BTBD · BT Brands, Inc.

BT Brands, Inc. entered the Merger Agreement on September 2, 2025, outlining a merger where its wholly owned subsidiary, Aero Merger Sub Inc., would merge with Aero Velocity Inc., with Aero surviving as a subsidiary and its shares converting to BT Brands' Series A Preferred Stock. The deal failed to close by the initial February 28, 2026 deadline, automatically extended to April 30, 2026, due to the SEC not declaring the Registration Statement effective. On May 1, 2026, BT Brands exercised its termination right under Section 7.1(b), which allows termination if Closing does not occur by the deadline, provided the terminating party is not primarily at fault. The Company stated this was due to the ineffective Registration Statement, rendering termination effective immediately upon notice. Post-termination, per Section 7.2, the agreement has no further effect except customary surviving provisions, and no termination fee or penalty applies, with expenses borne individually under Section 5.8. Aero's counsel contested the termination's validity on May 4, 2026, claiming BT Brands lacked rights under Section 7.1(b), but the Company disputes this. The press release emphasizes the Board's view that termination serves shareholder interests, shifting focus to core operations like restaurant profitability, cash flow improvement, and balance sheet strength while evaluating other value-enhancing opportunities. This avoids a potentially dilutive transaction amid regulatory delays, preserving flexibility but introducing dispute risk.