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

Company: BT Brands, Inc.
Filing Date: 2025-11-17
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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29, 2025 condensed consolidated balance sheets related to the accounting for the Village Bier Garten lease. As described in Note 7 – Leases, the Company entered into a sub-lease arrangement to win a third party in February of 2025 over the remaining term of the lease. The Company incorrectly reduced the right-of-use (“ROU”) asset and the associated operating lease liability related to the VBG lease. Under ASC 842, the existence of a sublease does not relieve a lessee of its primary obligation under the lease unless the lessor provides a legal release. Because the Company had not been released from its obligations under the lease, the ROU asset and lease liability were both understated in condensed consolidated financial statements. The error resulted in the premature derecognition of both the remaining ROU asset and lease liability. The Company assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and has determined the impact of the error is immaterial to the interim periods in fiscal year 2025. However, the Company is providing the corrections to its previously unaudited condensed consolidated financial information for the periods ended March 30, 2025, and June 29, 2025, in the paragraphs below.  Accordingly, the Company corrected the error in the current period by reinstating the remaining ROU asset and corresponding lease liability as of September 28, 2025. As further discussed in Note 7, the Company was informed in November 2025 that the lease's Assignee defaulted on payments beginning in August 2025; therefore, the consolidated condensed balance sheet reflects the full remaining lease liability, totaling approximately $215,000 as of September 28, 2025. The correction of this item had no impact on the interim periods of 2025 condensed consolidated statements of operations, statements of stockholders’ equity, or statements of cash flows.  March 30, 2025 consolidated condensed balance sheet has been corrected to reflect an operating lease liability and a right to use asset of approximately $250,000. This correction increased the previously reported operating lease right of use assets from $1,428,155 to $1,678,155. This correction increased current operating lease obligations from $182,436 to $280,480 and noncurrent operating lease obligations from $1,295,024 to $1,446,960. June 29, 2025 consolidated condensed balance sheet