NOTE 9 – RELATED PARTY TRANSACTIONS

NGI Corporation

Equity Investment and Impairment

Prior to 2025, the Company held a minority equity investment in NGI Corporation (“NGI”) with an aggregate carrying value of $304,000. During fiscal 2025, the Company evaluated the recoverability of this investment and identified impairment indicators, including recurring operating losses at NGI and its limited access to capital. As a result, the Company determined the investment was impaired and recorded a full impairment charge of $304,000, reducing the carrying value to zero. As of June 28, 2026 and December 28, 2025, the Company has no remaining carrying value related to its equity investment in NGI.

Loans, Foreclosure, and Inventory Acquisition

The Company previously provided loans to NGI and, in connection with those arrangements, obtained a senior secured interest in substantially all of NGI’s assets. During fiscal 2025, the Company advanced additional funds and funded certain costs related to aluminum water bottle inventory.

Effective December 26, 2025, the Company exercised its rights under the loan agreements and foreclosed on the collateral securing the loans. As a result, the Company obtained control of bottled water inventory, which is recorded within current assets as “Inventory – bottled water held for resale.”

The bottled water inventory is carried at the lower of cost or net realizable value. As of December 28, 2025, the Company recorded a write-down of approximately $217,000 to reflect the estimated net realizable value. During the 13-week period ending June 28, 2026, the Company recorded an additional write-down of approximately $174,000 to reflect the estimated net realizable value as of June 28, 2026 of $400,000. This write down is included in Other Income (Expense) on the Consolidated Statements of Operations.

The Company is actively pursuing the sale of this inventory; however, the timing and amount of any proceeds are uncertain. Future adjustments to the carrying value may be required based on changes in estimated selling prices, costs to sell, or market conditions.

Related Party Considerations

Kenneth Brimmer, the Company’s former Chief Financial Officer, served as a member of NGI’s board of directors and as its Chief Financial Officer during the same time he served as the Company’s Chief Financial Officer. Accordingly, transactions with NGI are considered related party transactions.

Bagger Dave’s Burger Tavern, Inc.:

On June 2, 2022, the Company purchased 11,095,085 shares of common stock of Bagger Dave’s Burger Tavern, Inc. (“Bagger Dave’s” or “BDVB”), representing approximately a 40.7% ownership interest at the time of purchase, for an aggregate purchase price of $1,260,000. The Company accounts for its investment in BDVB under the equity method of accounting, as it has the ability to exercise significant influence over BDVB’s operating and financial policies but does not control the entity.

Bagger Dave’s operates five casual dining restaurant and bar locations in Michigan, Indiana, and Ohio. BDVB’s common stock is quoted on the OTC Pink market, and BDVB reports financial information under the Alternative Reporting Standard of OTC Markets Group, Inc. Such financial information is not required to be audited.

As of December 28, 2025, the carrying value of the Company’s investment in BDVB was $0. During fiscal 2025, the Company’s cumulative share of BDVB’s net losses exceeded the carrying value of its investment. Accordingly, the Company reduced the investment balance to zero and discontinued recognizing additional equity method losses, as the Company has not guaranteed any obligations of BDVB and had not previously committed to provide further financial support.

The Company advanced a total of approximately $88,000 and $227,000, respectively, to BDVB during the 13-week and 26-week periods in 2026 pursuant to authorization from the Company’s Board of Directors to provide up to $297,000 pursuant to a financing facility bearing interest at 12%, accrued monthly, and callable upon demand. These advances represent additional financial support. As a result, the Company resumed recognition of its share of BDVB’s losses to the extent of the additional investment. As a result of net income generated in the first two quarters of 2026 being less than the cumulative advances to BDVB through June 28, 2026, the Company reduced its note receivable from BDVB by approximately $25,000 during the 13-week period ended June 28, 2026. Additionally, given the operating losses generated in the 2026 periods as shown below, the Company recorded an allowance of $50,000 against the note receivable from BDVB on the consolidated balance sheets as of June 28, 2026.

The Company will continue to recognize its share of BDVB’s earnings or losses only to the extent of its net investment balance, including any additional financial support provided. Any share of losses in excess of the Company’s investment balance will not be recognized unless the Company commits to further financial support or guarantees obligations of BDVB.

During the first quarter of fiscal 2026, BDVB sold its closed leasehold interest in Chesterfield, Michigan, for approximately $400,000, consisting of cash and notes receivable. BDVB recognized a gain of approximately $350,000 related to this transaction.

The following tables present unaudited summary financial information of BDVB as of and for the periods indicated, as reported by BDVB:

Gary Copperud, the Chief Executive Officer and a director of the Company also serves as the president and a director of Bagger Dave’s Burger Tavern, Inc. BT Brands owns approximately 40.7% of the outstanding shares of Bagger Dave’s. The investment is accounted for on the equity method. In 2025 through the second quarter of 2026, officers of BT Brands received no compensation from Bagger Dave’s and there were no additional related party transactions.