Company: BTBDW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001477932-25-002248
Chunk: 328

Company: BT Brands, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 3
Chunk 328
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 in West Fargo, North Dakota, which was terminated in January 2025, and we paid $1,350 per month in Minnetonka, Minnesota, for a combined monthly rent of approximately $1,900 in 2024.

NOTE 5 – INCOME TAXES Income taxes are accounted for in accordance with ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events included in the financial statements or tax returns. As of December 29, 2024, the Company has recorded total deferred tax assets of $616,000, primarily attributable to net operating loss carryforwards (NOLs) offset by temporary differences related to property and equipment. Management assesses the realizability of deferred tax assets annually and considers all available positive and negative evidence, including historical operating performance, taxable income projections, and reversal of deferred tax liabilities. Based on this evaluation, the Company has determined that sufficient uncertainty exists regarding the future realization of these deferred tax assets. Accordingly, a valuation allowance of $616,000 has been recorded as of December 29, 2024, reducing the net deferred tax asset balance to zero. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company will continue to assess the need for a valuation allowance in future periods. Should circumstances change and sufficient positive evidence emerge to support the realization of deferred tax assets, all or a portion of the valuation allowance may be reversed. Principally, due to accelerated tax depreciation in prior years, which allowed for the depreciation of assets acquired in a business acquisition, and the operating results in the current year, the losses for tax purposes resulted in a total estimated net operating federal loss carryforward of approximately $3.3 million at year-end 2024 and $1.9 million on December 31, 2023. These carryforwards are available for future utilization subject to taxable income limitations and under Internal Revenue Code Section 382 due to ownership changes. The Company has various state net operating loss carryforwards of $3.1 million, a portion of which will expire after 15 years beginning in 2037 and a portion of which has indefinite life subject to limitation consistent with federal tax rules.

 F-13Table of Contents

The deferred tax assets are recognized for temporary deductible differences, operating loss, and tax credit carryforwards, and deferred tax liabilities are recognized for temporary taxable differences. Temporary differences are the differences