BT Brands (BTBD) 10-Q 10 Nov 20 2020 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 27, 2020	Nov. 08, 2020
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	--01-03
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 27, 2020
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		8,095,004
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 27, 2020	Dec. 29, 2019
CURRENT ASSETS
Cash	$ 1,393,263	$ 258,101
Receivables	21,728	15,363
Inventory	57,618	56,432
Prepaid expenses	626	6,929
Total current assets	1,473,235	336,825
PROPERTY AND EQUIPMENT, net	1,597,635	1,650,012
LAND AND BUILDINGS HELD FOR SALE	349,244	449,244
INVESTMENT IN AND NOTE RECEIVABLE FROM RELATED COMPANY	75,000	179,000
OTHER ASSETS, net	27,184	18,458
Total assets	3,522,298	2,633,539
CURRENT LIABILITIES
Current maturities of long-term debt	240,680	277,666
Accounts payable	422,054	321,855
Accrued expenses	203,413	202,732
Income taxes payable	235,898	2,898
Total current liabilities	1,102,045	805,151
LONG-TERM DEBT, less current maturities	3,001,206	3,221,035
UNEARNED VENDOR REBATE	0	3,668
Total liabilities	4,103,251	4,029,854
COMMITMENTS AND CONTINGENCIES	0	0
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value, 2,000,000 shares authorized, no shares outstanding at September 27, 2020 and December 29, 2019	0	0
Common stock, $.001 par value, 50,000,000 authorized, 8,095,004 shares outstanding at September 27, 2020 and December 29, 2019	8,095	8,095
Additional paid-in capital	497,671	497,671
Accumulated deficit	(1,086,719)	(1,902,081)
Total shareholders' deficit	(580,953)	(1,396,315)
Total liabilities and shareholders' deficit	$ 3,522,298	$ 2,633,539

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 27, 2020	Dec. 29, 2019
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
Common stock, shares par value	$ .001	$ .001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares outstanding	8,095,004	8,095,004

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 27, 2020	Sep. 29, 2019	Sep. 27, 2020	Sep. 29, 2019
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
SALES	$ 2,374,454	$ 1,850,167	$ 6,074,222	$ 5,116,161
Restaurant operating expenses
Food and paper costs	863,997	727,095	2,299,989	2,021,258
Labor costs	624,696	570,220	1,718,703	1,624,219
Occupancy costs	170,199	156,074	504,142	538,963
Other operating expenses	121,827	108,148	313,101	259,289
Depreciation and Amortization	49,668	51,097	140,588	171,563
Impairment of assets held for sale	0	0	100,000	93,488
General and administrative	188,292	135,695	371,455	426,968
Total costs and expenses	2,018,589	1,748,329	5,447,978	5,135,748
Income (loss) from operations	355,865	101,838	626,244	(19,587)
INTEREST INCOME	28,507	0	92,707	0
OTHER INCOME	0	0	466,758	0
INTEREST EXPENSE	(45,188)	(73,211)	(136,347)	(159,964)
INCOME (LOSS) BEFORE TAXES	339,184	28,627	1,049,362	(179,551)
PROVISION FOR INCOME TAXES	(85,000)	0	(234,000)	0
NET INCOME (LOSS)	$ 254,184	$ 28,627	$ 815,362	$ (179,551)
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted	$ 0.03	$ 0	$ 0.10	$ 0
WEIGHTED AVERAGE SHARES USED IN COMPUTING PER COMMON SHARE AMOUNTS - Basic and Diluted	8,095,004	8,086,004	8,095,004	8,086,004

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 27, 2020	Sep. 29, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss)	$ 815,362	$ (179,551)
Adjustments to reconcile net income (loss) to net cash provided by operating activities-
Depreciation	139,313	171,563
Amortization of franchise agreement	1,275	1,275
Amortization of debt issuance cost	3,882	3,882
Loss on sale of property and equipment	0	1,800
Impairment of property and equipment	100,000	93,488
Deferred tax benefit	(10,000)	0
Payment of in-kind interest	39,368	0
Changes in operating assets and liabilities
Receivables	(6,365)	1,582
Inventory	(1,186)	4,042
Prepaid expenses	6,303	5,954
Accounts payable	70,999	62,183
Unearned vendor rebate	(3,668)	(4,890)
Accrued expenses	681	(2,358)
Income taxes payable	233,000	0
Net cash provided by operating activities	1,388,964	158,970
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds (advances) on notes due from related entity	104,000	(30,000)
Purchase of property and equipment	(57,736)	0
Net cash provided by (used) in investing activities	46,264	(30,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt	77,500	0
Principal payments on long-term debt	(377,566)	(198,058)
Net cash used in financing activities	(300,066)	(198,058)
CHANGE IN CASH	1,135,162	(69,088)
CASH, BEGINNING OF PERIOD	258,101	663,511
CASH, END OF PERIOD	1,393,263	594,423
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	93,096	157,377
SUPPLEMENTAL DISCLOSURE OF INVESTING AND FINANCING ACTIVITIES
Purchase of fixed assets included in accounts payable	29,200	0
Transfer of property and equipment to assets held for sale	$ 0	$ 189,640

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (DEFICIT) (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated (Deficit)
Balance, shares at Dec. 31, 2018		8,086,004
Balance, amount at Dec. 31, 2018	$ (1,041,238)	$ 8,086	$ 484,180	$ (1,533,504)
Net loss	(179,551)	$ 0	0	(179,551)
Balance, shares at Sep. 29, 2019		8,086,004
Balance, amount at Sep. 29, 2019	(1,220,789)	$ 8,086	484,180	(1,713,055)
Balance, shares at Jun. 30, 2019		8,086,004
Balance, amount at Jun. 30, 2019	(1,249,416)	$ 8,086	484,180	(1,741,682)
Net loss	28,627	$ 0	0	28,627
Balance, shares at Sep. 29, 2019		8,086,004
Balance, amount at Sep. 29, 2019	(1,220,789)	$ 8,086	484,180	(1,713,055)
Balance, shares at Dec. 29, 2019		8,095,004
Balance, amount at Dec. 29, 2019	(1,396,315)	$ 8,095	497,671	(1,902,081)
Net loss	815,362	$ 0	0	815,362
Balance, shares at Sep. 27, 2020		8,095,004
Balance, amount at Sep. 27, 2020	(580,953)	$ 8,095	497,671	(1,086,719)
Balance, shares at Jun. 28, 2020		8,095,004
Balance, amount at Jun. 28, 2020	(835,137)	$ 8,095	497,671	(1,340,903)
Net loss	254,184	$ 0	0	254,184
Balance, shares at Sep. 27, 2020		8,095,004
Balance, amount at Sep. 27, 2020	$ (580,953)	$ 8,095	$ 497,671	$ (1,086,719)

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 27, 2020
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”) have been prepared in accordance with 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 prepared on a basis consistent in all material respects with the accounting policies for the fiscal year ended December 29, 2019. 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 September 27, 2020 does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of December 29, 2019 and the related notes thereto included in the Company’s Form 10-K for the fiscal year ended December 29, 2019. 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 with the objective of acquiring an operating entity. Effective on July 30, 2018, the Company acquired 100% of the ownership BTND, LLC. in exchange for common stock in the Company through a Share Exchange Agreement (“Share Exchange”) with BTND, LLC (“BTND”), and its Members. On June 12, 2020, the Company adopted resolutions by written consent of 100% of its shareholders approving the reincorporation of the Company to the State of Wyoming from the State of Delaware which is expected to be completed in November 2020. Business The Company currently operates company-owned fast-food restaurants called Burger Time. The Company also operates one unit in Minnesota as a franchisee of International Dairy Queen. The Company operates three Burger Time locations in Minnesota, four in North Dakota, and two in South Dakota. The Company closed a store in Richmond, Indiana during 2018 which is listed for sale, resulting in a total of ten operating restaurants on September 27, 2020. The Company owns a restaurant property in St. Louis, Missouri currently held for sale. The Company’s Dairy Queen store is operated pursuant to the terms of a franchise agreement with International Dairy Queen. The Company is required to pay regular royalty and advertising payments to the franchisor and to remain in compliance with the terms of the franchise agreement. Fiscal Year Period The Company’s fiscal year is a 52/53-week year, ending on the 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. Fiscal 2020 is a 53-week year ending January 3, 2021. Cash For purposes of reporting cash and cash flows, cash is net of outstanding checks and includes, amounts on deposit at banks and deposits in transit. Receivables Receivables consists of 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 which range from three to thirty years. The Company reviews long-lived assets to determine if the carrying value of these assets may not be recoverable based on estimated cash flows. Assets are reviewed at the lowest level for which cash flows can be identified, which is at the restaurant level. In determining future cash flows, significant estimates are made by the Company with respect to future operating results of each restaurant over its remaining life. 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. Assets Held for Sale From time-to-time the Company may sell an existing operating unit or may close an operating unit and list the property for sale. A property in the St. Louis area is currently listed for sale. Also, in September of 2018 the Company closed an operating Burger Time unit in Richmond, Indiana and the Richmond property is listed for sale. In the second quarter of fiscal 2019 it was concluded to record a charge of $93,488 for impairment of the value of the Richmond location and in the second quarter of 2020 an additional $100,000 impairment charge was recorded. Income Taxes We provide for income taxes under (Accounting Standards Codification (ASC), 740), Accounting for Income Taxes. ASC 740 using an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and 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. The Company had a net operating loss carry-forward from the prior year of $153,000. In 2019, the prior losses resulted in an increase in the related deferred tax assets; however, full valuation allowances were made which reduced these deferred tax assets to zero. As of September 27, 2020, the Company estimates a current tax provision at the statutory rates of approximately 27.5% and as a result of the net operating loss carryforward offset by other timing differences including current nondeductible status of the impairment loss reserve, taxes payable are currently estimated at $235,898. As of the of fiscal year 2019, the Company had no accrued interest or penalties relating to any income tax obligations. The Company currently has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception and all periods since 2016 are still open for examination. Per Common Share Amounts Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income or (loss) per 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 computed 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 net loss per share because their effect would be anti-dilutive. There were no potentially dilutive shares outstanding as of the periods ending in 2020 and 2019, as the strike price for warrants outstanding was above the fair market price of the underlying stock in both periods. Other Assets Other assets are the allocated fair value of the acquired Dairy Queen franchise agreement related to the Company’s location in Ham Lake, Minnesota, which is being amortized over an estimated useful life of 14 years and deferred income tax benefits related to charges not currently deductible which the Company expect to realize in future periods. Payroll Protection Plan (PPP) Loans In May 2020, the Company borrowed $460,400 under the Small Business Administration’s Payroll Protection Program. Pursuant to the terms of the program, we expect that the loans will be forgiven, and the Company has filed the required documentation to complete the loan forgiveness. The Company is reasonably assured the entire amount of PPE advances will be forgiven and the anticipated loan forgiveness is reflected as “Other Income” for the nine-month period ending September 27, 2020. In accordance with current direction of the Internal Revenue Service, the payroll expenses paid with the Payroll Protection Plan proceeds have been reflected as a non-deductible expense in determining the provision for income taxes. Liquidity and Capital Resources The condensed consolidated financial statements have been prepared on a going concern basis. For the 39 weeks ended September 27, 2020, the Company earned an after-tax profit of $815,362. On September 27, 2020, the Company had $1,393,263 in cash and working capital of $371,190 an increase of $839,516 from the year-end deficit of $468,326. Covid-19 is having a significant adverse impact on the United States economy. It is difficult to predict either the ultimate impact of the Covid-19 pandemic and governmental responses on the Company’s operating results and financial condition as the situation is evolving. In May, 2020 the Company received pandemic-related loans totaling $487,900 of that amount, $460,400 was borrowed under the Small Business Administration’s Payroll Protection Program under the terms of the program we expect that the loans will be forgiven and the Company has filed the required documentation to complete the loan forgiveness. In May 2020, the Company also borrowed $27,500 at no interest under the Minnesota Small Business Emergency Loan Program. The Company expects to have sufficient cash assets to meet its obligations for a year from the issuance of these consolidated financial statements.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	9 Months Ended
	Sep. 27, 2020
PROPERTY AND EQUIPMENT
NOTE 2 - PROPERTY AND EQUIPMENT	Property and equipment consisted of the following at: 27/09/2020 29/12/2019 Land $ 525,240 $ 555,885 Equipment 2,422,521 2,390,545 Buildings 1,349,247 1,363,642 Total Property and Equipment 4,297,008 4,310,072 Accumulated depreciation (2,350,129 ) (2,210,816 ) Less - Property held for sale (349,244 ) (449,244 ) Net Property and Equipment $ 1,597,635 $ 1,650,012 Depreciation expense for the 39-week periods in 2020 and 2019 was $139,313 and $167,242, respectively.

ACCRUED EXPENSES

ACCRUED EXPENSES	9 Months Ended
	Sep. 27, 2020
ACCRUED EXPENSES
NOTE 3 - ACCRUED EXPENSES	Accrued expenses consisted of the following at the dates: 06/28/2020 12/29/2019 Accrued real estate taxes $ 24,617 $ 66,959 Accrued payroll 115,610 69,572 Accrued payroll taxes 7,416 7,058 Accrued sales taxes payable 76,909 35,380 Accrued vacation pay 24,968 23,204 Other accrued expenses 612 559 $ 250,132 $ 202,732

LONG TERM DEBT

LONG TERM DEBT	9 Months Ended
	Sep. 27, 2020
LONG TERM DEBT
NOTE 4 - LONG TERM DEBT	As a result of the many uncertainties surrounding the economy during the COVID-19 response, two of the Company’s mortgage lenders suspended and deferred current payments for a period of three months during the first half of 2020. The loans will continue to accrue interest at the stated rate, which is included in the principal. The Company had the following long term debt obligations as of: 27/09/2020 29/12/2019 Note payable to bank dated October 30, 2015 due in monthly installments of $6,916 through October 30, 2030, which includes principal and interest at a fixed rate of 4.75%. This note is secured by two of the Company's Minnesota locations and the personal guaranty of a shareholder of the Company. $ 683,311 $ 699,311 Note payable to bank dated November 16, 2015 due in monthly installments of $14,846, which includes principal and interest at fixed rate of 4.75% through November 16, 2030. This note is secured by four of the Company's North Dakota locations and the personal guaranty of a shareholder of the Company. 1,474,383 1,509,435 Note payable to bank dated October 10, 2015 due in monthly installments of $4,153 through March 11, 2030, which includes principal and interest at fixed rate of 4.75%. This note is secured by the Company's Dairy Queen location and the personal guaranty of a shareholder of the Company. 405,128 414,562 Note payable to bank dated March 11, 2016 due in monthly installments of $3,692 through March 11, 2031 which includes principal and interest at a fixed rate of 4.75%. This note is secured by one of the Company's South Dakota locations and the personal guaranty of a shareholder of the Company. 375,812 384,208 Notes payable to bank dated November 10, 2016 payable in monthly installements of $1,331 which includes principal and interest at 4%, the interest rate is subject to adjustment based on 5-year Treasury Note rate 2021 and cannot be less than 4%. This note is secured by property held for sale in Richmond Indiana and the personal guaranty of a shareholder of the Company. 143,698 151,234 Unsecured 8% notes payable to an entity controlled by shareholders of the Company dated December 26, 2017 originally due on demand after June 1, 2020. Effective May 31, 2019 a revised note was entered into due July 31, 2023 with monthly payments of $10,000. The remaining balance was paid in full in August, 2020. - 207,264 Note payable to bank dated December 28, 2018 due in monthly installments of $1,644 through December 31, 2023 which includes principal and interest at a fixed rate of 5.50%. This note is secured by the West St. Paul location and the personal guaranty of a shareholder of the Company. 187,552 192,068 Minnesota Small business emergency loan dated April, 29, 2020 payable in monthly installments of $458.33 starting December 15, 2020 which includes principal and interest at 0%. This note is sescured by the personal guaranty of a shareholder of the Company. 27,500 - 3,297,384 3,558,082 Less - unamortized debt issuance costs (55,498 ) (59,381 ) Current maturities (240,680 ) (277,666 ) Total $ 3,001,206 $ 3,221,035

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 27, 2020
RELATED PARTY TRANSACTIONS
NOTE 5 - RELATED PARTY TRANSACTIONS	BTND Trading BTND Trading is an entity separate from the Company which is owned by certain significant shareholders of the Company, from time-to-time BTND Trading has advanced funds to the Company. At the June 28, 2020, $207,729 was due to BTND Trading at 8% annual interest. In August 2020, the amount due to BTND trading was repaid in full. Next Gen Ice In 2019, the Company made cash advances to Next Gen Ice, Inc. (NGI) in the form of Series C Notes totaling a principal amount of $179,000. The Company’s CEO, Gary Copperud, is Chairman of the Board of Directors of NGI and the Company’s Chief Operating Officer, Kenneth Brimmer, is also a member of the Board of Directors of NGI and serves as Chief Financial Officer of NGI on a part-time contract basis. Mr. Copperud, and a limited liability company controlled by him together own approximately 34% of the outstanding equity of NGI. On March 2, 2020, the Series C Notes, were modified and the maturity extended to August 31, 2020. As part of the Note modification, the Company received 179,000 shares of Common Stock in Next Gen Ice from the founders of NGI representing approximately 2% of NGI shares outstanding. The also Company holds warrants to purchase 358,000 shares at a price of $1.00 per share through March 31, 2023. The common stock and common stock purchase warrants received by the Company were recorded at a value determined by the Company of $75,000. This amount was also recorded at a discount to the note receivable and was recognized as interest income over the extended term of the Note. The Company has determined that its investment in NGI does not have a readily determinable market value and therefore is carried at the cost determined by the Company at the time the shares and warrants were received. The Series C Notes were repaid in August 2020, with interest, and currently there are no outstanding amounts due to the Company from NGI.

CONTINGENCIES

CONTINGENCIES	9 Months Ended
	Sep. 27, 2020
CONTINGENCIES
NOTE 6 - CONTINGENCIES	In the course of its business, the Company may be a party to claims and legal or regulatory actions arising from the conduct of its business. The Company is not aware of any significant asserted or potential claims which could impact its financial position.

COVID-19 PANDEMIC AND EMERGENCY

COVID-19 PANDEMIC AND EMERGENCY LOAN RELIEF	9 Months Ended
	Sep. 27, 2020
COVID-19 PANDEMIC AND EMERGENCY LOAN RELIEF
NOTE 7 - COVID-19 PANDEMIC AND EMERGENCY LOAN RELIEF	On March 13, 2020, President Donald Trump declared a national emergency in response to the coronavirus (“Covid-19”) global pandemic. Covid-19 has had a significant adverse impact on the United States economy. While we have experienced some product shortages and some labor shortages, for the most part, we have continued to operate all of our locations on a drive-through basis only with some reduced hours and with some limited access to the walk-up window and any indoor seating. Indoor seating is only available in our Dairy Queen and one other location. In October we closed our Moorhead location for approximately 3 days as a result of confirmed case of Covid-19 and we performed a deep cleaning of the location and testing for the virus of our crewmembers before reopening, In November our Minot location was closed for two days as a result of positive Covid-19 tests by our employees. At this time, it is difficult to predict if the Company will face store closures in the future and the ultimate impact of the Covid-19 pandemic on the Company’s operating results, although given the drive-through nature of our locations, the impact has been positive so far. The situation and regulations surrounding government response to the pandemic are constantly changing and it is not possible to determine if the current business trends will continue. On May 1, 2020, the Company received funding in connection with “Small Business Loans” under the federal Paycheck Protection Program (the “PPP”). Pursuant to the terms of the Promissory Notes dated May 1, 2020, by BTND and BTNDDQ, L.L.C. in favor of Northview Bank. BTND borrowed $418,900 original principal amount, and BTNDDQ, L.L.C. borrowed $41,500 original principal amount. Both PPP loans were funded on May 1, 2020. The PPP Loans bear interest at 1% per annum and mature in two years from the date of disbursement of funds. Interest and principal payments under the PPP Loans will be deferred for a period of six months. The PPP Loan contains certain covenants which, among other things, restrict the borrower’s use of the proceeds of the PPP Loan to the payment of payroll costs, interest on mortgage obligations, rent obligations and utility expenses, require compliance with all other loans or other agreements with any creditor. Under the terms of the Program, we expect that the PPP Loans will be forgiven, and this outcome is reflected in the accompanying consolidated financial statements reflecting $460,400 as a grant and in included in Other Income. On April 29, 2020, BTNDDQ, L.L.C. borrowed $27,500 at no interest under the Minnesota Small Business Emergency Loan Program from Central Minnesota Development Corporation. This loan is interest free and under certain conditions up to 50% of the loan may be forgiven, BTNDDQ, L.L.C., initially, is required to make 18 monthly payments of $458.33 beginning December 15, 2020, following the initial 18 months, in the event the note does not qualify for loan forgiveness, it will be repaid in equal installments over an additional 36 months.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 27, 2020
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”) have been prepared in accordance with 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 prepared on a basis consistent in all material respects with the accounting policies for the fiscal year ended December 29, 2019. 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 September 27, 2020 does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of December 29, 2019 and the related notes thereto included in the Company’s Form 10-K for the fiscal year ended December 29, 2019.
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 with the objective of acquiring an operating entity. Effective on July 30, 2018, the Company acquired 100% of the ownership BTND, LLC. in exchange for common stock in the Company through a Share Exchange Agreement (“Share Exchange”) with BTND, LLC (“BTND”), and its Members. On June 12, 2020, the Company adopted resolutions by written consent of 100% of its shareholders approving the reincorporation of the Company to the State of Wyoming from the State of Delaware which is expected to be completed in November 2020.
Business	The Company currently operates company-owned fast-food restaurants called Burger Time. The Company also operates one unit in Minnesota as a franchisee of International Dairy Queen. The Company operates three Burger Time locations in Minnesota, four in North Dakota, and two in South Dakota. The Company closed a store in Richmond, Indiana during 2018 which is listed for sale, resulting in a total of ten operating restaurants on September 27, 2020. The Company owns a restaurant property in St. Louis, Missouri currently held for sale. The Company’s Dairy Queen store is operated pursuant to the terms of a franchise agreement with International Dairy Queen. The Company is required to pay regular royalty and advertising payments to the franchisor and to remain in compliance with the terms of the franchise agreement.
Fiscal Year Period	The Company’s fiscal year is a 52/53-week year, ending on the 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. Fiscal 2020 is a 53-week year ending January 3, 2021.
Cash	For purposes of reporting cash and cash flows, cash is net of outstanding checks and includes, amounts on deposit at banks and deposits in transit.
Receivables	Receivables consists of 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 which range from three to thirty years. The Company reviews long-lived assets to determine if the carrying value of these assets may not be recoverable based on estimated cash flows. Assets are reviewed at the lowest level for which cash flows can be identified, which is at the restaurant level. In determining future cash flows, significant estimates are made by the Company with respect to future operating results of each restaurant over its remaining life. 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.
Assets Held for Sale	From time-to-time the Company may sell an existing operating unit or may close an operating unit and list the property for sale. A property in the St. Louis area is currently listed for sale. Also, in September of 2018 the Company closed an operating Burger Time unit in Richmond, Indiana and the Richmond property is listed for sale. In the second quarter of fiscal 2019 it was concluded to record a charge of $93,488 for impairment of the value of the Richmond location and in the second quarter of 2020 an additional $100,000 impairment charge was recorded.
Income Taxes	We provide for income taxes under (Accounting Standards Codification (ASC), 740), Accounting for Income Taxes. ASC 740 using an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and 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. The Company had a net operating loss carry-forward from the prior year of $153,000. In 2019, the prior losses resulted in an increase in the related deferred tax assets; however, full valuation allowances were made which reduced these deferred tax assets to zero. As of September 27, 2020, the Company estimates a current tax provision at the statutory rates of approximately 27.5% and as a result of the net operating loss carryforward offset by other timing differences including current nondeductible status of the impairment loss reserve, taxes payable are currently estimated at $235,898. As of the of fiscal year 2019, the Company had no accrued interest or penalties relating to any income tax obligations. The Company currently has no federal or state examinations in progress, nor has it had any federal or state tax examinations since its inception and all periods since 2016 are still open for examination.
Per Common Share Amounts	Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income or (loss) per 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 computed 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 net loss per share because their effect would be anti-dilutive. There were no potentially dilutive shares outstanding as of the periods ending in 2020 and 2019, as the strike price for warrants outstanding was above the fair market price of the underlying stock in both periods.
Other Assets	Other assets are the allocated fair value of the acquired Dairy Queen franchise agreement related to the Company’s location in Ham Lake, Minnesota, which is being amortized over an estimated useful life of 14 years and deferred income tax benefits related to charges not currently deductible which the Company expect to realize in future periods.
Payroll Protection Plan (PPP) Loans	In May 2020, the Company borrowed $460,400 under the Small Business Administration’s Payroll Protection Program. Pursuant to the terms of the program, we expect that the loans will be forgiven, and the Company has filed the required documentation to complete the loan forgiveness. The Company is reasonably assured the entire amount of PPE advances will be forgiven and the anticipated loan forgiveness is reflected as “Other Income” for the nine-month period ending September 27, 2020. In accordance with current direction of the Internal Revenue Service, the payroll expenses paid with the Payroll Protection Plan proceeds have been reflected as a non-deductible expense in determining the provision for income taxes.
Liquidity and Capital Resources	The condensed consolidated financial statements have been prepared on a going concern basis. For the 39 weeks ended September 27, 2020, the Company earned an after-tax profit of $815,362. On September 27, 2020, the Company had $1,393,263 in cash and working capital of $371,190 an increase of $839,516 from the year-end deficit of $468,326. Covid-19 is having a significant adverse impact on the United States economy. It is difficult to predict either the ultimate impact of the Covid-19 pandemic and governmental responses on the Company’s operating results and financial condition as the situation is evolving. In May, 2020 the Company received pandemic-related loans totaling $487,900 of that amount, $460,400 was borrowed under the Small Business Administration’s Payroll Protection Program under the terms of the program we expect that the loans will be forgiven and the Company has filed the required documentation to complete the loan forgiveness. In May 2020, the Company also borrowed $27,500 at no interest under the Minnesota Small Business Emergency Loan Program. The Company expects to have sufficient cash assets to meet its obligations for a year from the issuance of these consolidated financial statements.

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	9 Months Ended
	Sep. 27, 2020
PROPERTY AND EQUIPMENT
Schedule of property and equipment	27/09/2020 29/12/2019 Land $ 525,240 $ 555,885 Equipment 2,422,521 2,390,545 Buildings 1,349,247 1,363,642 Total Property and Equipment 4,297,008 4,310,072 Accumulated depreciation (2,350,129 ) (2,210,816 ) Less - Property held for sale (349,244 ) (449,244 ) Net Property and Equipment $ 1,597,635 $ 1,650,012

ACCRUED EXPENSES (Tables)

ACCRUED EXPENSES (Tables)	9 Months Ended
	Sep. 27, 2020
ACCRUED EXPENSES
Schedule of accrued expenses	27/09/2020 29/12/2019 Accrued real estate taxes $ 40,162 $ 66,959 Accrued payroll 59,125 69,572 Accrued payroll taxes 11,709 7,058 Accrued sales taxes payable 66,578 35,380 Accrued vacation pay 25,211 23,204 Other accrued expenses 628 559 $ 203,413 $ 202,732

LONG TERM DEBT (Tables)

LONG TERM DEBT (Tables)	9 Months Ended
	Sep. 27, 2020
LONG TERM DEBT
Schedule of maturities of long-term debt	27/09/2020 29/12/2019 Note payable to bank dated October 30, 2015 due in monthly installments of $6,916 through October 30, 2030, which includes principal and interest at a fixed rate of 4.75%. This note is secured by two of the Company's Minnesota locations and the personal guaranty of a shareholder of the Company. $ 683,311 $ 699,311 Note payable to bank dated November 16, 2015 due in monthly installments of $14,846, which includes principal and interest at fixed rate of 4.75% through November 16, 2030. This note is secured by four of the Company's North Dakota locations and the personal guaranty of a shareholder of the Company. 1,474,383 1,509,435 Note payable to bank dated October 10, 2015 due in monthly installments of $4,153 through March 11, 2030, which includes principal and interest at fixed rate of 4.75%. This note is secured by the Company's Dairy Queen location and the personal guaranty of a shareholder of the Company. 405,128 414,562 Note payable to bank dated March 11, 2016 due in monthly installments of $3,692 through March 11, 2031 which includes principal and interest at a fixed rate of 4.75%. This note is secured by one of the Company's South Dakota locations and the personal guaranty of a shareholder of the Company. 375,812 384,208 Notes payable to bank dated November 10, 2016 payable in monthly installements of $1,331 which includes principal and interest at 4%, the interest rate is subject to adjustment based on 5-year Treasury Note rate 2021 and cannot be less than 4%. This note is secured by property held for sale in Richmond Indiana and the personal guaranty of a shareholder of the Company. 143,698 151,234 Unsecured 8% notes payable to an entity controlled by shareholders of the Company dated December 26, 2017 originally due on demand after June 1, 2020. Effective May 31, 2019 a revised note was entered into due July 31, 2023 with monthly payments of $10,000. The remaining balance was paid in full in August, 2020. - 207,264 Note payable to bank dated December 28, 2018 due in monthly installments of $1,644 through December 31, 2023 which includes principal and interest at a fixed rate of 5.50%. This note is secured by the West St. Paul location and the personal guaranty of a shareholder of the Company. 187,552 192,068 Minnesota Small business emergency loan dated April, 29, 2020 payable in monthly installments of $458.33 starting December 15, 2020 which includes principal and interest at 0%. This note is sescured by the personal guaranty of a shareholder of the Company. 27,500 - 3,297,384 3,558,082 Less - unamortized debt issuance costs (55,498 ) (59,381 ) Current maturities (240,680 ) (277,666 ) Total $ 3,001,206 $ 3,221,035

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	May 31, 2020	Sep. 27, 2020	Sep. 29, 2019	Sep. 27, 2020	Sep. 27, 2020	Sep. 29, 2019	Dec. 29, 2019	Dec. 29, 2018
Net operating loss carry forward					$ (153,000)
Working capital deficit		$ (371,190)		$ (371,190)	(371,190)
Increase in working capital deficit					$ (839,516)
Other assets estimated useful life					14 years
Earned After tax profit					$ 815,362
Cash		1,393,263	$ 594,423	1,393,263	1,393,263	$ 594,423	$ 258,101	$ 663,511
Impairment of asset held for sale		$ 0	$ 0	$ 100,000	$ 93,488	$ 93,488
Current Tax rate		27.50%		27.50%	27.50%
Additional impairment charges					$ 100,000
Loan received	$ 487,900
Taxes payable					$ 235,898
Minnesota Small Business Emergency Loan Program [Member]
Loan received	27,500
Small Business Administration Payroll Protection Program [Member]
Loan received	$ 460,400

PROPERTY AND EQUIPMENT (Details

PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 27, 2020	Dec. 29, 2019
LONG TERM DEBT
Land	$ 525,240	$ 555,885
Equipment	2,422,521	2,390,545
Buildings	1,349,247	1,363,642
Total Property and Equipment	4,297,008	4,310,072
Accumulated depreciation	(2,350,129)	(2,210,816)
Less - Property held for sale	(349,244)	(449,244)
Net property and equipment	$ 1,597,635	$ 1,650,012

PROPERTY AND EQUIPMENT (Detai_2

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	9 Months Ended
	Sep. 27, 2020	Sep. 29, 2019	Sep. 27, 2019
LONG TERM DEBT
Depreciation	$ 139,313	$ 171,563	$ 167,242

ACCRUED EXPENSES (Details)

ACCRUED EXPENSES (Details) - USD ($)	Sep. 27, 2020	Dec. 29, 2019
LONG TERM DEBT
Accrued real estate taxes	$ 40,162	$ 66,959
Accrued payroll	59,125	69,572
Accrued payroll taxes	11,709	7,058
Accrued sales taxes payable	66,578	35,380
Accrued vacation pay	25,211	23,204
Other accrued expenses	628	559
Accrued expenses	$ 203,413	$ 202,732

LONG TERM DEBT (Details)

LONG TERM DEBT (Details) - USD ($)	Sep. 27, 2020	Dec. 29, 2019
Notes payable to bank	$ 3,297,384	$ 3,558,082
Less - unamortized debt issuance costs	(55,498)	(59,381)
Notes Payable to bank, total	3,001,206	3,221,035
Current maturities	(240,680)	(277,666)
April 29, 2020 [Member] | Shareholder [Member] | Long term Debt [Member]
Notes payable	27,500	0
October 30, 2015 [Member] | Long Term Debt [Member]
Notes Payable to bank, total	683,311	699,311
November 16, 2015 [Member] | Long Term Debt [Member]
Notes Payable to bank, total	1,474,383	1,509,435
October 10, 2015 [Member] | Long Term Debt [Member]
Notes Payable to bank, total	405,128	414,562
March 11, 2016 [Member] | Long Term Debt [Member]
Notes Payable to bank, total	375,812	384,208
November 10, 2016 [Member] | Long Term Debt [Member]
Notes Payable to bank, total	143,698	151,234
December 28, 2018 [Member] | Long Term Debt [Member]
Notes Payable to bank, total	187,552	192,068
December 26, 2017 [Member] | Shareholders [Member] | Long Term Debt [Member]
Notes payable	$ 0	$ 207,264

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	Mar. 02, 2020	Jun. 28, 2020	May 01, 2020
Annual interst			1.00%
BTND, LLC. [Member]
Advance from related party		$ 207,729
Annual interst		8.00%
Next Gen Ice, Inc. [Member] | Loan Modification and Extension Agreement [Member]
Principle, Amount	$ 179,000
Exercise Price	$ 1
Maturity Extended	Aug. 31, 2020
Outstanding equity, percentage	34.00%
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Mar. 31, 2023
Ownership percentage	2.00%
Notes Due from Related Party	$ 179,000
Warrants holds upon shares purchase	358,000
Warrants holds upon shares purchase, amount	$ 75,000

COVID-19 PANDEMIC AND EMERGEN_2

COVID-19 PANDEMIC AND EMERGENCY LOAN RELIEF (Details Narrative) - USD ($)	May 02, 2020	Apr. 29, 2020	May 01, 2020
Loan received			$ 418,900
Interest rate			1.00%
Amount granted as other income	$ 460,400
Maturitiy term	2 years
BTNDDQ, L.L.C. [Member]
Loan received		$ 27,500	$ 41,500
Debt description		This loan is interest free and under certain conditions up to 50% of the loan may be forgiven, BTNDDQ, L.L.C., initially, is required to make 18 monthly payments of $458.33 beginning December 15, 2020, following the initial 18 months, in the event the note does not qualify for loan forgiveness, it will be repaid in equal installments over an additional 36 months.