Security Ownership of Certain Beneficial Owners and Management](index=33&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 15, 2022, CEO Gary Copperud beneficially owned **17.21%** of common stock, with all officers and directors collectively owning **18.67%**, and other significant stockholders holding **11.70%** each Beneficial Ownership (as of March 15, 2022) | Name of Beneficial Owner | Number of Shares | Percentage | | :--- | :--- | :--- | | **Officers and Directors** | | | | Gary Copperud | 1,118,340 | 17.21% | | All Officers and Directors as a group | 1,218,340 | 18.67% | | **5% Stockholders** | | | | Sally Copperud | 758,540 | 11.70% | | Jeffrey A. Zinnecker | 760,540 | 11.70% | | Samuel Vandeputte | 346,290 | 5.34% | | Trost Family Trust | 346,290 | 5.34% | [Certain Relationships and Related Transactions, and Director Independence](index=34&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence%2E) The company engages in related-party transactions, notably with Next Gen Ice, Inc. (NGI), where CEO Gary Copperud holds a controlling interest, and he personally guarantees the company's real estate loans - CEO Gary Copperud personally guarantees all promissory notes for the company's real estate loans[313](index=313&type=chunk) - The company has engaged in multiple transactions with Next Gen Ice, Inc. (NGI), a company where BT Brands' CEO is Chairman and a controlling shareholder. This included receiving NGI equity for a loan modification and a subsequent investment of **$229,000** in NGI preferred stock in February 2022[314](index=314&type=chunk) [Principal Accounting Fees and Services](index=35&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services%2E) Boulay, PLLP served as the independent accounting firm, with total fees of **$92,465** in fiscal 2021, primarily for audit services, an increase from **$53,576** in fiscal 2020 Accountant Fees | Fee Category | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $92,465 | $50,450 | | All Other Fees | $0 | $3,126 | | **Total Fees** | **$92,465** | **$53,576** | Part IV [Exhibits, Financial Statement Schedules](index=36&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules%2E) This section lists Form 10-K exhibits, including governance documents and certifications, noting that no financial statement schedules are provided as they are either not required or presented elsewhere - The financial statements required are included in Item 8 of Part II[325](index=325&type=chunk) - No financial statement schedules are provided[326](index=326&type=chunk)

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) BT Brands, Inc. presents its unaudited condensed consolidated financial statements for the period ended October 3, 2021, including balance sheets, income, equity, and cash flow statements, noting a subsequent **$10.67 million** net proceeds offering Consolidated Balance Sheet Highlights (Unaudited) | Account | October 3, 2021 ($) | January 3, 2021 ($) | | :--- | :--- | :--- | | **Total Current Assets** | 2,246,372 | 1,406,198 | | **Total Assets** | 4,141,361 | 3,389,165 | | **Total Current Liabilities** | 1,079,304 | 1,034,505 | | **Total Liabilities** | 4,260,417 | 4,091,488 | | **Total Shareholders' Deficit** | (119,056) | (702,323) | Consolidated Statements of Income Highlights (Unaudited) | Metric | 13 Weeks Ended Oct 3, 2021 ($) | 13 Weeks Ended Sep 27, 2020 ($) | 39 Weeks Ended Oct 3, 2021 ($) | 39 Weeks Ended Sep 27, 2020 ($) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | 2,280,999 | 2,374,454 | 6,604,554 | 6,074,222 | | **Income from Operations** | 358,743 | 355,865 | 969,415 | 626,244 | | **Net Income** | 235,827 | 254,184 | 583,267 | 815,362 | | **EPS (Basic and Diluted)** | 0.06 | 0.06 | 0.14 | 0.20 | Consolidated Statements of Cash Flows (Unaudited, 39 Weeks Ended) | Cash Flow Category | October 3, 2021 ($) | September 27, 2020 ($) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 931,332 | 1,388,964 | | **Net cash provided by (used in) investing activities** | (85,821) | 46,264 | | **Net cash used in financing activities** | (87,943) | (300,066) | | **Change in Cash** | 757,568 | 1,135,162 | - The company operates ten fast-food restaurants: nine company-owned 'Burger Time' locations and one 'International Dairy Queen' franchise[28](index=28&type=chunk) - Subsequent to the quarter end, on November 12, 2021, the company entered into an underwriting agreement to sell 2.4 million units, expecting net proceeds of approximately **$10.67 million**[55](index=55&type=chunk)[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=10&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATION) Management discusses the company's performance, noting sales growth driven by drive-thru demand, challenges from food cost inflation and competition, and improved liquidity from operating cash flow and debt refinancing [Overview and Strategy](index=10&type=section&id=Overview%20and%20Strategy) The company operates ten fast-food restaurants, focusing on a drive-thru model, facing industry trends like technology adoption and **13.7% beef cost inflation**, with a growth strategy centered on acquiring multi-unit concepts - The company's primary strategy is to serve the drive-thru and take-out segment of the quick-service restaurant industry[60](index=60&type=chunk) - The company is facing material trends including intense competition, the need for technology adoption (mobile delivery, loyalty programs), and food cost inflation. Beef costs have recently increased by approximately **13.7%**[63](index=63&type=chunk)[64](index=64&type=chunk) - The company's principal growth strategy is to acquire multi-unit restaurant concepts and individual restaurant properties at attractive multiples of earnings[67](index=67&type=chunk) [Results of Operations for the Thirteen Weeks Ended October 3, 2021](index=12&type=section&id=Results%20of%20Operations%20for%20the%20Thirteen%20Weeks%20Ended%20October%203%2C%202021) Q3 2021 net sales slightly decreased to **$2.28 million**, while income from operations remained stable, despite food and paper costs rising to **41.4% of sales** due to inflation, leading to a restaurant-level EBITDA margin decline to **21.6%** Q3 2021 vs Q3 2020 Performance | Metric | Q3 2021 ($) | Q3 2020 ($) | | :--- | :--- | :--- | | **Net Sales** | 2,280,999 | 2,374,454 | | **Income from Operations** | 358,743 | 355,865 | | **Food & Paper Costs (% of Sales)** | 41.4% | 36.4% | | **G&A Costs** | 74,415 | 188,292 | - The increase in food and paper costs was driven by inflationary pressures, though partially mitigated by a favorable fixed-price arrangement on ground beef for part of the period[83](index=83&type=chunk) - Restaurant-level EBITDA, a non-GAAP measure, decreased to **$493,563** (**21.6% margin**) from **$593,825** (**25.0% margin**) in the prior-year period[97](index=97&type=chunk) [Results of Operations for the Thirty-Nine Weeks Ended October 3, 2021](index=14&type=section&id=Results%20of%20Operations%20for%20the%20Thirty-Nine%20Weeks%20Ended%20October%203%2C%202021) For the first three quarters of 2021, net sales grew **8.7% to $6.60 million**, driving income from operations to **$969,415** and improving restaurant-level EBITDA margin to **21.8%** due to better labor leverage and higher sales volumes 39-Week 2021 vs 2020 Performance | Metric | 39 Weeks 2021 ($) | 39 Weeks 2020 ($) | | :--- | :--- | :--- | | **Net Sales** | 6,604,554 | 6,074,222 | | **Income from Operations** | 969,415 | 626,244 | | **Food & Paper Costs (% of Sales)** | 39.1% | 37.9% | | **Restaurant-level EBITDA Margin** | 21.8% | 18.7% | - The **8.7%** increase in sales was principally the result of a favorable consumer response to the pandemic, leading more consumers to choose Burger Time's drive-thru model[98](index=98&type=chunk) - General and administrative costs decreased by **25.7%** or **$76,058**, partly due to lower management headcount[107](index=107&type=chunk) [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly strengthened with cash at **$2.08 million** and working capital at **$1.18 million**, driven by **$931,322** in operating cash flow and a mortgage debt refinancing that lowered the interest rate from **4.75% to 3.45%** - As of October 3, 2021, the company had **$2,078,812** in cash and working capital of **$1,176,068**, an increase of **$765,794** from January 3, 2021[112](index=112&type=chunk) - The company generated **$931,322** in pre-tax cash flow from operations in the 39-week period ending October 3, 2021[116](index=116&type=chunk) - The company refinanced most of its outstanding mortgage debt, lowering its nominal interest cost from **4.75% to 3.45%**, fixed for the next ten years[120](index=120&type=chunk) [Quantitative and Qualitative Disclosure about Market Risk](index=18&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) As a smaller reporting company, BT Brands is exempt from detailed market risk disclosure but identifies commodity price risk, particularly a **10% increase in beef costs** adding **$150,000** to annual expenses, and revenue seasonality as key exposures - The company is a smaller reporting company and is not required to provide the information under this item[134](index=134&type=chunk) - The company is subject to volatility in food costs, especially beef. A **ten percent increase** in the cost of beef would result in approximately **$150,000** of additional annual food costs[121](index=121&type=chunk) - The company's revenue is subject to seasonality, typically being lower in the first and fourth quarters due to weather and holiday closures[123](index=123&type=chunk) [Controls and Procedures](index=18&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of October 3, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period[135](index=135&type=chunk) - There have been no changes in the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[137](index=137&type=chunk) [PART II — OTHER INFORMATION](index=18&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=18&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reports no pending legal proceedings to which it is a party or to which its property is subject - There are presently no pending legal proceedings to which the Company is a party[139](index=139&type=chunk) [Risk Factors](index=18&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, BT Brands is not required to provide risk factor disclosures in its quarterly report on Form 10-Q - The company is a smaller reporting company and is not required to provide the information required under this item[140](index=140&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=18&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company confirms no unregistered equity securities were sold during the quarter ended October 3, 2021 - During the quarter ended October 3, 2021, the Company did not sell any securities[142](index=142&type=chunk) [Other Information](index=19&type=section&id=ITEM%205.%20OTHER%20INFORMATION) A significant subsequent event on November 12, 2021, involved an Underwriting Agreement to sell **2.4 million units**, expecting approximately **$10.67 million** in net proceeds to fund growth and acquisition strategy - Effective November 12, 2021, the Company entered into an Underwriting Agreement to sell **2,400,000 units**, each comprising one share of common stock and one five-year warrant to purchase a share at **$5.50**[145](index=145&type=chunk) - The company estimates net proceeds from the offering will be approximately **$10,665,000**, or **$12,321,000** if the underwriters' over-allotment option is fully exercised[145](index=145&type=chunk) [Other Items (Defaults, Mine Safety, Exhibits)](index=19&type=section&id=Other%20Items%20(3%2C%204%2C%206)) This section consolidates minor disclosures, reporting no defaults on senior securities, confirming mine safety disclosures are not applicable, and providing a list of exhibits filed with the 10-Q report - Item 3: The company reports no defaults upon senior securities[143](index=143&type=chunk) - Item 4: Mine safety disclosures are not applicable[144](index=144&type=chunk) - Item 6: A list of exhibits filed with the report is provided, including officer certifications and XBRL data[147](index=147&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: July 4, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 333-233233 BT BRANDS, INC. (Exact name of registrant as specified in its charter) | --- | --- | --- | --- | |--------------- ...

10-Q 1 btbd_10q.htm FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: April 4, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 333-233233 BT BRANDS, INC. (Exact name of registrant as specified in its charter) Wyoming ...