Company: BTBDW
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001477932-25-002248
Chunk: 177

Company: BT Brands, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1B
Chunk 177
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 in 2023 for a gain of $310,182. The Richmond location is currently offered for sale, and we believe the Richmond property will be sold above its carrying value of approximately $258,000. In 2024, we closed a leased location in Sioux Falls, South Dakota, resulting in a loss on the disposal of equipment of approximately $90,000, which is included in operating expenses. Following the end of our 2024 fiscal year on January 2, 2025, we closed the Village Bier Garten, sold certain equipment for $34,500 and assigned the remaining lease to an unrelated party. As a result, we reviewed VBG’s assets for impairment, resulting in recording an impairment loss of 371,872 in 2024. The Ham Lake, Minnesota, location was closed in January 2025. We are currently assessing alternatives for the property that we believe have value above its net book value of $424,000. Sale of Hot-N-Now Trademark Effective October 9, 2024, we completed the sale of a trademark property. The Hot-N-Now trademark, with no cost basis, was sold for an upfront cash payment of $250,000 and potential future payments of up to $150,000 based upon $10,000 per unit for each Hot-N-Now unit opened by the purchaser. A gain on the sale of an asset of $250,000 was recognized in 2024. 

 F-9Table of Contents

Leases Three of our restaurant locations are subject to leases. We evaluate leases at commencement to determine their operating or finance lease classification. Under FASB ASC Topic 842 requirements, we recognize operating and finance lease liabilities based on the present value of the minimum future lease payment over the expected lease term and recognize a corresponding right-of-use asset. We recognize lease expense related to operating leases on a straight-line basis. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. For lease agreements that contain both lease and non-lease components, the Company has elected to account for the lease and non-lease components as a single lease component. The Company has elected to not apply the requirements of ASC 842 for short-term leases. Short-term leases are defined as leases that, at the commencement date, have lease terms of twelve months or less. At lease inception, we determine the likelihood of exercising