BT Brands, Inc.

Previous wording

We estimate that the average customer transaction at Burger Time restaurants did not change significantly in the first fiscal quarter of 2026 compared to fiscal 2025, and based on our analysis, it is approximately $14.50. We continually evaluate menu pricing to manage gross margins amid fluctuating input costs. Our operating environment remains highly competitive, and numerous factors, including consumer demand, pricing sensitivity, competition, and broader economic conditions, influence sales trends.

Current wording

We estimate that the average customer transaction at Burger Time restaurants did not change significantly in the first two quarters of 2026 compared to fiscal 2025, and based on our analysis, it is approximately $18. We continually evaluate menu pricing to manage gross margins amid fluctuating input costs. Our operating environment remains highly competitive, and numerous factors, including consumer demand, pricing sensitivity, competition, and broader economic conditions, influence sales trends.

Previous wording

These investment-related losses are primarily driven by changes in the market value of publicly traded securities and are non-cash in nature with respect to unrealized losses. Excluding the impact of investment gains and losses, the Company’s operating results improved compared to the prior year period, reflecting reduced general and administrative expenses and lower food costs at Burger Time.

Current wording

Excluding the impact of investment gains and losses and the write down of the inventory of bottled water held for sale, the Company’s operating results improved compared to the prior year period, reflecting reduced general and administrative expenses and lower food costs at Burger Time.

Previous wording

Net sales for the first fiscal quarter of 2026 decreased by $387,439 to approximately $2.8 million from $3.2 million in fiscal 2025. The decrease resulted from a decline in Burger Time sales during the quarter, including the closure of the Minot Burger Time location in mid-2025. Minot contributed $121,000 to the first quarter 2025 revenue.

Current wording

Net sales for the second fiscal quarter of 2026 decreased by approximately $229,000 to approximately $3.6 million from $3.8 million in fiscal 2025. The decrease resulted from a decline in Burger Time sales during the quarter, including the closure of the Minot Burger Time location in mid-2025.

Previous wording

The cost of sales—food and paper—for the first quarter of fiscal 2026 decreased as a percentage of restaurant sales to 33.9% from 37.1% in the first quarter of fiscal 2025. This decrease was the result of menu changes, including the switch to “hand-cut” fries at Burger Time, combined with only moderate inflationary pressures on food costs.

Current wording

Cost of sales – food and paper – for the second quarter of fiscal 2026 decreased as a percentage of restaurant sales to 31.9% from 33.1% in the second quarter of fiscal 2025. This decrease was the result of menu changes, including the switch to “hand-cut” fries at Burger Time, combined with only moderate inflationary pressures on food costs.

Previous wording

For the first fiscal quarter of 2026, occupancy and other expenses increased to 17.6% of sales from 15.4% in 2025, due to the impact of a sales decrease on fixed costs.

Current wording

For the second quarter of 2026, occupancy and other expenses increased to 15.8% of sales from 14.7% in 2025, due to the impact of a sales decrease on fixed costs.

Previous wording

General and administrative costs in the first fiscal quarter of 2026 were $348,901, a decrease of $102,133 from the previous year’s first quarter of $451,034. General and administrative costs were 12.3% of sales, a decrease from 14.0% in the previous year. The decrease is the result of a concerted cost-reduction effort throughout the Company.

Current wording

General and administrative costs in the second quarter of 2026 were $333,675, a decrease of approximately $197,000 from the previous year’s second quarter of $531,057. General and administrative costs were 9.4% of sales, a decrease from 14.1% in the previous year. The decrease is the result of a concerted cost-reduction effort throughout the Company.

Previous wording

Net loss for the thirteen weeks ended March 29, 2026, was $751,011, compared to a net loss of $329,849 for the prior year period. The increase in net loss was primarily attributable to an unrealized loss of $435,615 on marketable securities during the current period, compared to an unrealized loss of $44,024 in the prior year period. The Company also recognized a realized loss on investments of $79,395 during the current period, compared to a realized gain of $95,038 in the prior year period.

Current wording

Net loss for the twenty-six weeks ended June 28, 2026, was $174,578, compared to a net loss of $274,818 for the prior year period. The reduction in net loss was primarily attributable to an unrealized gain of $399,190 on marketable securities during the current period, compared to an unrealized gain of $38,104 in the prior year period.

Previous wording

Restaurant operating costs (which refer to all costs associated with the operation of our restaurants, excluding general and administrative expenses and depreciation and amortization) as a percentage of restaurant sales increased slightly to 90.6% in the fiscal quarter of 2026 from 90.2% in the comparable period of fiscal 2025. The increase resulted from the net effect of higher labor cost as the fixed components, including minimum staffing levels, increased as a percentage of sales and lower food and paper costs resulting from menu changes, as well as the matters discussed in the “Cost of Sales - food and paper,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections below.

Current wording

Restaurant operating costs (which refer to all costs associated with the operation of our restaurants, excluding general and administrative expenses and depreciation and amortization) as a percentage of restaurant sales increased slightly to 87.1% from 86.9% in the comparable period of fiscal 2025. The increase resulted from the net effect of higher labor cost as the fixed components, including minimum staffing levels, increased as a percentage of sales early in the 2026 period, and lower food and paper costs resulting from menu changes, as well as the matters discussed in the “Cost of Sales - food and paper,” “Labor Costs,” and “Occupancy and Other Operating Costs” sections below.

Previous wording

For the first quarter of fiscal 2026, labor and benefits costs increased as a percentage of restaurant sales to 39.1% from 37.7% in fiscal 2025. The increase results from lower sales, including the impact of minimum staffing levels, which were offset by a concerted effort to monitor scheduling and actual hours across all locations.

Current wording

Labor and benefits costs increased slightly as a percentage of restaurant sales to 37.1% from 37.0% in the comparable 2025 period. The increase resulted from lower sales, including the impact of minimum staffing levels, which were offset by a concerted effort to monitor scheduling and actual hours across all locations.

Previous wording

The loss from operations for the first quarter of fiscal 2026 improved to a loss of $232,811 from a loss of $292,196 in the first quarter of 2025, reflecting lower general and administrative expenses and cost-cutting in virtually all other areas of the Company’s businesses, the closing of an unprofitable location, and the items discussed in the “Net Revenues” and “Restaurant Operating Costs” sections above.

Current wording

The loss from operations improved to a loss of $147,145 from a loss of $367,317 in the comparable period in 2025, reflecting lower general and administrative expenses and cost-cutting in virtually all other areas of the Company’s businesses, the closing of an unprofitable location, and the items discussed in the “Net Revenues” and “Restaurant Operating Costs” sections above.

Previous wording

To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, the Company uses restaurant-level EBITDA. Restaurant-level EBITDA, which is not a measure defined by GAAP. This non-GAAP operating measure is useful to both management and, we believe, investors because it represents one means of gauging the overall profitability of our recurring and controllable core restaurant operations. This measure is not indicative of our overall results, nor does restaurant-level profit accrue directly to stockholders, primarily because corporate-level expenses are excluded. Restaurant-level EBITDA should not be considered a substitute or superior to operating income calculated under GAAP. The reconciliations to operating income set forth below should be carefully evaluated.

Current wording

To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, the Company uses restaurant-level EBITDA. Restaurant-level EBITDA is not a measure defined by GAAP. This non-GAAP operating measure is useful to both management and, we believe, investors because it represents one means of gauging the overall profitability of our recurring and controllable core restaurant operations. This measure is not indicative of our overall results, nor does restaurant-level profit accrue directly to stockholders, primarily because corporate-level expenses are excluded. Restaurant-level EBITDA should not be considered a substitute or superior to operating income calculated under GAAP. The reconciliations to operating income set forth below should be carefully evaluated.

Previous wording

Recently, sales at our Burger Time business have declined. For the 13 weeks ended March 29, 2026, the restaurant’s EBITDA declined slightly from 2025 levels. We had $3.6 million in cash and marketable securities and net working capital of $3.9 million, a decrease of approximately $714,000 from December 28, 2025. The Company maintains a portfolio of marketable securities, the value of which is subject to market volatility. As a result, the Company may continue to recognize significant unrealized gains or losses in future periods, which could materially impact reported net income but would not directly affect cash flows unless such investments are sold.

Current wording

We had $4.4 million in cash and marketable securities and net working capital of $4.5 million, which is a decrease of approximately $200,000 from what we had in net working capital as of December 28, 2025. The Company maintains a portfolio of marketable securities, the value of which is subject to market volatility. As a result, the Company may continue to recognize significant unrealized gains or losses in future periods, which could materially impact reported net income but would not directly affect cash flows unless such investments are sold.

Previous wording

We anticipate that working capital deficits may be incurred and possibly increase. Our primary sources of liquidity and cash flow are operating cash flows and cash on hand. We use this to service debt, maintain our stores’ efficient operations, and increase our working capital. Our working capital position benefits from the fact that we collect cash from our customers at the point of purchase or within a few days through our credit card processor; generally, payments to our vendors are not due for 30 days.

Current wording

Although we had approximately $4.5 million of working capital at June 28, 2026, our working capital may fluctuate based on operating performance, investment activity, capital expenditures, acquisitions and other strategic transactions. Our primary sources of liquidity and cash flow are operating cash flows and cash on hand. We use this to service debt, maintain our stores’ efficient operations, and increase our working capital. Our working capital position benefits from the fact that we collect cash from our customers at the point of purchase or within a few days through our credit card processor; generally, payments to our vendors are not due for 30 days.

Previous wording

Cash flow from investing activities is the net result of our short-term investments. We have continued to improve our existing businesses, and we may pursue acquisitions in the food service and related industries, as well as other potential mergers.

Current wording

Cash flow from investing activities is primarily the net result of our short-term investments. We have continued to improve our existing businesses, and we may pursue acquisitions in the food service and related industries, as well as other potential mergers.

Previous wording

As of March 29, 2026, we had $3.6 million in contractual obligations, including $2.1 million for amounts due under mortgages on the real property on which our stores are situated and $1.5 million in operating lease obligations related to our recent acquisitions. Our monthly required payments on lease and mortgage obligations are approximately $53,000.

Current wording

As of June 28, 2026, we had $3.5 million in contractual obligations, including $2.0 million for amounts due under mortgages on the real property on which our stores are situated and $1.5 million in operating lease obligations related to our recent acquisitions. Our monthly required payments on lease and mortgage obligations are approximately $53,000.