BT Brands, Inc.
For the period ended Dec 28, 2025. Filed Mar 30, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 30, 2026
BTBD$1.56-1.9%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-29; filed 2025-03-31.
0001477932-25-002248
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2025-12-28; filed 2026-03-30.
0001477932-26-001755
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 120 previous paragraphs and 113 current paragraphs.
11 unchanged; 17 reworded; 84 added; 92 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (84)
Current report
An investment in our securities involves a high degree of risk. You should carefully consider the risks described below, together with the other information in this Annual Report. The risks described are not the only risks we face, and additional risks not presently known or that we currently deem immaterial may also impair our business. If any of the following risks occur, our business, financial condition, results of operations, and cash flow could be materially adversely affected, and the market price of our common stock and warrants could decline.
Current report
Risks Related to the Proposed Business Combination with Aero Velocity
Current report
The proposed Merger with Aero Velocity may not be completed on the anticipated terms or timeline, or at all.
Current report
The proposed business combination with Aero Velocity Inc. (“Aero”) is subject to numerous conditions, including stockholder approval, the effectiveness of required registration statements, regulatory and exchange approvals, and the satisfaction or waiver of customary closing conditions. There can be no assurance that these conditions will be satisfied or waived. Regulatory review, SEC comments, financing conditions, or other factors could delay or prevent completion.
Current report
If the transaction is not completed, we may incur substantial legal, accounting, advisory, and other transaction-related expenses without realizing anticipated benefits. The pendency of the transaction may also create operational disruption, harm relationships with employees and business partners, and adversely affect our stock price.
Current report
The proposed Merger will fundamentally change the nature of our business, and our historical results will not be indicative of future performance.
Current report
If completed, the combined company is expected to focus primarily on unmanned aerial vehicle manufacturing and related services rather than restaurant operations. Our historical financial statements reflect restaurant operations and will not be indicative of the future performance, financial condition, or risk profile of the combined company.
Current report
The transaction represents a significant strategic shift into an industry with different capital requirements, regulatory frameworks, operational risks, and competitive dynamics. Investors who purchased our securities based on our historical restaurant operations will own securities in a company operating in a different industry. If the combined company fails to execute its business plan, the value of our securities could decline materially.
Current report
If the proposed Merger is completed, our existing stockholders will experience substantial dilution and reduced voting power, and Aero stockholders are expected to obtain control of the combined company.
Current report
Upon completion of the proposed business combination, our existing stockholders are expected to hold a minority ownership interest in the combined company. The transaction contemplates the issuance of a significant amount of convertible preferred stock to Aero stockholders. A certain series of this preferred stock is expected to carry voting rights that are disproportionate to its economic ownership, including enhanced voting rights on an as-converted basis.
Current report
As a result, Aero stockholders are expected to control the election of directors and the outcome of matters submitted to a stockholder vote. Our existing common stockholders will have limited ability to influence corporate governance, strategic decisions, or other significant matters, and the market price of our common stock could be adversely affected.
Current report
In addition, conversion of the preferred stock into common stock at the stated conversion price could result in substantial dilution to existing stockholders, particularly if the market price of our common stock is below or near the conversion price at the time of conversion.
Current report
The proposed spin-off of BT Group, Inc. is not expected to qualify as a tax-free transaction and may result in taxable income to our stockholders.
Current report
The contemplated spin-off of BT Group, Inc. is not expected to qualify as a tax-free transaction for U.S. federal income tax purposes. As a result, stockholders may recognize taxable income upon the distribution of BT Group shares, potentially without receiving cash to satisfy the resulting tax liabilities.
Current report
The tax treatment of the spin-off may vary depending on individual circumstances, and we do not currently intend to seek an IRS ruling regarding its tax consequences. Any taxable treatment could reduce the value received by stockholders and adversely affect trading prices.
Current report
We may not realize the anticipated benefits of the proposed business combination, and the merged company may face significant operational, financial, and strategic challenges.
Current report
Even if the proposed business combination is completed, there can be no assurance that the combined company will achieve the anticipated benefits of the transaction. Realizing those benefits will depend, among other things, on the combined company’s ability to execute its business plan, attract and retain key personnel, obtain financing on acceptable terms, manage its capital structure, comply with applicable regulatory and listing requirements, and respond effectively to competitive and market conditions.
Current report
The combined company may also face unanticipated costs, liabilities, or challenges, and management’s attention may be diverted toward integration, reporting, and strategic matters following the transaction, which could adversely affect operating performance.
Current report
The proposed spin-off of BT Group, Inc., may not be completed, may be delayed, or may not achieve its intended objectives.
Current report
The proposed business combination with Aero contemplates a spin-off of BT Group, Inc., which would hold our restaurant operations and related assets and liabilities. The spin-off is subject to various conditions and approvals and may be delayed, not completed on the anticipated terms or timeline, or not completed at all. Even if completed, there can be no assurance that BT Group, Inc. will achieve a public listing, operate successfully as a standalone company, or deliver value to our stockholders.
Current report
Failure to complete the spin-off as contemplated, or adverse market or regulatory conditions affecting BT Group, Inc., could negatively affect the overall structure and anticipated benefits of the proposed transaction.
Current report
The proposed business combination could expose us to litigation, regulatory scrutiny, and stockholder claims.
Current report
Transactions of the type contemplated by the proposed business combination frequently result in litigation, including stockholder lawsuits challenging the transaction, the consideration to be received, or the disclosure provided in connection with the transaction. Defending such actions could be costly, time-consuming, and distracting to management, regardless of the outcome, and could result in significant liability or settlement costs.
Current report
In addition, regulatory authorities, including the SEC and Nasdaq, may review aspects of the proposed transaction, which could result in delays, additional disclosure requirements, or conditions to completion.
Current report
The combined company may face risks related to continued listing standards and market acceptance following the transaction.
Current report
Following completion of the proposed business combination, the combined company will remain subject to the continued listing requirements of The Nasdaq Stock Market, including requirements relating to stock price, market capitalization, stockholders’ equity, governance, and public float. There is no assurance that the combined company will be able to meet these requirements. Any failure to satisfy applicable listing standards could result in delisting, which would reduce the liquidity of the combined company’s securities, limit access to capital, and adversely affect the market price of our common stock.
Current report
If our proposed merger with Aero Velocity does not close, or if the related spin-off of our restaurant operations is not completed, our growth strategy and business outlook may change.
Current report
The Merger Agreement with Aero Velocity contemplates a spin-off of our existing restaurant operations into a new company. If either the merger or the spin-off is delayed, renegotiated, or fails to close, we may incur transaction-related costs, experience operational disruption, or be required to reassess our strategic focus. Uncertainty surrounding the Merger may also affect investor perception, employee retention, and partner relationships.
Current report
We may not be able to integrate, operate, or improve acquired businesses effectively.
Current report
The integration and operation of an acquired business may be difficult and may impose significant demands on management and our administrative and financial resources. Integration risks include, among others, implementing consistent operating standards; consolidating systems, procedures, and vendors; integrating management and personnel; retaining key employees; maintaining employee morale; adapting marketing strategies to local markets; and establishing or enhancing financial reporting systems and internal control over financial reporting. These challenges may be more pronounced if we acquire or invest in businesses outside the restaurant industry, given our management team’s limited operational experience in those markets. If we are unable to successfully integrate or operate acquired restaurants, our business, results of operations, and cash flows could be materially adversely affected.
Current report
Acquisitions may expose us to unknown liabilities, impairment charges, and other unanticipated consequences.
Current report
Acquired businesses may have liabilities that are not identified during due diligence, including employment, tax, food safety, lease, insurance, vendor, litigation, or regulatory matters. Acquired assets, including goodwill, tradenames, other intangibles, and long-lived assets, may be subject to impairment if performance does not meet expectations or market conditions deteriorate. Acquisitions outside our traditional restaurant operations may expose us to additional or different risks, including industry‑specific regulatory regimes, contractual obligations, or operational liabilities that are more difficult to identify or quantify. In addition, acquisitions may disrupt our existing operations and divert management attention, particularly in the periods immediately following a transaction.
Current report
Our growth strategy may require additional capital that may not be available on acceptable terms, or at all, and rising interest rates could increase our borrowing costs.
Current report
Our ability to pursue acquisitions and growth initiatives depends in part on our access to capital. Market conditions, our operating performance, our stock price, and other factors may limit our ability to raise funds when needed, on acceptable terms, or at all. If we raise capital through equity or convertible securities, existing stockholders may experience dilution, and new securities may have rights senior to our common stock. If we incur debt, we may be subject to restrictive covenants, collateral requirements, and increased debt service obligations, which could limit financial flexibility and adversely affect our results of operations. Higher interest rates may increase borrowing costs and reduce the availability of financing for acquisitions or other corporate purposes. Non‑restaurant acquisitions or strategic transactions may require additional or different forms of financing and could increase our capital needs and financial risk.
Current report
Pursuing acquisitions, restaurant openings, and expansion requires significant management time and resources and could reduce attention available for operating and improving our existing restaurants. Any resulting decline in operational focus could adversely affect sales, margins, service quality, employee retention, and overall operating performance.
Current report
Long-term leases and real estate commitments may create fixed obligations that could adversely affect our financial performance.
Current report
Certain acquired restaurants may be subject to long-term, non-cancellable leases and other contractual obligations that require us to pay rent, common area charges, taxes, insurance, maintenance, and other occupancy costs regardless of the restaurant’s performance. If we close or underperform in leased locations, we may remain obligated under the lease and may incur additional costs to exit, assign, or sublease. Lease renewals may also result in higher occupancy costs or the loss of desirable locations, any of which could materially adversely affect our financial condition and results of operations. While this risk is most pronounced in restaurant operations, other acquired businesses may also involve fixed contractual or capital commitments that reduce financial flexibility.
Current report
If we grow rapidly, we may not be able to manage that growth effectively.
Current report
Significant growth could strain our managerial, administrative, operational, and financial resources. To manage growth effectively, we must enhance operational and financial controls, improve information systems and reporting capabilities, and hire, train, and retain qualified personnel. Growth through acquisitions or strategic transactions outside the restaurant industry may increase these challenges due to differing business models, systems, or regulatory requirements. If we are unable to do so, our business could be harmed, and we may be unable to execute our strategy effectively.
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Removed paragraphs (92)
Previous report
Health emergencies may adversely impact our business.
Previous report
Government responses to health emergencies have significantly impacted the economy. Although our business did not experience significant adverse effects during the peak of COVID-19, its variants or another virus could negatively affect our business. Possible outcomes include declines in customer traffic at our restaurants, our inability to staff our restaurants fully, and, in more severe cases, a temporary restaurant closure, difficulty in our ability to obtain supplies, and increased commodity costs, possibly for prolonged periods of time.
Previous report
The impact of health emergencies on our business, markets, supply chain, customers, and workforce is contingent upon unpredictable future developments, which may significantly influence our business operations, liquidity, financial condition, and overall performance.
Previous report
Acquiring or opening new restaurants is subject to risks and challenges.
Previous report
We expect to face challenges if we acquire or open new restaurants; many of these challenges pose risks that are beyond our control, including, but not limited to, our ability to acquire locations at a favorable cost, the expense and other factors involved in remodeling or updating locations, hiring managerial personnel and our lack of familiarity with local regulations. Any of these challenges, as well as others we may have yet to identify, could result in significant unanticipated costs being incurred.
Previous report
As discussed throughout this Annual Report, difficulties of integration include coordinating and consolidating geographically separated systems and facilities, integrating the management and personnel of the acquired brands, maintaining employee morale and retaining key employees, implementing our management information systems and financial accounting and reporting systems, establishing and maintaining effective internal control over financial reporting, and implementing operational procedures and disciplines to control costs and increase profitability. In addition, we must have the liquidity to nurture our acquisitions financially. Given the numerous factors involved, we may not be able to identify and secure attractive restaurant acquisitions successfully, and following an acquisition, we may not be able to successfully operate the acquired business, which could have a material adverse effect on our business, financial condition, and results of operations.
Previous report
If we acquire additional restaurant businesses, the integration and operation of acquisitions may place significant demands on our management, adversely affecting our ability to manage our existing restaurants. In addition, we may be required to obtain additional financing to fund future acquisitions, and there can be no assurance that we can acquire additional financing on acceptable terms or at all.
Previous report
There are numerous factors involved in identifying, evaluating, and securing restaurant acquisition, including:
Previous report
The acquisition of existing restaurants is risky and could negatively impact our financial results.
Previous report
We are evaluating our strategy of expanding our business by acquiring existing restaurant businesses. In the event we make restaurant acquisitions in the future, any such business may be in geographic regions in which we have not operated and may offer food concepts significantly different from our existing business. Our strategy to pursue expansion through the acquisition of existing restaurant businesses is subject to risks and uncertainties, including all the risks of our current operations as outlined in this Annual Report and other factors, including:
Previous report
These factors, among the many other risks and uncertainties typically associated with acquisitions of existing businesses, could negatively impact our Company, which would have a material adverse effect on our business, financial condition, and results of operations.
Previous report
Acquisitions may have unanticipated consequences that could harm our business and our financial condition.
Previous report
Any acquisition that we pursue, whether completed or not, involves risks, including:
Previous report
Future acquisitions may be through a cash purchase transaction, the issuance of our equity securities, or a combination of both, which could result in potentially dilutive issuances of our equity securities. Alternatively, we may incur debt and assume contingent liabilities, which could harm our business and financial condition.
Previous report
Failure to manage new restaurants properly could negatively impact our operations and deplete our capital resources.
Previous report
Though we expect to retain key personnel of any existing restaurant group to assist with managing the restaurants, we may not be able to retain such personnel for any meaningful period. Moreover, even if we retain management from the acquired business, our executive officers may not manage the new restaurants profitably for numerous reasons, including our inability to predict consumer preferences and trends that drive the success of these types of restaurants. Any failure to effectively manage the restaurants comprising an acquired restaurant group could, among other negative effects, adversely impact our operations and deplete our capital resources, affecting our financial condition and the market price for our common stock.
Previous report
Our growth strategy requires substantial additional capital to execute, which may not be available.
Previous report
Our growth depends principally on acquiring new restaurants and operating those restaurants on a profitable basis. The cost of acquiring a business will be based on several factors, including the number of restaurants comprising the group and their profitability, and we may not have the resources to fund desirable acquisitions. If we require additional capital to continue our growth plans, we may seek to raise capital through equity or debt financing. If we raise additional funds through issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any future debt financing secured by us could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, making it more difficult for us to obtain additional capital and pursue business opportunities, including making further attractive acquisitions or opening new restaurants. Moreover, if we issue debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets. In addition, we might not be able to obtain additional financing on terms favorable to us, if at all. If we cannot obtain adequate financing on satisfactory terms, our ability to support our business growth and respond to business challenges could be significantly limited.
Previous report
Rising interest rates could negatively impact our performance and acquisition plans.
Previous report
Rising interest rates could significantly increase our borrowing costs or make it difficult or impossible for us to obtain financing in the future. An increased cost of borrowing would make it more expensive for us to borrow funds to acquire new businesses and negatively impact our results of operations. If we cannot obtain financing in the future, our growth could be affected.
Previous report
As we grow, management will be focused on the numerous complex and time-consuming activities required to acquire or open new restaurants and to integrate and operate an existing restaurant group. These activities may divert management’s attention from our existing restaurants, and our existing restaurants may suffer. Implementing our growth strategies may reduce the time available to manage our current restaurants, potentially harming our revenue, business, financial condition, and operations.
Previous report
We may enter into additional long-term, non-cancellable leases.
Previous report
In connection with acquired restaurants, we have entered into long-term, non-cancelable leases for the space in which such restaurants operate. Further, future acquisitions may be subject to long-term, non-cancelable leases. Under non-cancelable leases, we may be required to pay all or a portion of the real estate taxes, insurance, common area maintenance charges, and other operating costs associated with the property. In addition, non-cancelable leases may provide contingent rental payments based on sales thresholds. If acquired restaurants are subject to long-term non-cancelable leases or we enter into such leases when we acquire a restaurant and such restaurants are not profitable, and we decide to close one or more of them, we may nonetheless be committed to perform our obligations under the applicable leases including, among other things, paying the base rent and other expenses that we agreed to pay for the balance of the lease term. In addition, as leases for our restaurants expire, we may need to negotiate renewals, which could cause us to pay increased occupancy costs or close restaurants in desirable locations. These payments and costs, as well as the failure to negotiate new leases for restaurants, could have a material adverse effect on our business, financial condition, and results of operations.
Previous report
Difficulties managing our growth could adversely affect operations.
Previous report
If we experience rapid and substantial growth, it will strain our administrative infrastructure and our managerial and financial resources. To manage the significant growth of our operations, we will be required to:
Previous report
We may be unable to install adequate management information and control systems efficiently and timely. Our current or planned personnel, systems, procedures, and controls may need to be revised to support our future operations. Our business could be seriously harmed if we cannot manage growth effectively.
Previous report
Our inability to compete effectively may affect sales and restaurant-level profit margins, adversely affecting our results of operations.
Previous report
The restaurant industry is intensely competitive, with many well-established companies competing directly and indirectly with us. We compete with national, regional, locally owned, quick-service, casual, and full-service restaurants. Many of our competitors have significantly greater financial, marketing, personnel, and other resources than we do. Many of our competitors are well-established in markets where we have existing restaurants or may acquire new ones. In addition, many of our competitors have greater name recognition nationally. The failure to successfully compete with the restaurants in our markets could result in declining customer traffic and may prevent us from increasing or sustaining our revenues and profitability. Success in the restaurant industry is based on various factors, including changes in consumer tastes, nutritional and dietary trends, consumer spending, traffic patterns, and the type, number, and location of competing restaurants often affect the restaurant. Our competitors may react more efficiently and effectively to those conditions. Further, we face growing competition from the supermarket industry, with improvements in meal preparation and delivery alternatives. Additionally, there is increased competition from limited-service and fast-casual restaurants that are aggressively pursuing delivery and “to-go” programs. Meal kit delivery companies and other eat-at-home options also compete with traditional restaurants. In addition, our competitors in the past have offered and promoted price discounts on specific menu offerings, and they may continue to do so in the future. If we cannot continue to compete effectively, our traffic, sales and restaurant-level profit margins could decline, and our business, financial condition and results of operations would be adversely affected.
Previous report
Our inability to raise menu prices could result in a decline in profitability.
Previous report
We seek to increase menu prices to help offset costs, including the increased cost for commodities, minimum wages, employee benefits, insurance arrangements, construction, utilities, and other essential operating costs resulting from general inflation. If consumers do not accept menu price increases, resulting in reduced guest traffic, our financial results would be negatively affected.
Previous report
Public attitudes regarding diet and health could result in new regulations influencing consumers.
Previous report
Changes in diet attitudes, health information, or government regulations could affect consumer habits and impact our business, finances, and operations. While currently exempt from requirements, changes in laws and regulations may require us to disclose the nutritional content of our food offerings.
Previous report
We may be unable to effectively respond to changes in consumer health perceptions, successfully implement the nutrient content disclosure requirements, and adapt our menu offerings to eating habits. The imposition of menu labeling laws and an inability to keep up with consumer eating habits could materially affect our business, financial condition, results of operations, and position within the restaurant industry.
Previous report
Unfavorable publicity could reduce sales at our restaurants.
Previous report
We may face negative publicity, including comments on social media relating to aspects of our business. Public comments may address, among others, food quality, public health concerns, restaurant facilities, customer complaints or litigation alleging illness or injury, health inspection scores, the integrity of our suppliers’ food processing and other policies, practices and procedures, employee relationships or other matters at one or more of our restaurants. Negative publicity regarding our restaurants may adversely affect us, regardless of whether the comments are valid. In addition, the negative impact of adverse publicity relating to one restaurant may extend beyond the restaurant involved to affect our other restaurants. A similar risk exists concerning food service businesses that are unrelated to us if customers mistakenly associate such businesses with our operations. Employee claims against us based on, among other things, wage and hour violations, discrimination, harassment, or wrongful termination may also create not only legal and financial liability but also negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be exerted in favor of our operations. These risks are amplified because of the prevalence of social media. Adverse social media comments and negative publicity could materially adversely affect our business, financial condition, results of operations and cash flows.
Previous report
Food safety concerns could harm our business by reducing demand and increasing costs.
Previous report
The occurrence or reports of food-borne illnesses and food safety issues have occurred in the food industry and could occur in the future. Any report or publicity linking us to food-borne illness or other food safety issues, including food tampering or contamination, could adversely affect our brand, reputation, revenues, and profits. In addition, food-borne illness, food tampering, or food contamination at our competitors’ restaurants could result in negative publicity about the food service industry and adversely impact our sales.
Previous report
Furthermore, our reliance on external food suppliers and distributors increases the risk that factors outside our control could cause food-borne illness incidents and that multiple locations would be affected rather than a single restaurant. We cannot ensure that all food items are properly maintained during transport throughout the supply chain and that our employees will identify all products that may be spoiled or contaminated. Food-borne illnesses could result in temporary restaurant closings. Furthermore, any instances of food contamination, whether or not at our restaurants, could subject our suppliers or us to a food advisory, recall or withdrawal under the Food Safety Modernization Act.
Previous report
Risks Related to Inflation, Labor and Supply Chain
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Reworded paragraphs (17)
Previous wording
Our growth strategy may divert management’s attention from operating our existing restaurants.
Current wording
Our growth strategy may divert management’s attention from our existing operations.
Previous wording
We rely on Gary Copperud, our Chief Executive Officer, and Kenneth Brimmer, our Chief Operating Officer, to make all key decisions relating to our operations and finances. The unexpected loss of Messrs. Copperud or Brimmer’s services would adversely affect our business and plans for future growth. Further, neither of these individuals devotes full-time efforts to the Company, as further described under the heading “Management.”
Current wording
We rely on Gary Copperud, our Chief Executive Officer, and Kenneth Brimmer, our Chief Operating Officer and Chief Financial Officer, to make key decisions relating to our operations and finances. The loss of either executive could adversely affect our business. In addition, neither individual devotes full-time efforts to the Company, as described under “Management.” Our reliance on a limited management team may be further heightened as we evaluate and pursue growth opportunities outside our traditional areas of operation.
Previous wording
Risks Related to the Nature of Our Business and Operating in the Restaurant Industry
Current wording
Risks Related to Operating in the Restaurant Industry
Previous wording
We are subject to many federal, state, and local laws and compliance is costly and complex.
Current wording
We are subject to extensive federal, state, and local regulation, and compliance is costly and complex.
Previous wording
We may not be able to adequately protect our intellectual property, which could harm the value of our brands.
Current wording
We may not be able to adequately protect our intellectual property, which could reduce brand value.
Previous wording
Damage to our reputation could negatively impact our business, financial condition, and the results of operations.
Current wording
Damage to our reputation could adversely affect our business and our results of operations.
Previous wording
Historically, customer spending patterns for our midwestern restaurants are lowest in the first and fourth quarters of the year due to holidays, consumer habits, and adverse weather. Likewise, our restaurants in Florida may experience declines in customer spending during the summer, when Florida has fewer tourists. Our restaurant in Woods Hole, Massachusetts, experiences reduced customer traffic outside the summer months. Therefore, our quarterly results will continue to be affected by seasonality. Because of these and other factors, our financial results for any quarter may not be indicative of the results that may be achieved for a full fiscal year.
Current wording
Historically, customer spending at our midwestern restaurants is lowest in the first and fourth quarters, driven by holidays, consumer habits, and adverse weather. Likewise, our restaurants in Florida experience declines in customer spending during the summer, when fewer tourists visit. Our restaurant in Woods Hole, Massachusetts, experiences reduced customer traffic outside the summer months. Therefore, our quarterly results will continue to be affected by seasonality. Because of these and other factors, our financial results for any quarter may not be indicative of the results achieved for a full fiscal year. Seasonal fluctuations may cause volatility in our quarterly operating results and cash flows, complicating planning and adversely affecting our financial performance in certain periods.
Previous wording
Increases in hourly labor costs and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially in certain localities, could increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance. The federal government may significantly increase the federal minimum wage and tip credit wage (or eliminate the tip credit wage) and require substantially more mandated benefits than is currently required under federal law. In addition to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases could create pressure to increase salaries and other benefits paid to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage. Because we employ a large workforce, any wage increase, or expansion of benefits could significantly impact our labor costs and negatively affect our operations results. Our vendors, contractors and business partners are similarly impacted by wage and benefit cost inflation. Many have increased prices for goods and services to offset their increasing labor costs.
Current wording
Increases in hourly labor costs and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs and a diminishing pool of potential staff members when the unemployment rate falls and legal immigration is restricted, especially in certain localities, could increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance. If labor cost increases exceed our ability to adjust pricing or improve productivity, our margins and profitability could be materially adversely affected.
Previous wording
Our management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process that provides reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we will prevent or detect a misstatement of our financial statements or fraud. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and in a timely manner or to detect and prevent fraud. The identification of a material weakness could indicate a lack of controls adequate to generate accurate financial statements that, in turn, could cause a loss of investor confidence and a decline in the market price of our common stock. We cannot assure you that we will be able to remediate any material weaknesses that may be identified in future periods in a timely manner or maintain all of the controls necessary for continued compliance. Likewise, we cannot assure you that we will be able to retain sufficiently skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.
Current wording
Our management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process is designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we will prevent or detect a misstatement of our financial statements or fraud. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and in a timely manner or to detect and prevent fraud. The identification of a material weakness could indicate a lack of controls adequate to produce accurate financial statements, which, in turn, could cause a loss of investor confidence and a decline in the market price of our common stock. We cannot assure you that we will be able to remediate any material weaknesses that may be identified in future periods in a timely manner, or that we will maintain all necessary controls to maintain continued compliance. Likewise, we cannot guarantee we will be able to retain sufficiently skilled finance and accounting personnel, particularly given the increased demand for such personnel among publicly traded companies. Any failure to maintain effective internal controls could result in financial reporting errors, loss of investor confidence, regulatory scrutiny, and a decline in the market price of our common stock.
Previous wording
You may be unable to resell your shares at or above the price you paid.
Current wording
The trading price of our common stock may fluctuate significantly, and you may not be able to sell your shares at or above the price you paid. The stock market has experienced, and may continue to experience, significant volatility, and our stock price may be particularly volatile due to, among other things, our operating results, strategic initiatives, merger-related developments and announcements, and general market conditions. As a result, the market price of our common stock may decline substantially, including for reasons unrelated to our operating performance. As a result of this volatility, investors may experience significant losses, and our ability to access capital markets could be adversely affected.
Previous wording
Our articles of incorporation and by-laws include certain provisions that could have the effect of discouraging, delaying, or preventing a change of control of our company or changes in our management, including, among other things:
Current wording
Our articles of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying, or preventing a change of control of our company or changes in our management, including, among other things:
Previous wording
We likely will retain future earnings, if any, for future operations, expansion, and debt repayment, and we have no plans to pay any cash dividends in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness our subsidiaries or we incur, including our credit facility. As a result, you may not receive any return on an investment in our common stock for a price greater than that you paid.
Current wording
We will likely retain any future earnings for operations, expansion, and debt repayment, and we have no plans to pay any cash dividends in the foreseeable future. Any decision to declare and pay dividends in the future will be at the discretion of our board of directors and will depend, among other things, on our results of operations, financial condition, cash requirements, contractual restrictions, and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants in any existing or future indebtedness of our subsidiaries or us, including a credit facility. As a result, you may not receive any return on an investment in our common stock for a price greater than that you paid. As a result, investors may need to rely on stock price appreciation to achieve a return on their investment.
Previous wording
While the warrants issued in our IPO are outstanding, the holders of such warrants will be able to profit from a rise in the market price of our common stock. However, we may find it more difficult to raise additional equity capital. At the same time, the warrants are outstanding, and we may not have the capital to fund our expansion and growth plans or for other corporate purposes.
Current wording
While the warrants issued in our IPO remain outstanding, the holders of such warrants will be able to profit from an increase in the market price of our common stock. However, we may find it more difficult to raise additional equity capital. At the same time, the warrants are outstanding, and we may not have the capital to fund our expansion and growth plans or for other corporate purposes. If we are unable to raise capital on acceptable terms, our ability to fund growth initiatives and operations could be materially adversely affected.
Previous wording
Our articles of incorporation authorize the issuance of up to 2,000,000 shares of preferred stock with designations, rights and preferences that may be determined from time to time by the board of directors. Our board of directors is empowered, without stockholder approval, to create and issue a series of preferred stock with dividend, liquidation, conversion, voting, or other rights that could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying, or preventing a change in control. Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.
Current wording
Our articles of incorporation authorize the issuance of up to 2,000,000 shares of preferred stock with designations, rights and preferences that may be determined from time to time by the board of directors. Subject to applicable law, our certificate of incorporation and bylaws, and applicable stock exchange requirements, our board of directors has the authority to create and issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.
Previous wording
These provisions might discourage, delay, or prevent a change in control of our company or a change in our management. These provisions could adversely affect the voting power of holders of common stock and limit the price that investors might be willing to pay in the future for shares of our common stock.
Current wording
These provisions might discourage, delay, or prevent a change in control of our company or a change in our management. These provisions could adversely affect the voting power of holders of common stock and limit the price investors may be willing to pay for our common stock in the future.
Previous wording
Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims.
Current wording
Claims for indemnification by our directors and officers may reduce available funds to satisfy successful third-party claims.
Previous wording
We are a “smaller reporting company.” Specifically, “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Current wording
We qualify as a “smaller reporting company” under SEC rules. As a result, we are permitted to provide scaled disclosures in our SEC filings, including reduced executive compensation disclosure, and we are exempt from the requirement under Section 404(b) of the Sarbanes-Oxley Act that our independent registered public accounting firm attests to the effectiveness of our internal control over financial reporting. We may also be eligible to rely on other disclosure accommodations available to smaller reporting companies and, if applicable, emerging growth companies.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
These provisions could adversely affect the voting power of holders of common stock and limit the price investors may be willing to pay for our common stock in the future.