Cover
Cover - shares | 3 Months Ended | |
Apr. 02, 2023 | May 01, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | BT BRANDS, INC. | |
Entity Central Index Key | 0001718224 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-01 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Apr. 02, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 6,246,118 | |
Entity File Number | 333-233233 | |
Entity Incorporation State Country Code | WY | |
Entity Tax Identification Number | 90-1495764 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 405 Main Avenue West | |
Entity Address Address Line 2 | Suite 2D | |
Entity Address City Or Town | West Fargo | |
Document Quarterly Report | true | |
Entity Address Postal Zip Code | 58078 | |
City Area Code | 307 | |
Security 12b Title | Common stock, $0.002 per share | |
Trading Symbol | BTBD | |
Security Exchange Name | NASDAQ | |
Document Transition Report | false | |
Entity Address State Or Province | ND | |
Local Phone Number | 274-3055 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Apr. 02, 2023 | Jan. 01, 2023 |
CURRENT ASSETS | ||
Cash | $ 5,494,401 | $ 2,150,578 |
Marketable securities | 1,378,337 | 5,994,295 |
Receivables | 14,596 | 76,948 |
Inventory | 173,007 | 158,351 |
Prepaid expenses and other current assets | 64,424 | 37,397 |
Assets held for sale | 258,751 | 446,524 |
Total current assets | 7,383,516 | 8,864,093 |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 3,258,759 | 3,294,644 |
OPERATING LEASES RIGHT-OF-USE ASSETS | 1,946,394 | 2,004,673 |
INVESTMENTS | 1,314,787 | 1,369,186 |
DEFERRED INCOME TAXES | 91,000 | 61,000 |
GOODWILL | 671,220 | 671,220 |
INTANGIBLE ASSETS, NET | 439,260 | 453,978 |
OTHER ASSETS, NET | 50,477 | 50,903 |
Total assets | 15,155,413 | 16,769,697 |
CURRENT LIABILITIES | ||
Accounts payable | 400,711 | 448,605 |
Broker margin loan | 0 | 791,370 |
Current maturities of long-term debt | 166,241 | 167,616 |
Current operating lease obligations | 193,430 | 193,430 |
Accrued expenses | 410,101 | 532,520 |
Total current liabilities | 1,170,483 | 2,133,541 |
LONG-TERM DEBT, LESS CURRENT PORTION | 2,416,905 | 2,658,477 |
NONCURRENT LEASE OBLIGATIONS | 1,771,514 | 1,825,057 |
Total liabilities | 5,358,902 | 6,617,075 |
SHAREHOLDERS' EQUITY | ||
Preferred stock, $.001 par value, 2,000,000 shares authorized, no shares outstanding at April 2, 2023 and January 1, 2023 | 0 | 0 |
Common stock, $.002 par value, 50,000,000 authorized, 6,461,118 issued and 6,246,118 shares outstanding at April 2, 2023 and 6,461,118 shares issued and 6,396,118 shares outstanding at January 1, 2023 | 12,492 | 12,792 |
Less cost of 215,000 and 65,000 common shares held in Treasury at April 2, 2023 and January 1, 2023, respectively. | (356,807) | (106,882) |
Additional paid-in capital | 11,445,135 | 11,409,235 |
Accumulated deficit | (1,304,309) | (1,162,523) |
Total shareholders' equity | 9,796,511 | 10,152,622 |
Total liabilities and shareholders' equity | $ 15,155,413 | $ 16,769,697 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 01, 2023 | Jan. 02, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
Common stock, shares par value | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,461,118 | 6,461,118 |
Common stock, shares outstanding | 6,246,118 | 6,396,118 |
common shares held in Treasury | 215,000 | 65,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||
SALES | $ 3,070,798 | $ 2,073,195 |
Restaurant operating expenses | ||
Food and paper costs | 1,290,323 | 721,583 |
Labor costs | 1,202,760 | 607,710 |
Occupancy costs | 357,125 | 174,638 |
Other operating expenses | 195,614 | 119,867 |
Depreciation and amortization expenses | 163,507 | 69,415 |
General and administrative expenses | 425,915 | 291,062 |
Gain on sale of assets held for sale | (313,688) | 0 |
Total costs and expenses | 3,321,556 | 1,984,274 |
Income (loss) from operations | (250,758) | 88,921 |
UNREALIZED GAIN ON MARKETABLE SECURITIES | 69,856 | 0 |
INTEREST EXPENSE | (25,533) | (28,271) |
INTEREST AND DIVIDEND INCOME | 89,048 | 0 |
EQUITY IN LOSS OF AFFILIATE | (54,399) | 0 |
INCOME (LOSS) BEFORE TAXES | (171,786) | 60,650 |
INCOME TAX (EXPENSE) BENEFIT | 30,000 | (18,000) |
NET INCOME (LOSS) | $ (141,786) | $ 42,650 |
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted | $ (0.02) | $ 0.01 |
WEIGHTED AVERAGE SHARES USED IN COMPUTING PER COMMON SHARE AMOUNTS - Basic and Diluted | 6,280,729 | 6,455,434 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated (Deficit) | Treasury Stock |
Balance, shares at Jan. 02, 2022 | 6,447,506 | ||||
Balance, amount at Jan. 02, 2022 | $ 10,628,353 | $ 12,895 | $ 11,215,696 | $ (600,238) | $ 0 |
Net income | 42,650 | 0 | 0 | 42,650 | 0 |
Stock based compensation | 33,500 | $ 0 | 33,500 | 0 | 0 |
Shares issued for exercise of warrants, shares | 13,612 | ||||
Shares issued for exercise of warrants, amount | 74,866 | $ 27 | 74,839 | 0 | 0 |
Balance, shares at Apr. 03, 2022 | 6,461,118 | ||||
Balance, amount at Apr. 03, 2022 | 10,779,369 | $ 12,922 | 11,324,035 | (557,588) | 0 |
Balance, shares at Jan. 01, 2023 | 6,396,118 | ||||
Balance, amount at Jan. 01, 2023 | 10,152,622 | $ 12,792 | 11,409,235 | (1,162,523) | (106,882) |
Net income | (141,786) | 0 | 0 | (141,786) | 0 |
Stock based compensation | 35,900 | $ 0 | 35,900 | 0 | 0 |
Treasury stock purchase, shares | (150,000) | ||||
Treasury stock purchase, amount | (250,225) | $ (300) | 0 | 0 | (249,925) |
Balance, shares at Apr. 02, 2023 | 6,246,118 | ||||
Balance, amount at Apr. 02, 2023 | $ 9,796,511 | $ 12,492 | $ 11,445,135 | $ (1,304,309) | $ (356,807) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Income (Loss) | $ (141,786) | $ 42,650 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities- | ||
Depreciation and amortization | 163,507 | 69,415 |
Amortization of debt issuance costs included in interest expense | 1,350 | 1,350 |
Deferred taxes | (30,000) | (25,000) |
Stock-based compensation | 35,900 | 33,500 |
Unrealized loss (gain) on marketable securities | (69,856) | 6,746 |
Investment gains | (29,177) | 0 |
Loss on equity method investment | 54,399 | 0 |
Non-cash operating lease expense | 4,736 | 0 |
Gain on sale of assets held for sale | (313,688) | |
Changes in operating assets and liabilities, net of acquisitions - | ||
Receivables | 62,352 | 56,421 |
Inventory | (14,656) | (8,291) |
Prepaid expenses and other current assets | (27,027) | (23,924) |
Other assets | 0 | (10,000) |
Accounts payable | (47,894) | 111,355 |
Accrued expenses | (122,419) | 93,511 |
Income taxes payable | 0 | (10,339) |
Net cash provided by (used in) operating activities | (474,259) | 337,394 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of net assets of Keegan's Seafood Grille | 0 | (1,150,000) |
Proceeds from sale of assets held for sale | 496,000 | |
Purchase of property and equipment | (107,017) | (10,164) |
Investment in related company | 0 | (229,000) |
Purchase of marketable securities | (1,026,917) | (260,846) |
Proceeds from sale of marketable securities | 5,741,908 | 0 |
Other assets | 0 | (32,000) |
Net cash provided by (used in) investing activities | 5,103,974 | (1,682,010) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payment on margin loan to finance the purchase of marketable secutities | (791,370) | 0 |
Proceeds from exercise of common stock warrants | 0 | 74,866 |
Principal payments on long-term debt | (244,297) | (42,237) |
Purchase of treasury shares | (250,225) | 0 |
Net cash provided by (used in) financing activities | (1,285,892) | 32,629 |
CHANGE IN CASH | 3,343,823 | (1,311,987) |
CASH, BEGINNING OF PERIOD | 2,150,578 | 12,385,632 |
CASH, END OF PERIOD | 5,494,401 | 11,073,645 |
SUPPLEMENTAL DISCLOSURES | ||
Cash paid for interest | $ 24,183 | $ 26,291 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Apr. 02, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of BT Brands, Inc., and its subsidiaries (the “Company,” “we,” “our,” “us,” or “BT Brands”) and have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All intercompany accounts and transactions have been eliminated in consolidation and have been prepared on a basis consistent in all material respects with the accounting policies for the fiscal year ending January 1, 2023. In our opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year. The accompanying Condensed Consolidated Balance Sheet as of April 2, 2023, does not include all of the disclosures required by GAAP. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of January 1, 2023, and the related notes thereto included in the Company’s Form 10-K for the fiscal year ended January 1, 2023. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and the differences could be material. The Company BT Brands, Inc. (the “Company”) was incorporated as Hartmax of NY Inc. on January 19, 2016. Effective July 30, 2018, the Company acquired 100% of BTND, LLC. We operate restaurants in the eastern two-thirds of the United States. As of April 1, 2023, including our 41.2% owned Bagger Dave’s business, we operated seventeen restaurants comprising the following: · Eight Burger Time fast-food restaurants and one Dairy Queen franchise located in the North Central region of the United States, collectively (“BTND”); · Bagger Dave’s Burger Tavern, Inc, a 41.2% owned affiliate, operates six Bagger Dave’s restaurants in Michigan, Ohio, and Indiana (“Bagger Dave’s”); · Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”); · Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”). · Village Bier Garten is a German-themed restaurant, bar, and entertainment venue in Cocoa, Florida (“VBG”). Our Dairy Queen store is operated under a franchise agreement with International Dairy Queen. We pay royalty and advertising payments to the franchisor as required by the franchise agreement. Fiscal Year Period Our fiscal year is a 52/53-week year, ending on Sunday, closest to December 31. Most years consist of four 13-week accounting periods comprising the 52-week year. All references to years in this report refer to the 13-week periods in the respective fiscal year periods. The fiscal year 2023 is 52 weeks ending December 31, 2023. Cash For purposes of reporting cash and cash flows, cash includes money market funds and is net of outstanding checks and includes, amounts on deposit at banks and deposits in transit and excludes transfers out in transit and includes brokerage account money market funds which are not insured deposits. 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. The hierarchy prioritizes unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. · Level 2 inputs are inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the entire term of the asset or liability. · Level 3 Inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to fair value measurement in its entirety. The carrying values of cash, receivables, accounts payable and other financial working capital items approximate fair value due to the short maturity nature of these instruments. On April 2, 2023, the cost of marketable securities include a bond fund at a cost of $416,570 and common stocks at a cost of $978,333 was a total cost of $1,394,903 prior to a mark-to-market reduction of $16,566. These investments are reflected in the accompanying financial statements at April 2, 2023, at the level-one quoted market price in an active market of $1,378,337. At January 1, 2023, the fair value of Level 1 investments included common stocks of $713,900 and a corporate bond exchange-traded fund (ETF) of $316,000, a total carrying value of $1,029,900, net of an unrealized mark-to-market loss of $86,422, as determined by quoted market prices in an active market. Investments Noncurrent investments at April 2, 2023, include our net equity method investment of $1,010,787 in Bagger Dave’s and our $304,000 total investment in Next Gen Ice, Inc. (NGI). In 2020, the Company received equity ownership in NGI as consideration for a loan to NGI. Upon repayment of the note, $75,000 was attributed by us to the value of the equity received, and this amount was reflected as additional interest income in 2020. The fair value determined in 2020 continues to be reflected as the value of the investment. On February 12, 2022, we invested $229,000 in Series A1 8% Cumulative Convertible Preferred Stock of NGI, including a five-year warrant to purchase 34,697 common shares of NGI at $1.65 per share. See also Note 8. Bagger Dave’s common stock is traded on the OTC Pink market and files quarterly and annual financial reports with OTCMarkets, Inc. under the Alternative Reporting Standard. The listing with OTC Markets does not require the information to be audited. For the thirteen weeks ended March 26, 2023, Bagger Dave’s had sales of $2,014,158 and a net loss of $136,153. Our 41.2% equity share in the loss was approximately $54,399 and is included in the accompanying statement of operations. Short-Term Investments Marketable Securities at January 1, 2023, include $5,000,000 face value of a United States Treasury Bills maturing March 16, 2023, purchased for $4,907,378 in August 2023. At January 1, 2023, the Treasury Bills were planned to be held until maturity and had an amortized cost value of $4,964,395. The amortized cost value approximates fair value. Receivables Receivables consist mainly of estimated rebates due from a primary vendor. Inventory Inventory consists of food, beverages and supplies and is stated at lower of cost (first-in, first-out method) or net realizable value. Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives, ranging from three to thirty years. The Company reviews long-lived assets to determine if the carrying value of these assets is recoverable based on estimated cash flows. Assets are evaluated at the lowest level for which cash flows can be identified at the restaurant level. In determining future cash flows, estimates are made by the Company for future operating results of each restaurant. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets. Land, building and equipment, operating right of use assets and certain other assets, including definite-lived intangible assets are reviewed regularly for impairment and whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of the assets to the future undiscounted net cash flow expected to be generated and is determined at the restaurant level. If an asset is determined to be impaired, the recognized impairment is measured by the amount by which the carrying amount of the asset exceeds the fair value. Impairment and Disposal of Long-Lived Assets We closed the Burger Time store in West St. Paul in 2022 and the Richmond, Indiana, store in 2018. The West St. Paul location sale was completed in February of 2023 for a gain of $313,688. The Richmond location is currently offered for sale. We believe the Richmond property will be sold at or above its current carrying value. Following the end first quarter of 2023, we completed the disposition of the St. Louis area property in lieu of unpaid property taxes. The second quarter of 2023 will reflect a gain of approximately $180,000 for the reversal of previously accrued property taxes. Income Taxes We provide for income taxes under (Accounting Standards Codification (ASC) 740), Accounting for Income Taxes. ASC 740 uses an asset and liability approach in accounting for income taxes. Deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities. They are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The deferred tax assets are reviewed periodically for recoverability, and valuation allowances are adjusted as necessary. As of April 2, 2023, the Company estimates a current tax provision at the statutory rate of approximately 27.5% The Company has no accrued interest or penalties relating to income tax obligations. The Company has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. All periods since inception remain open for inspection. Per Common Share Amounts Net income per common share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. Common stock equivalents are excluded from the computation of diluted per-share amounts if their effect is anti-dilutive. There were no dilutive shares for the periods ending in 2023 and 2022. Goodwill, Other Intangible Assets and Other Assets Goodwill is not amortized. Goodwill is tested for impairment at least annually. The cost of other intangible assets is amortized over the expected useful life. Other assets include the allocated fair value of the acquired Dairy Queen franchise agreement related to our location in Ham Lake, Minnesota, and is amortized over an estimated useful life of 14 years |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Apr. 02, 2023 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 2 – INTANGIBLE ASSETS At April 2, 2023, the value of Intangible Assets are as follows: Estimated Useful Life (Years) Original Cost Accumulated Amortization Net Carrying Value Covenants not to Compete 3 $ 98,000 $ 26,528 $ 71,472 Trademarks 15 393,000 25,512 367,788 $ 491,000 $ 51,740 $ 439,260 On January 1, 2023, intangible assets comprise4 the following: Estimated Useful Life (Years) Original Cost Accumulated Amortization Net Carrying Value Covenants not to compete 3 $ 98,000 $ (18,361 ) $ 79,639 Tradenames 15 393,000 (18,661 ) 374,339 $ 491,000 $ (37,022 ) $ 453,978 Tradename assets are being amortized over 15 years at $26,000 in amortization expense per year. The total amortization of intangible assets, including the covenants not to compete, will approximate $58,900 in 2023 and 2024 and $40,500 in 2025 and $26,200 per year thereafter for the following six years and approximately $7,500 in 2037. Total amortization expense for the 2023 13-week period was $14,718. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Apr. 02, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: April 2, 2023 January 1, 2023 Land $ 435,239 $ 485,239 Equipment 3,754,748 3,893,274 Buildings and leasehold improvements 2,367,557 2,402,157 Total property and equipment 6,557,544 6,780,670 Accumulated depreciation (3,040,034 ) (3,039,500 ) Less - property held for sale (258,751 ) (446,526 ) Net property and equipment $ 3,258,759 $ 3,294,644 Depreciation expense for the 13-week periods in 2023 and 2022 was $148,364 and $68,902, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Apr. 02, 2023 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE 4 - ACCRUED EXPENSES Accrued expenses consisted of the following at: April 2, 2023 January 1, 2023 Accrued real estate taxes $ 195,093 $ 202,436 Accrued bonus compensation 59,139 59,139 Accrued payroll and payroll taxes 25,286 156,245 Accrued sales taxes payable 91,172 70,270 Accrued vacation pay 17,663 17,663 Accrued gift card liability 21,748 25,965 Other accrued expenses - 802 $ 410,101 $ 532,520 |
LONG TERM DEBT
LONG TERM DEBT | 3 Months Ended |
Apr. 02, 2023 | |
LONG TERM DEBT | |
LONG TERM DEBT | NOTE 5 - LONG TERM DEBT Our long-term debt is as follows: April 2, 2023 January 1, 2023 Three notes payable to a bank dated June 28, 2021, due in monthly installments totaling $22,213, including principal and interest at a fixed rate of 3.45% through June 28, 2031. Beginning in July 2031, the interest rate will be equal to the greater of the “prime rate” plus .75%, or 3.45%. These notes mature on June 28, 2036. The notes are secured by mortgages covering ten BTND operating locations. BT Brands, Inc. and a shareholder of the Company guarantee the notes. $ 2,621,668 $ 2,864,484 Minnesota Small Business Emergency Loan dated April 29, 2020, payable in monthly installments of $458.33 beginning December 15, 2020, including principal and interest at 0%. This note is secured by the personal guarantee of a shareholder of the Company. Pursuant to the terms of the loan, $13,750 of the loan was forgiven on June 22, 2022 1,727 3,208 Total 2,623,501 2,867,692 Less - unamortized debt issuance costs (40,249 ) (41,599 ) Current maturities (166,241 ) (167,616 ) $ 2,416,905 $ 2,658,477 |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 3 Months Ended |
Apr. 02, 2023 | |
STOCK BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 6 - STOCK-BASED COMPENSATION In 2019, we adopted the BT Brands, Inc 2019 Incentive Plan (the “Plan”), under which the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units, and other stock and cash awards to eligible participants. As of April 2, 2023, there were 529,750 shares available for grant under the Plan. Compensation expense equal to the fair value of the options at the grant date is recognized in general and administrative expense over the applicable service period. Compensation expense for the first quarter of 2023 was $26,400 in 2023, and $9,500 related to the Contingent Share Award described below and $33,500 in 2022. Based on current estimates, we project that for current grants, approximately $180,000 in stock-based compensation expense will be recognized over the next three years at approximately $60,000 per year. As outlined in each agreement, stock options granted to employees and directors vest over four years in annual installments. Options expire ten years from the date of the grant. Compensation expense equal to the fair value of the options at the grant date is recognized in general and administrative expense over the applicable service period. We utilize the Black-Scholes option pricing model when determining the compensation cost associated with stock options issued using the following significant assumptions: · Stock price – Published trading market values of the Company’s common stock as of the grant date. · Exercise price – The stated exercise price of the stock option. · Expected life – The simplified method · Expected dividend – The rate of dividends expected to be paid over the term of the stock option. · · Volatility – Estimated volatility. Risk-free interest rate – The daily United States Treasury yield curve rate corresponding to the expected life of the award Information regarding our stock options is summarized below: Number of Weighted Average Weighted Average Remaining Term Aggregate Intrinsic Options Exercise Price (In Years) Value Options outstanding at January 1, 2023 220,250 $ 2.74 9.0 $ 0 Granted 0 0 Exercised 0 0 Canceled, forfeited, or expired 0 0 Options outstanding at April 2, 2023 220,250 $ 2.74 8.9 $ 0 Options exercisable at April 2, 2023 94,950 $ 3.18 8.9 $ 0 On February 27, 2023, the Company finalized a Contingent Incentive Share Award with senior executives. The Contingent Share Awards provides that so long as the Company’s publicly traded warrants are outstanding, senior management of the Company will be deemed to earn an aggregate award of 250,000 shares of common stock as an award upon the Company’s share price reaching $8.50 per share for 20 consecutive trading days, provided, however, participants must be employed by the Company at the time the Incentive Shares are earned. The estimated fair value of the plan is $1.00 per share, and $250,000 of compensation expense will be recognized over the remaining 2.1 years available under the Plan and $9,500 of stock-based compensation was recognized for this Agreement in the first quarter of 2023. We utilized a lattice model when determining the fair value of the Contingent Incentive Share Awards. Assumption utilized in the model include a risk-free rate of 4.4% and volatility of 63%. |
LEASES
LEASES | 3 Months Ended |
Apr. 02, 2023 | |
LEASES | |
LEASES | NOTE 7 – LEASES With the acquisition of Keegan’s net assets, we entered into a lease for approximately 2,800 square feet of restaurant space. The 131-month Keegan’s lease provides for an initial rent of $5,000 per month with an annual escalation equal to the greater of 3% or the Consumer Price Index. The lease is being accounted for as an operating lease. At the inception of the lease, we recorded an operating lease obligation and a right-of-use asset of $624,000. The present value discounted at 3.75% of the remaining lease obligation of $563,546 is reflected as a liability in the accompanying financial statements. Keegan’s lease does not provide an implicit interest rate; we used our incremental borrowing rate of 4% to determine the present value. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the lease term. Variable lease costs consist primarily of property taxes, insurance, certain utility expenses, and sales tax. Upon acquiring PIE assets, we leased approximately 3,500 square feet of restaurant and bakery production space. The terms of the 60-month lease provide for an initial rent of $10,000 per month with an annual escalation of after 24 months of 5%. The PIE lease includes three five-year renewal option periods. The PIE lease is accounted for as an operating lease. At the inception of the lease, we recorded an operating lease obligation and a right-of-use asset of $1,055,000. The present value discounted at 5% of the remaining lease obligation of $1,029,806 is reflected as a liability in the accompanying financial statements. The PIE lease did not provide an implicit interest rate; we used our estimated incremental borrowing rate of 5% to determine the present value of future lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the lease term. Variable lease costs consist primarily of property taxes, insurance, certain utility expenses, and sales tax. With the acquisition of assets of Village Bier Garten, we entered into a five-year lease with the seller for approximately 3,000 square feet of restaurant space and access to an additional 3,000 square feet of shared entertainment and seating area. The terms of the triple-net 60-month provide for an initial rent of $8,200 per month with an annual escalation of 3%. The VBG lease includes three five-year renewal option periods. The VBG lease does not provide an implicit interest rate; we used our estimated incremental borrowing rate of 5% to determine the present value of future lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the lease term. Variable lease costs consist primarily of property taxes, insurance, certain utility expenses, and sales tax. The VBG lease is accounted for as an operating lease. At the inception of the lease, we recorded an operating lease obligation and a right-of-use asset of $469,949. The present value discounted at 4.5% of the remaining lease obligation of $371,592 is reflected as a liability in the accompanying financial statements. Following is a schedule of the approximate minimum future lease payments on the operating leases as of April 2, 2023: Total Remainder 2023 $ 211,380 2024 289,076 2025 297,745 2026 306,674 2027 268,437 2028 and thereafter 1,039,438 Total future minimum lease payments 2,412,750 Less - interest (447,806 ) $ 1,964,944 The Company is a party to a month-to-month land lease agreement for one of its Burger Time locations. The net book value of the building on this land is approximately $18,500. The monthly lease payment is $1,800 plus the cost of property taxes. The weighted average remaining lease term is approximately 5.9 years. The Company also pays a monthly rent, under month-to-month arrangements, for corporate and administrative office spaces in West Fargo, North Dakota, and Minnetonka, Minnesota, for a combined monthly rent of approximately $2,200. The total operating lease expense for the 13-week period in 2023 was $93,151. Cash paid for leases during the 13-week period in 2023 totaled $97,887 and variable expenses for leased properties were $14,196. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Apr. 02, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 8 - RELATED PARTY TRANSACTION Next Gen Ice Our CEO and CFO also serve as Chairman and CFO of Next Gen Ice, Inc. (NGI). BT Brands owns 179,000 common shares, and 138,788 NGI Series A1 Preferred Shares and also holds warrants to purchase 358,000 common shares at $1.00 expiring March 31, 2028, and 34,697 warrants to purchase additional shares at $1.65 of NGI as part of a Note modification, BT Brands We received 179,000 shares of common stock in NGI as consideration for modification of a note that subsequently was paid. The common stock and warrants received in the note modification transaction were recorded at a value determined by BT Brands of $75,000. The investment in NGI does not have a readily determinable market value. Therefore, it is carried at a cost determined by BT Brands. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Apr. 02, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
CONTINGENCIES | NOTE 9 – CONTINGENCIES In the course of its business, the Company may be a party to claims and legal or regulatory actions arising from its business. However, we are unaware of any significant asserted or potential claims that could impact our financial position. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Apr. 02, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENT In April 2023, we completed the disposition of the St. Louis area property in lieu of unpaid property taxes, aa a result second quarter of 2023 will reflect a gain of approximately $180,000 for the reversal of previously accrued property taxes. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Apr. 02, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements include the accounts of BT Brands, Inc., and its subsidiaries (the “Company,” “we,” “our,” “us,” or “BT Brands”) and have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. All intercompany accounts and transactions have been eliminated in consolidation and have been prepared on a basis consistent in all material respects with the accounting policies for the fiscal year ending January 1, 2023. In our opinion, all adjustments, which are normal and recurring in nature, necessary for a fair presentation of our financial position and results of operation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year. The accompanying Condensed Consolidated Balance Sheet as of April 2, 2023, does not include all of the disclosures required by GAAP. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of January 1, 2023, and the related notes thereto included in the Company’s Form 10-K for the fiscal year ended January 1, 2023. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and the differences could be material. |
The Company | BT Brands, Inc. (the “Company”) was incorporated as Hartmax of NY Inc. on January 19, 2016. Effective July 30, 2018, the Company acquired 100% of BTND, LLC. We operate restaurants in the eastern two-thirds of the United States. As of April 1, 2023, including our 41.2% owned Bagger Dave’s business, we operated seventeen restaurants comprising the following: · Eight Burger Time fast-food restaurants and one Dairy Queen franchise located in the North Central region of the United States, collectively (“BTND”); · Bagger Dave’s Burger Tavern, Inc, a 41.2% owned affiliate, operates six Bagger Dave’s restaurants in Michigan, Ohio, and Indiana (“Bagger Dave’s”); · Keegan’s Seafood Grille in Indian Rocks Beach, Florida (“Keegan’s”); · Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts (“PIE”). · Village Bier Garten is a German-themed restaurant, bar, and entertainment venue in Cocoa, Florida (“VBG”). Our Dairy Queen store is operated under a franchise agreement with International Dairy Queen. We pay royalty and advertising payments to the franchisor as required by the franchise agreement. |
Fiscal Year | Our fiscal year is a 52/53-week year, ending on Sunday, closest to December 31. Most years consist of four 13-week accounting periods comprising the 52-week year. All references to years in this report refer to the 13-week periods in the respective fiscal year periods. The fiscal year 2023 is 52 weeks ending December 31, 2023. |
Cash | For purposes of reporting cash and cash flows, cash includes money market funds and is net of outstanding checks and includes, amounts on deposit at banks and deposits in transit and excludes transfers out in transit and includes brokerage account money market funds which are not insured deposits. |
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. The hierarchy prioritizes unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. · Level 2 inputs are inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the entire term of the asset or liability. · Level 3 Inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to fair value measurement in its entirety. The carrying values of cash, receivables, accounts payable and other financial working capital items approximate fair value due to the short maturity nature of these instruments. On April 2, 2023, the cost of marketable securities include a bond fund at a cost of $416,570 and common stocks at a cost of $978,333 was a total cost of $1,394,903 prior to a mark-to-market reduction of $16,566. These investments are reflected in the accompanying financial statements at April 2, 2023, at the level-one quoted market price in an active market of $1,378,337. At January 1, 2023, the fair value of Level 1 investments included common stocks of $713,900 and a corporate bond exchange-traded fund (ETF) of $316,000, a total carrying value of $1,029,900, net of an unrealized mark-to-market loss of $86,422, as determined by quoted market prices in an active market. |
Short-Term Investments | Marketable Securities at January 1, 2023, include $5,000,000 face value of a United States Treasury Bills maturing March 16, 2023, purchased for $4,907,378 in August 2023. At January 1, 2023, the Treasury Bills were planned to be held until maturity and had an amortized cost value of $4,964,395. The amortized cost value approximates fair value. |
Investment | Noncurrent investments at April 2, 2023, include our net equity method investment of $1,010,787 in Bagger Dave’s and our $304,000 total investment in Next Gen Ice, Inc. (NGI). In 2020, the Company received equity ownership in NGI as consideration for a loan to NGI. Upon repayment of the note, $75,000 was attributed by us to the value of the equity received, and this amount was reflected as additional interest income in 2020. The fair value determined in 2020 continues to be reflected as the value of the investment. On February 12, 2022, we invested $229,000 in Series A1 8% Cumulative Convertible Preferred Stock of NGI, including a five-year warrant to purchase 34,697 common shares of NGI at $1.65 per share. See also Note 8. Bagger Dave’s common stock is traded on the OTC Pink market and files quarterly and annual financial reports with OTCMarkets, Inc. under the Alternative Reporting Standard. The listing with OTC Markets does not require the information to be audited. For the thirteen weeks ended March 26, 2023, Bagger Dave’s had sales of $2,014,158 and a net loss of $136,153. Our 41.2% equity share in the loss was approximately $54,399 and is included in the accompanying statement of operations. |
Receivables | Receivables consist mainly of estimated rebates due from a primary vendor. |
Inventory | Inventory consists of food, beverages and supplies and is stated at lower of cost (first-in, first-out method) or net realizable value. |
Property and Equipment | Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives, ranging from three to thirty years. The Company reviews long-lived assets to determine if the carrying value of these assets is recoverable based on estimated cash flows. Assets are evaluated at the lowest level for which cash flows can be identified at the restaurant level. In determining future cash flows, estimates are made by the Company for future operating results of each restaurant. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets. Land, building and equipment, operating right of use assets and certain other assets, including definite-lived intangible assets are reviewed regularly for impairment and whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of the assets to the future undiscounted net cash flow expected to be generated and is determined at the restaurant level. If an asset is determined to be impaired, the recognized impairment is measured by the amount by which the carrying amount of the asset exceeds the fair value. |
Impairment and disposal of long lived assets | We closed the Burger Time store in West St. Paul in 2022 and the Richmond, Indiana, store in 2018. The West St. Paul location sale was completed in February of 2023 for a gain of $313,688. The Richmond location is currently offered for sale. We believe the Richmond property will be sold at or above its current carrying value. Following the end first quarter of 2023, we completed the disposition of the St. Louis area property in lieu of unpaid property taxes. The second quarter of 2023 will reflect a gain of approximately $180,000 for the reversal of previously accrued property taxes. |
Income Taxes | We provide for income taxes under (Accounting Standards Codification (ASC) 740), Accounting for Income Taxes. ASC 740 uses an asset and liability approach in accounting for income taxes. Deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities. They are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The deferred tax assets are reviewed periodically for recoverability, and valuation allowances are adjusted as necessary. As of April 2, 2023, the Company estimates a current tax provision at the statutory rate of approximately 27.5% The Company has no accrued interest or penalties relating to income tax obligations. The Company has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception. All periods since inception remain open for inspection. |
Per Common Share Amounts | Net income per common share is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. Common stock equivalents are excluded from the computation of diluted per-share amounts if their effect is anti-dilutive. There were no dilutive shares for the periods ending in 2023 and 2022. Goodwill, Other Intangible Assets and Other Assets Goodwill is not amortized. Goodwill is tested for impairment at least annually. The cost of other intangible assets is amortized over the expected useful life. Other assets include the allocated fair value of the acquired Dairy Queen franchise agreement related to our location in Ham Lake, Minnesota, and is amortized over an estimated useful life of 14 years |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | Estimated Useful Life (Years) Original Cost Accumulated Amortization Net Carrying Value Covenants not to Compete 3 $ 98,000 $ 26,528 $ 71,472 Trademarks 15 393,000 25,512 367,788 $ 491,000 $ 51,740 $ 439,260 On January 1, 2023, intangible assets comprise4 the following: Estimated Useful Life (Years) Original Cost Accumulated Amortization Net Carrying Value Covenants not to compete 3 $ 98,000 $ (18,361 ) $ 79,639 Tradenames 15 393,000 (18,661 ) 374,339 $ 491,000 $ (37,022 ) $ 453,978 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | April 2, 2023 January 1, 2023 Land $ 435,239 $ 485,239 Equipment 3,754,748 3,893,274 Buildings and leasehold improvements 2,367,557 2,402,157 Total property and equipment 6,557,544 6,780,670 Accumulated depreciation (3,040,034 ) (3,039,500 ) Less - property held for sale (258,751 ) (446,526 ) Net property and equipment $ 3,258,759 $ 3,294,644 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | April 2, 2023 January 1, 2023 Accrued real estate taxes $ 195,093 $ 202,436 Accrued bonus compensation 59,139 59,139 Accrued payroll and payroll taxes 25,286 156,245 Accrued sales taxes payable 91,172 70,270 Accrued vacation pay 17,663 17,663 Accrued gift card liability 21,748 25,965 Other accrued expenses - 802 $ 410,101 $ 532,520 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
LONG TERM DEBT | |
Summary of long term debt obligations | April 2, 2023 January 1, 2023 Three notes payable to a bank dated June 28, 2021, due in monthly installments totaling $22,213, including principal and interest at a fixed rate of 3.45% through June 28, 2031. Beginning in July 2031, the interest rate will be equal to the greater of the “prime rate” plus .75%, or 3.45%. These notes mature on June 28, 2036. The notes are secured by mortgages covering ten BTND operating locations. BT Brands, Inc. and a shareholder of the Company guarantee the notes. $ 2,621,668 $ 2,864,484 Minnesota Small Business Emergency Loan dated April 29, 2020, payable in monthly installments of $458.33 beginning December 15, 2020, including principal and interest at 0%. This note is secured by the personal guarantee of a shareholder of the Company. Pursuant to the terms of the loan, $13,750 of the loan was forgiven on June 22, 2022 1,727 3,208 Total 2,623,501 2,867,692 Less - unamortized debt issuance costs (40,249 ) (41,599 ) Current maturities (166,241 ) (167,616 ) $ 2,416,905 $ 2,658,477 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
STOCK BASED COMPENSATION | |
Schedule of stock options | Number of Weighted Average Weighted Average Remaining Term Aggregate Intrinsic Options Exercise Price (In Years) Value Options outstanding at January 1, 2023 220,250 $ 2.74 9.0 $ 0 Granted 0 0 Exercised 0 0 Canceled, forfeited, or expired 0 0 Options outstanding at April 2, 2023 220,250 $ 2.74 8.9 $ 0 Options exercisable at April 2, 2023 94,950 $ 3.18 8.9 $ 0 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
LEASES | |
Schedule of future minimum operating lease | Total Remainder 2023 $ 211,380 2024 289,076 2025 297,745 2026 306,674 2027 268,437 2028 and thereafter 1,039,438 Total future minimum lease payments 2,412,750 Less - interest (447,806 ) $ 1,964,944 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Apr. 02, 2023 | Feb. 12, 2022 | Jul. 03, 2023 | Apr. 02, 2023 | Mar. 26, 2023 | Apr. 03, 2022 | Dec. 31, 2023 | Jan. 01, 2023 | Dec. 31, 2020 | Apr. 01, 2023 | Jul. 30, 2018 | |
Cost of bond fund | $ 416,570 | ||||||||||
Cost of common stock | 978,333 | ||||||||||
Total cost of marketable securities | 1,394,903 | ||||||||||
Market reduction | 16,566 | ||||||||||
Common stock Issued | $ 713,900 | ||||||||||
Corporate bond | 316,000 | ||||||||||
Total carrying value of investment | 1,029,900 | ||||||||||
Unrealized market loss | $ 69,856 | $ 0 | $ 86,422 | ||||||||
Marketable securities | 1,378,337 | 1,378,337 | 5,000,000 | ||||||||
Amortized cost value of treasury bill | 4,964,395 | ||||||||||
Gain on sale of Burger time store in St.Paul location | $ 313,688 | ||||||||||
Gain on reversal of accrued property taxes | $ 180,000 | ||||||||||
Business Acquisition, Percentage of Voting Interests granted As consideration to related party | 27.50% | ||||||||||
Estimated useful life of the acquired Dairy Queen | 14 years | ||||||||||
Ownership percentage | 100% | ||||||||||
Total investment | $ 1,314,787 | $ 1,314,787 | $ 1,369,186 | ||||||||
Description of investment | Treasury Bills maturing March 16, 2023, purchased for $4,907,378 in August 2023 | ||||||||||
BaggersDave | |||||||||||
Ownership percentage | 41.20% | ||||||||||
Investment | |||||||||||
Equity method investment | $ 1,010,787 | ||||||||||
Total investment | $ 304,000 | ||||||||||
Additional interest income | $ 75,000 | ||||||||||
Description of investment | we invested $229,000 in Series A1 8% Cumulative Convertible Preferred Stock of NGI, including a five-year warrant to purchase 34,697 common shares of NGI at $1.65 per share | ||||||||||
Net loss in investment sale | $ 136,153 | ||||||||||
Sales of investment | $ 2,014,158 | ||||||||||
Loss percentage on equity shares | 41.20% | ||||||||||
Loss on equity shares | $ 54,399 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Apr. 02, 2023 | Jan. 01, 2023 | |
Original cost | $ 491,000 | $ 491,000 |
Accumulated Amortization | 51,740 | (37,022) |
Net carrying value | $ 439,260 | 453,978 |
Estimated Useful Life (Years) | 15 years | |
Trademarks Tradenames Websites And Social Media Accounts [Member] | ||
Original cost | $ 393,000 | 393,000 |
Accumulated Amortization | 25,512 | (18,661) |
Net carrying value | $ 367,788 | $ 374,339 |
Estimated Useful Life (Years) | 15 years | 15 years |
Covenant Not To Compete [Member] | ||
Original cost | $ 98,000 | $ 98,000 |
Accumulated Amortization | 26,528 | (18,361) |
Net carrying value | $ 71,472 | $ 79,639 |
Estimated Useful Life (Years) | 3 years | 3 years |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Apr. 02, 2023 | Dec. 31, 2022 | Jan. 01, 2023 | |
Amortization expense | $ 14,718 | $ 26,000 | |
Estimated Useful Life (Years) | 15 years | ||
Tradenames [Member] | |||
2023 | $ 58,900 | ||
2024 | 58,900 | ||
2025 | 40,500 | ||
2026 | 26,200 | ||
Thereafter 2037 | $ 7,500 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Apr. 02, 2023 | Jan. 01, 2023 |
PROPERTY AND EQUIPMENT | ||
Land | $ 435,239 | $ 485,239 |
Equipment | 3,754,748 | 3,893,274 |
Buildings and leasehold improvements | 2,367,557 | 2,402,157 |
Total property and equipment | 6,557,544 | 6,780,670 |
Accumulated depreciation | (3,040,034) | (3,039,500) |
Less - property held for sale | (258,751) | (446,526) |
Net property and equipment | $ 3,258,759 | $ 3,294,644 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 02, 2023 | Apr. 02, 2022 | |
PROPERTY AND EQUIPMENT | ||
Depreciations | $ 148,364 | $ 68,902 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Apr. 02, 2023 | Jan. 01, 2023 |
ACCRUED EXPENSES | ||
Accrued real estate taxes | $ 195,093 | $ 202,436 |
Accrued bonus compensation | 59,139 | 59,139 |
Accrued payroll taxes | 25,286 | 156,245 |
Accrued sales taxes payable | 91,172 | 70,270 |
Accrued vacation pay | 17,663 | 17,663 |
Accured gift card liability | 21,748 | 25,965 |
Other accrued expenses | 0 | 802 |
Accrued expenses | $ 410,101 | $ 532,520 |
LONGTERM DEBT (Details)
LONGTERM DEBT (Details) - USD ($) | Apr. 02, 2023 | Jan. 01, 2023 |
Notes payable to bank | $ 2,623,501 | $ 2,867,692 |
Less - unamortized debt issuance costs | (40,249) | (41,599) |
Current maturities | (166,241) | (167,616) |
Total | 2,416,905 | 2,658,477 |
April 29, 2020 [Member] | Long Term Debt [Member] | ||
Total | 1,727 | 3,208 |
Juner 28, 2021 [Member] | Long Term Debt [Member] | Shareholders [Member] | ||
Unsecured notes payable | $ 2,621,668 | $ 2,864,484 |
STOCKBASED COMPENSATION (Detail
STOCKBASED COMPENSATION (Details) | 3 Months Ended |
Apr. 02, 2023 USD ($) $ / shares shares | |
STOCK BASED COMPENSATION | |
Number of Options begining balance | shares | 220,250 |
Number of Options Granted | shares | 0 |
Number of Options Exercised | shares | 0 |
Number of Options Canceled, forfeited, or expired | shares | 0 |
Number of Options ending balance | shares | 220,250 |
Numbeer of Options exercisable | shares | 94,950 |
Weighted Average Exercise Price begining | $ / shares | $ 2.74 |
Weighted Average Exercise Price Granted | $ / shares | 0 |
Weighted Average Exercise Price Exercised | $ / shares | 0 |
Weighted Average Exercise Price Canceled, forfeited, or expired | $ / shares | 0 |
Weighted Average Exercise Price ending balance | $ / shares | 2.74 |
Weighted Average Exercise Price exercisable | $ / shares | $ 3.18 |
Remaining Contract term begining | 9 years |
Remaining Contract term Ending | 8 years 10 months 24 days |
Remaining Contract term exercisable | 8 years 10 months 24 days |
Aggregate Intrinsic value begining | $ | $ 0 |
Aggregate Intrinsic value Granted | $ | 0 |
Aggregate Intrinsic value ending | $ | 0 |
Aggregate Intrinsic value exercisable | $ | $ 0 |
STOCKBASED COMPENSATION (Deta_2
STOCKBASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 27, 2023 | Apr. 02, 2023 | Apr. 03, 2022 | |
Common shares reserved for issuance | 250,000 | ||
Expected life (in years) | 2 months 3 days | ||
Shares available for a grant | 529,750 | ||
Expected stock volatility | 63% | ||
Risk-free interest rate | 4.40% | ||
Granted Options to purchase | 250,000 | ||
Purchase price per shares | $ 8.50 | ||
Trading days | 20 consecutive | ||
Fair value of options granted during the period | $ 1 | ||
Stock-based compensation expense | $ 9,500 | ||
Employees And Director [Member] | |||
Options to purchase | 9,500 | 9,500 | |
Stock-based compensation expense | $ 60,000 | $ 26,400 | |
Compensation expense | $ 180,000 | $ 33,500 |
LEASES (Details)
LEASES (Details) | Apr. 02, 2023 USD ($) |
LEASES | |
Remainder 2023 | $ 211,380 |
2024 | 289,076 |
2025 | 297,745 |
2026 | 306,674 |
2027 | 268,437 |
2028 and thearafter | 1,039,438 |
Total future minimum lease payments | 2,412,750 |
Less - interest | (447,806) |
Present value of lease payments | $ 1,964,944 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 3 Months Ended | |
Apr. 02, 2023 USD ($) ft² | Jan. 01, 2023 USD ($) | |
Weighted average remaining lease term | 5 years 10 months 24 days | |
Cash paid for leases | $ 97,887 | |
Variable expenses | 14,196 | |
Total operating lease expense | 93,151 | |
Book value | $ 3,258,759 | $ 3,294,644 |
Incremental borrowing rate | 4.50% | |
Right-of-use asset | $ 1,946,394 | $ 2,004,673 |
PIE Assets [Member] | ||
Monthly rent | $ 10,000 | |
Lease term | 60 months | |
Restaurant space | ft² | 3,500 | |
Remaining lease obligation | $ 1,029,806 | |
Present value discounted | 5% | |
Operating lease obligation | $ 1,055,000 | |
Right-of-use asset | $ 1,055,000 | |
Annual escalation | 5% | |
VBG Assets [Member] | ||
Monthly rent | $ 8,200 | |
Lease term | 60 months | |
Restaurant space | ft² | 3,000 | |
Entertainment and seating area | ft² | 3,000 | |
Remaining lease obligation | $ 371,592 | |
Present value discounted | 5% | |
Operating lease obligation | $ 469,949 | |
Right-of-use asset | $ 469,949 | |
Annual escalation | 3% | |
Keegan Assets [Member] | ||
Lease term | 131 months | |
Restaurant space | ft² | 2,800 | |
Remaining lease obligation | $ 563,546 | |
Present value discounted | 3.75% | |
Right-of-use asset | $ 624,000 | |
Annual escalation | 3% | |
Monthly lease payment | $ 5,000 | |
Land Lease [Member] | ||
Book value | 18,500 | |
Lease payment, monthly | 1,800 | |
Corporate Office Space [Member] | ||
Monthly rent | $ 2,200 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | ||
Apr. 02, 2023 | Jan. 01, 2023 | Jan. 02, 2022 | |
Series A1 Preferred Shares, Issued | 0 | 0 | |
Exercise Price | $ 1.65 | ||
Next Gen Ice, Inc. [Member] | |||
Issuance of warrants | 179,000 | ||
Debt instrument, principal amount | $ 179,000 | ||
Next Gen Ice, Inc. [Member] | Loan Modification and Extension Agreement [Member] | |||
Issuance of warrants | 358,000 | ||
Additional Warrants purchase | 34,697 | ||
Series A1 Preferred Shares, Issued | 138,788 | ||
Exercise Price | $ 1 | $ 1 | |
Warrants expire | March 31, 2028 | ||
Common stock warrants received | $ 75,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 3 Months Ended |
Apr. 02, 2023 USD ($) | |
St Louisproperty Member | |
Gain on sale of location | $ 180,000 |