Company: BTBDW
Filing Date: 2025-11-17
Form Type: 10-Q
Source: 0001477932-25-008407
Chunk: 13

Company: BT Brands, Inc.
Filing Date: 2025-11-17
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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We review 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, we estimate the future operating results of each restaurant. If such assets are considered impaired, the impairment is the amount by which the assets’ carrying value exceeds the assets’ fair value. Goodwill and Intangible Assets and Other Assets Goodwill is not amortized and is tested for impairment at least annually. The cost of other intangible assets is amortized over their expected useful lives.  Assets Held for Sale  The Company closed its Ham Lake, Minnesota, location in February 2025 and is reflected in the accompanying financial statements as held for sale as it meets the criteria under GAAP. Additionally the Company completed the sale of its Richmond assets on August 13, 2025 resulting in a third quarter gain the sale of assets of $288,731 which is included as a component of the gain on sale of assets in the condensed consolidated statements of operations. 

 12Table of Contents

 Income Taxes The Company follows Accounting Standards Codification (ASC 740), Accounting for Income Taxes. ASC 740 using the asset and liability approach in accounting for income taxes. Deferred tax assets and liability balances are determined based on differences between 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 be reversed. If necessary, we provide a valuation allowance 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 required.  As of September 28, 2025, we used a net combined federal and state rate of approximately 27.5% in estimating our current tax benefit. During the current period, the deferred tax assets were reduced by $175,000 primarily related to the estimated utilization of net operating loss carryforward to offset the current estimated taxable income. Because of losses in prior periods, the Company has determined that sufficient uncertainty continues regarding the future realization of the deferred tax assets. Accordingly, a valuation allowance of approximately $736,000 has been recorded as of September 28, 2025, reducing the net deferred tax asset balance to zero. The Company will continue to assess the need for a valuation allowance in future periods. Should circumstances change and sufficient positive evidence emerge