NROM 10-K & 10-Q changes, risk factors and insider trading
Noble Romans Inc. · OTC · Retail-Eating Places · CIK 709005 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“Upon review, the Company determined that BT Brands had not complied with the express requirements for a shareholder nomination and had misrepresented its record ownership of the Company’s shares in their submission to the Company for the nomination required under the Company’s By-laws. Accordingly, Copperud was disqualified as a nominee. The Company’s Board determined that Mr. Copperud was not a suitable Board candidate given his background of unsuccessful business ventures and misconduct in pursuing the election contest. BT Brands and Mr. …”see in full comparison
Dependence on frequent deliveries of product from unrelated third-party manufacturers through unrelated third-party distributors also subjects the Company to the risk that shortages or interruptions in supply caused by contractual interruptions, market conditions, inclement weather or other conditions could adversely affect the availability, quality and cost of ingredients.see in full comparisonThe COVID-19 pandemic created supply chain shortages that adversely impacted the Company’s operations. In addition, factorsFactors such as inflation, which has intensified significantly since the beginning of 2021, market conditions for cheese, wheat, meats, paper, labor and other items may also adversely affect the franchisees and, as a result, can adversely affect the Company’s ability to add new franchised locations.
“In conjunction with the Fourth Amendment to the Senior Note the Company issued to the Purchaser an additional Warrant to purchase up to 750,000 shares of the Company’s Common Stock at an exercise price of $.10 per share with a maturity date of five years from date of issuance. Since the Company did not redeem Corbel’s Senior Note by August 14, 2025, the Company issued an additional warrant to purchase up to 500,000 shares of Common Stock at an exercise price of $0.10 per share. …”see in full comparison
“BT Brands, (NASDAQ; BTBD), purports to operate 18 restaurants of various formats. For the fiscal year ended December 29, 2024, BT Brands reported a net loss of $2.3 million (or $.37 per share) on sales of $14.8 million following a year-ended December 31, 2023 net loss of $900,000 after tax benefit of $145,000. BTBD stock price has declined by over 52% over the past 52 weeks and its market capitalization currently is approximately $6.7 million.”see in full comparison
“In conjunction with the Fourth Amendment to the Senior Note the Company issued to the Purchaser an additional Warrant to purchase up to 750,000 shares of the Company’s Common Stock at an exercise price of $.10 per share with a maturity date of five years from date of issuance.”see in full comparison
“The Company is actively pursuing refinancing of the Senior Note and has received indications of interest from various lenders. Nonetheless, there is no assurance that the Company will be able to complete the financing on favorable terms or at all.”see in full comparison
Full comparison: every changed paragraph (17)
The Company’s growth strategy includes continuingfocusing toon sellsales of new non-traditional franchises and continuing to open the backlog of sold but unopened non-traditional locations. The opening and success of new locations will depend upon various factors, which include: (1) the traffic generated by and viability of the underlying activity or business in non-traditional locations; (2) the continued viability of the Craft Pizza & Pub locations; (3) the ability of the franchisees of either venue to operate their locations effectively; (4) the franchisee'sfranchisees’ ability to comply with applicable regulatory requirements; and (5) the effect of competition and general economic and business conditions including food and labor costs. Many of the foregoing factors are not within the Company’s control. There can be no assurance that the Company will be able to achieve its plans with respect to the opening and/or operation of new franchises of non-traditional locations and/or Craft Pizza & Pub locations.
Ability to service and refinance outstanding indebtedness and the dilutive effect of the Company’s outstanding warrants.
As of May 30,1, 2025,2026, the Company had approximately $7.1$6.1 million in principal amount debt obligations. Of that debt, $6.5$5.5 million is in the form of a senior secured promissory note (as amended, the “Senior Note”) and $575,000 is in the form of convertible, subordinated, unsecuredsubordinated promissory notesnotes, which are unsecured (the “Notes”), each as described below.
The Senior Note, as amended, bears cash interest of SOFR, as defined in the Agreement, plus 9.0% with no PIK interest.interest and a floor of 4.25% on SOFR. Interest is payable in arrears on the last calendar day of each month. The Senior Note, as amended, matures on June 30, 2026. Beginning February 28, 2023, the Senior Note required fixed principal payments in the amount of $33,333 per month during February 2023 and $83,333 per month thereafter until maturitymaturity, but was amended to $91,667 per month effective May 31, 2025.
In conjunction with the Fourth Amendment to the Senior Note the Company issued to the Purchaser an additional Warrant to purchase up to 750,000 shares of the Company’s Common Stock at an exercise price of $.10 per share with a maturity date of five years from date of issuance. Since the Company did not redeem Corbel’s Senior Note by August 14, 2025, the Company issued an additional warrant to purchase up to 500,000 shares of Common Stock at an exercise price of $0.10 per share. For any month the Senior Note remains outstanding after August 14, 2025, the Company has agreed to issue additional warrants to purchase up to 250,000 shares of Common Stock each month starting with September 7, 2025 as long as the Senior Note is outstanding at an exercise price of $0.10 per share. The amendment required the Company to reimburse certain of Corbel’s expenses incurred in connection with the amendment. However, the Company has an agreement with Corbel that the Company can buy back all warrants outstanding to Corbel for $500,000 if the Senior Note is paid in full by June 10, 2026.
In conjunction with the Fourth Amendment to the Senior Note the Company issued to the Purchaser an additional Warrant to purchase up to 750,000 shares of the Company’s Common Stock at an exercise price of $.10 per share with a maturity date of five years from date of issuance.
Additionally, the Company previously issued certain units (the “Units”) consisting of a Note in an aggregate principal amount of $50,000 and warrants (the “Warrants”) to purchase up to 50,000 shares of the Company’s Common Stock at a price of $1.00 per share. Following the refinancing described above, $575,000 in principal amount of Notes and the associated Warrants remain outstanding, however, per the terms of the agreement, the Warrants arewere re-priced to $0.10 per share. Notes with an outstanding principal balance of $200,000 matured and accompanying Warrants expired January 31, 2023, however a $50,000 of those matured noteNotes was repaid to Margaretthe Huffmanapplicable Note holder with the approval of CorbelCorbel. andThe theremaining principal amount of $150,000 cannot be repaid until Corbel’s loan is paid because the Notes are subordinate to such loan. The maturity of the Notes with an outstanding principal balance of $425,000, and accompanying Warrants, have beenwas extended to May 31, 2025 or the repayment of the Senior Secured Loan, whichever comesis first.later.
The Company is actively pursuing refinancing of the Senior Note and has received indications of interest from various lenders. Nonetheless, there is no assurance that the Company will be able to complete the financing on favorable terms or at all.
While a portion of its revenues are being generated by Company-owned operations, a growing portion of the Company’s revenues comes from royalties and other fees generated by its franchisees which are independent operators. Their employees are not the Company’s employees. The Company is dependent on the franchisees to accurately report their weekly sales and, consequently, the calculation of royalties. The Company provides training and support to franchisees but the quality of the store operations and collectability of the receivables may be diminished by a number of factors beyond the Company’s control. For example, franchisees may not operate locations in a manner consistent with the Company’s standards and requirements,requirements or may not hire and train qualified managers and other store personnel. If they do not, the Company’s image and reputation may suffer and its revenues could decline. While the Company attempts to ensure that its franchisees maintain the quality of its brand and branded products, franchisees and licensees may take actions that adversely affect the value of the Company’s intellectual property or reputation. Overall inflation, general economic conditions, initiatives to increase the Federal minimum wage and a shortage of available labor could have an adverse financial effect on the franchisees or the Company by increasing labor and other costs.
The success of the Company’s license and franchise offerings depends upon the Company’s ability to engage and retain unrelated, third-party distributors. The Company’s distributors collect and remit certain of the Company’s royalties and must reliably stock and deliver products to the Company’s franchisees as well as the Company-owned operations. The Company’s inability to engage and retain quality distributors, or a failure by distributors to perform in accordance with the Company’s standards, could have a material adverse effect on the Company. The COVID-19 pandemic had a materially adverse impact on many of the Company’s then current distributors as well as other potential distributors, especially those located in or servicing states that had or have significant and/or prolonged restrictions. Potential disruptions in distribution could result in distribution service being provided under less favorable terms to the Company and its franchisees. This risk is largely mitigated by the number of distributors in the market from which to choose.
The restaurant industry and the retail food industry are often affected by changes in consumer tastes, national, regional and local economic conditions, demographic trends, traffic patterns and the type, number and location of competing restaurants. The Company could be substantially adversely affected by publicity resulting from food quality, illness, an infection pandemic, injury, other health concerns or operating issues stemming from one restaurant or retail outlet or a limited number of restaurants and retail outlets. The growing availability and access to new weight-loss and diet suppression drugs, such as GLP-1 medications, may have an impact on retail food industry consumption trends in general.
Dependence on frequent deliveries of product from unrelated third-party manufacturers through unrelated third-party distributors also subjects the Company to the risk that shortages or interruptions in supply caused by contractual interruptions, market conditions, inclement weather or other conditions could adversely affect the availability, quality and cost of ingredients. The COVID-19 pandemic created supply chain shortages that adversely impacted the Company’s operations. In addition, factorsFactors such as inflation, which has intensified significantly since the beginning of 2021, market conditions for cheese, wheat, meats, paper, labor and other items may also adversely affect the franchisees and, as a result, can adversely affect the Company’s ability to add new franchised locations.
Each franchise and Company-owned location is subject to licensing and regulation by a number of governmental authorities, which include health, safety, sanitation, building, alcohol, employment and other agencies and ordinances in the state or municipality in which the facility is located. The process of obtaining and maintaining required licenses or approvals can delay or prevent the opening of a franchise location. Vendors, such as the Company’s third-party productionmanufacturers and distribution services,distributors, are also licensed and subject to regulation by state and local health and fire codes, and U. S. Department of Transportation regulations. The Company, its franchisees and its vendors are also subject to federal and state environmental regulations. Failure of the Company or its franchisees to comply with these laws and regulations could have an adverse impact on the Company, its operations, financial results or reputation. Additionally, expenses related to compliance with these laws and regulations could have an adverse impact on the Company’s financial results.
The Company’s stock is quoted on the OTCQB, a Nasdaq-sponsored and operated inter-dealer automated quotation system for equity securities not included on the Nasdaq Stock Market. The Company is not subject to the same corporate governance requirements that apply to exchange-listed companies. These requirements include: (1) a majority of independent directors, although the company does have a majority of independent directors; (2) an audit committee of independent directors, instead the Board as a whole acts as the audit committee; and (3) shareholder approval of certain equity compensation plans or equity issuances. As a result, stockholders do not have the same governance protection as they would for a stock traded on a national exchange.
In 2023, BTB Brands, Inc. (“BT Brands”) and its CEO and principal shareholder, Gary Copperud (“Copperud”), launched aan unsuccessful proxy contest to elect Copperud to the Company’s board of directors at its annual meeting that year. BT Brands, Copperud and Kenneth Brimmer, BT Brands CFO, last reported beneficial ownership as a group of 2.01.8 million Company shares. If BT Brands were again to pursue a proxy context, the Company could incur significant expenses.
BT Brands, (NASDAQ; BTBD), purports to operate 18 restaurants of various formats. For the fiscal year ended December 29, 2024, BT Brands reported a net loss of $2.3 million (or $.37 per share) on sales of $14.8 million following a year-ended December 31, 2023 net loss of $900,000 after tax benefit of $145,000. BTBD stock price has declined by over 52% over the past 52 weeks and its market capitalization currently is approximately $6.7 million.
Upon review, the Company determined that BT Brands had not complied with the express requirements for a shareholder nomination and had misrepresented its record ownership of the Company’s shares in their submission to the Company for the nomination required under the Company’s By-laws. Accordingly, Copperud was disqualified as a nominee. The Company’s Board determined that Mr. Copperud was not a suitable Board candidate given his background of unsuccessful business ventures and misconduct in pursuing the election contest. BT Brands and Mr. Copperud filed a lawsuit in Federal court and also filed for a temporary restraining order and preliminary injunction seeking to require the Company to permit Copperud to stand for election despite admitting that he had not met the requirements to do so. The court denied their request for a temporary restraining order and preliminary injunction in part because the court determined they did not have a meaningful likelihood of success on the merits of their underlying claims. The Company has to date incurred more than $200,000 of direct expenses in successfully defending against BT Brands and Copperud. The Company may incur additional expenses if BT Brands or Copperud again takes action the Board determines is not in the best interest of all shareholders.
Management's Discussion & Analysis (MD&A)
Largest changes
“Gross margin contribution decreased from 10.6% in 2023 to 9.1% in 2024. The decrease in margin largely occurred in the first quarter. Economic pressures on consumer spending, particularly high gas prices, general inflation, and high credit card balances, at that time negatively impacted customer counts, which was partially offset by the slight increase in operating efficiency and labor cost.”see in full comparison
“Margin contribution increased from 9.2% in 2024 to 10.1% in 2025. The increase in margin was largely the result of same store sales increases but also from tighter controls on food and labor costs. Same store sales increases and tighter controls offset the inflationary pressure on food products, labor costs and nearly all other operating costs.”see in full comparison
“Direct expenses to defend against an activist shareholder were $35,000 in 2024 compared to $168,000 in 2023. Shortly before the 2023 annual meeting, BT Brands filed a lawsuit against the Company and its Directors. Additionally, BT Brands filed motions for a temporary restraining and for a preliminary injunction. The court denied both of BT Brands’ motions, in part because the Judge believed the Plaintiff’s claims in the underlying lawsuit likely not be successful on the merits. As a result, BT Brands voluntarily dismissed their lawsuit in September 2023.”see in full comparison
In view of the extension of the Seniorsee in full comparisonNoteNote, as well as the Company’s cash flow projections, the Company believes it will have sufficient cash flow to meet its obligations and to carry out its current business plan for the foreseeablefuture.future, however, the failure to timely complete the refinancing the Company is pursuing could adversely affect the Company’s liquidity and capital resources. The Company’s cash flow projections for the next two years are primarily based on the Company’s strategy of growing the non-traditional franchisingvenue,venue and operating its existing Craft Pizza & Publocations and pursuing a franchising program for Craft Pizza & Pub restaurants as market conditions allow.locations.
“The cost of sales as a percentage of revenue increased from 20.5% in 2023 to 21.2% in 2024. The increase was the result of more aggressive promotional efforts to offset the economic environment, and because of inflationary pressures on many ingredients (especially higher than normal cheese prices, the main ingredient cost in a pizza) partially offset by stricter controls and efficiency built into the production areas.”see in full comparison
“The cost of sales as a percentage of revenue decreased from 21.2% in 2024 to 20.7% in 2025. The decrease was the result of promoting premium products and add-ons at point-of-purchase while simultaneously promoting value-oriented products externally. This reduction occurred despite inflationary pressures on many ingredients.”see in full comparison
Full comparison: every changed paragraph (29)
The Company currently owns and operates nine Craft Pizza & Pub locations and one non-traditional location in a hospital. Craft Pizza & Pub is designed to have a fun, pleasant atmosphere serving pizza and other related menu items, all made fresh using fresh ingredients in the view of the customers for inside dining and offers Pizza Valet service for a quick, easy and fun way to provide carry-out for those customers who want to dine elsewhere. These units operate under the trade name “Noble Roman’s Craft Pizza & PubPub.”.
The Company also sells and services franchisesfoodservice andprograms licensesto convenience stores where the owner of the convenience store becomes the franchisee for non-traditionalthe foodservice operationsoperation under the trade names “Noble Roman’s Pizza” and “Noble Roman’s Take-N-Bake.” The non-traditional concepts’ hallmarks include high quality pizza along with other related menu items, simple operating systems, fast service times, labor-minimizing operations, attractive food costs and overall affordability.
During the 12-month period ended December 31, 20242025 there were no company-operated or franchised Craft Pizza & Pub restaurants opened or closed. During the same 12-month period there were 68approximately 60 new non-traditional outlets opened and 10six non-traditional outlets closed.
The Company, at December 31, 20232024 and December 31, 2024,2025, reported deferred tax assets on its balance sheet totaling $3.5 million.million and $3.1 million, respectively. Based on the Company’s review of its available tax credits the Company believes it is more likely than not that the deferred tax assets will be utilized prior to their expiration.utilized.
(1) All other expenses in franchising for 2023 are shown as a large negative resulting from the ERC refund for various expenses were not separated between other categories except some of the refund were allocated to general and administrative expenses.
The revenue from this venue increased from $8.6 million in 2024 to $8.8 million in 2025. The primary reason for the increase was same store sales increases. Same store sales for the Craft Pizza & Pub restaurants were up 2.3% for 2025 versus 2024 with no menu price increase during that time. This was achieved despite a significantly weakened consumer environment through the Company’s considerable operational focus on obtaining and maintaining high customer satisfactions scores, and through the careful implementation and rotation of numerous product promotions designed for cost-conscious consumers.
The cost of sales as a percentage of revenue decreased from 21.2% in 2024 to 20.7% in 2025. The decrease was the result of promoting premium products and add-ons at point-of-purchase while simultaneously promoting value-oriented products externally. This reduction occurred despite inflationary pressures on many ingredients.
The revenue from this venue decreased from $8.7 million in 2023 to $8.6 million in 2024. The primary reason for the decrease was same store sales reduction as a result of the general economy, high gas prices, high consumer credit card balances and a decrease in disposable income on the part of local consumers. This decrease was primarily during the first half of the year.
The cost of sales as a percentage of revenue increased from 20.5% in 2023 to 21.2% in 2024. The increase was the result of more aggressive promotional efforts to offset the economic environment, and because of inflationary pressures on many ingredients (especially higher than normal cheese prices, the main ingredient cost in a pizza) partially offset by stricter controls and efficiency built into the production areas.
Salaries and wages as a percentage of revenue decreased from 29.1% in 2023 to 28.9% in 2024.2024 to 28.2% in 2025. The decrease was the result of schedulingshifting efficienciessome duties from higher-wage employees to lower-wage employees, and relatively stable restaurant management, despite the significantcontinuing increase over time in local wage and salary rates.
Facility costs, including rent, common area maintenance and utilities, as a percentage of revenue increased from 18.1%18.6% to 18.6%18.8% of revenue in 20232024 compared to 2024.2025. The primary reasonsreason for the increase was athe slight declineincrease in sales volumes and increases in other operating rent costs as well as utility costs due to energy price increases.
All other operating costsexpenses, including packagingpackaging, increased as a percentage of revenue from 21.6% in 2023 to 22.1% in 2024.2024 to 22.2% in 2025. The increase was the result of general inflationary pressure on substantially all costs of operations.operations partially offset by the increase in same store sales.
Margin contribution increased from 9.2% in 2024 to 10.1% in 2025. The increase in margin was largely the result of same store sales increases but also from tighter controls on food and labor costs. Same store sales increases and tighter controls offset the inflationary pressure on food products, labor costs and nearly all other operating costs.
Gross margin contribution decreased from 10.6% in 2023 to 9.1% in 2024. The decrease in margin largely occurred in the first quarter. Economic pressures on consumer spending, particularly high gas prices, general inflation, and high credit card balances, at that time negatively impacted customer counts, which was partially offset by the slight increase in operating efficiency and labor cost.
Same store sales for the Company-owned Craft Pizza & Pub restaurants were up 2.9% in the 4th quarter of 2024 versus the 4th quarter of 2023.
Franchise revenue consists of initial franchise fee, royalties generated by the 7% of sales by franchisees, which are mostly collected by ACH on the franchisee’s accounts on a weekly basis from sales reports received from the franchisees, commissions on equipment sales, where the companyCompany assists the franchisees in arranging the purchase of equipment, and manufacturing allowances based on the volume of product used. Total revenue from this venue increased from $4.7$5.5 million in 20232024 to $5.6$6.2 million in 2024.2025. The increase in revenue from this venue resulted from the opening of approximately 6860 more non-traditional locations in 2025, or an average of 62 new units per year during 2023, 2024 and 2025, as a result of changingimproved market conditions and managementowners of convenience stores and travel plazas having the confidence to invest in order to increase their margins and profitability. In late 20232023, the Company also entered into a 100-unit development agreement, to be developed over the nextsucceeding threethree-year years,period. withThe franchisee operates an existing chain with a significant presence in the southern third of the United States. In addition, the Company is attracting franchise locations with other mid-size chains of convenience stores and travel plazas. At the present time the Company has approximately 75 units sold but not yet opened.
As a percentage of revenues: salaries and wages in this venue decreased from 16.6% in 2024 to 12.9% in 2025; franchise promotion expense decreased from 3.4% in 2024 to 2.8% in 2025; and all other expenses increased from 10.7% in 2024 to 11.8% in 2025. The structural overhead for this venue is now in place for continued expansion, so a substantial portion of revenue from the additional locations increases the contribution margin from this venue.
It is difficult to compare the results of operations of this venue between 2023 and 2024 because in 2023 the Company recorded a net adjustment from the ERC refund by reducing various operating expenses of this venue by $1,460,444 as well as reducing general and administrative expenses by $205,156. Even though it is not comparable to 2023, as stated above, the Company increased revenue from $4.7 million to $5.6 million and maintained expenses of this venue to 30.6% of revenue generated for a margin of 69.4% of revenue. The infrastructure and overhead required to accommodate new growth in this venue should be minimal in relation to the revenue generated from such growth, so the margin is expected to increase.
Gross revenue from this venue increased from $935,000 in 2023 to $954,000 in 2024.2024 to $1.2 million in 2025. This venue consists of one location in a hospital. The operation was removed from its normal location to a temporary location with very limited menu and limited hours during the remodel phase of that section of the hospital for a lengthyportion of 2024 and a longer time during 2024.2025. At the same time the remodel was going on, the hospital was adding a new wing which expandsexpanded its occupancy capabilities significantly. After that work was completed and the location was moved back to its previous location and the new wing of the hospital was opened, the run rate of sales has increased by approximately 33%.location. The Company does not intend to operate any more Company-owned non-traditional locations in addition to the one location that is currently being operated.
Depreciation and amortization was approximately $380,000$499,648 in 20232024, and $499,648$392,948 in 2025. Additional depreciation on equipment transferred to Company-owned Craft Pizza & Pub restaurants was recorded in 2024. The Company has not opened any new Craft Pizza & Pub locations since 2021, therefore the Company expects future depreciation haswill remainedremain generally consistent year over year from currentyear-to-year operations, however it was detected that $113,365 of equipment was transferred to various company-owned CPP locations which did not get appropriately transferred and therefore did not get depreciated but the depreciation is now recorded in 2024.hereafter.
General and administrative expenses increaseddecreased from $1.5 million in 2023 to $2.6 million in 2024.2024 Asto explained$2.3 abovemillion in the2025. discussionThe ofdecrease franchise revenue and expense, these amounts are not comparable because a substantial portion of thein general and administrative expenses werewas reduced by recordinglargely the ERCresult refundof reductions in 2023.staffing and maintaining a strict focus on controlling corporate overhead generally.
Interest expense decreased in 20232025 compared to 2024 from $1.7$1.6 million to $1.6$1.3 million. The Company reduced principal on the Senior Note by $83,333 per month,month howeveruntil April 2025 and then increased principal payments to $91,667 per month. In conjunction with the amendment in April 2025, the 3% PIK interest which had been accruing on the Senior Note requiredwas 3% PIK interest on the loan balance outstanding each month which adds to the principal balance of the Senior -Note.eliminated. As a result of a recentthat amendment to the Senior Note, cash interest will now beis SOFR plus 9.0%9.0%, andplus thereother willfees bewith noa PIKfloor interestof addingSOFR toof the loan balance outstanding.4.25%.
Direct expenses to defend against an activist shareholder were $35,000 in 2024 compared to $168,000 in 2023. Shortly before the 2023 annual meeting, BT Brands filed a lawsuit against the Company and its Directors. Additionally, BT Brands filed motions for a temporary restraining and for a preliminary injunction. The court denied both of BT Brands’ motions, in part because the Judge believed the Plaintiff’s claims in the underlying lawsuit likely not be successful on the merits. As a result, BT Brands voluntarily dismissed their lawsuit in September 2023.
The Company’s current ratio was .40-to-l as of December 31, 2025 compared to .91-to-1 as of December 31, 20242024. compared to 1.1-to-1 as of December 31, 2023. As a result of the amendment, including the extension ofGiven the maturity of the Senior Note toat June 30, 2026, both the Senior Note and the subordinated convertible notesNotes wereare carried as long-termshort-term liabilities as of December 31, 2024, except for the required principal payments due in the next 12 months.2025.
In January 2017, the Company completed the offering of $2.4 million principal amount of convertible common stock at $0.50 per share and warrants to purchase up to 2.4 million shares of the Company’s Common Stock at an exercise price of $1.00 per share, subject to adjustment which brings the exercise price to $.10 per share as a result of the Senior Note extension. In 2018, $400,000 principal amount of Notes was converted into 800,000 shares of the Company’s Common Stock, in January 2019 another Note in the principal amount of $50,000 was converted into 100,000 shares of the Company’s Common Stock, and in August 2019 another Note in the principal amount of $50,000 was converted into 100,000 shares of the Company’s Common Stock, leaving principal amounts of Notes of $1.9 million outstanding as of December 31, 2019. Holders of Notes in the principal amount of $775,000 extended their maturity date to January 31, 2023. In February 2020, $1,275,000 principal amount of the Notes were repaid in conjunction with a new financing leaving a principal balance of $625,000 of subordinated convertible notes outstanding due January 31, 2023.outstanding. In April 2023, the holder of $50,000 principal amount of the subordinated convertible notes were repaid by the Company leaving $575,000 outstanding. These Notes bear interest at 10% per annum, including the Notes which have not been extended, paid quarterly and are convertible to Common Stock any time prior to maturity at the option of the holder at the current exercise price of $0.50 per share.
The Senior Note, as amended, bears cash interest of SOFR, as defined in the Agreement, plus 9.0% with no PIK interest, which was previously addedapplied to the principal amount of the Senior Note. Interest is payable in arrears on the last calendar day of each month. The original maturity date of the Senior Note was February 7, 2025, however the maturity has now been extended by mutual agreement to June 30, 2026. The Senior Note requires principal payments of $91,667 per month starting in May 2025. The Company is now in discussions with several potential lenders for new financing which, if successful, will pay the balance of the Senior Note, pay the subordinated Notes payable, provide funds to repurchase all warrants issued to Corbel in connection with their financing and retire them, and to pay related costs of financing.
See Note 1 to the Company’s consolidated financial statements for discussion of funds received from the ERC.
In view of the extension of the Senior NoteNote, as well as the Company’s cash flow projections, the Company believes it will have sufficient cash flow to meet its obligations and to carry out its current business plan for the foreseeable future.future, however, the failure to timely complete the refinancing the Company is pursuing could adversely affect the Company’s liquidity and capital resources. The Company’s cash flow projections for the next two years are primarily based on the Company’s strategy of growing the non-traditional franchising venue,venue and operating its existing Craft Pizza & Pub locations and pursuing a franchising program for Craft Pizza & Pub restaurants as market conditions allow.locations.
The statements contained above in Management’s Discussion and Analysis and elsewhere in this report concerning the Company’s future revenues, profitability, financial resources, financing efforts, market demand and product development are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to the Company that are based on the beliefs of the management of the Company, as well as assumptions and estimates made by and information currently available to the Company’s management. The Company’s actual results in the future may differ materially from those indicated by the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment, including, but not limited to competitive factors and pricing and cost pressures, the Company’s ability to service its loan and refinance the Senior Note before its maturity in June 2026, the emergence or spread of human or animal pandemics (such as COVID-19 or the Avian Bird Flu), non-renewal of franchise agreements or the openings contemplated by the Development Agreement not occurring, shifts in market demand, the success of franchise programs, general economic conditions, changes in demand for the Company’s products or franchises, the impact of franchise regulation, the success or failure of individual franchisees andfranchisees, inflation, other changes in prices or supplies of food ingredients and labor and as well as the factors discussed under “Risk Factors” contained in this Annual Report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. If activist stockholder activities ensue, or if certain parties (acting individually or as a group) seek to continue or initiate interference in the Company’s business relationships, the CompanyCompany’s business could be adversely impacted.
What changed in the latest 10-Q
Risk Factors
We could not find a separate Risk Factors item in the latest 10-Q. Some companies leave it out of quarterly reports; see the annual 10-K risk factors and the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “(1) With the sale of multiple traditional stand-alone franchises to a single franchisee, the franchise fee for the first unit is $30,000, the franchise fee for the second unit is $25,000 and the franchise fee for the third unit and any additional unit is $20,000 each.”
Largest changes
“The new Bank senior loan in the principal amount of $6,900,427 is secured by all tangible and intangible assets of the Company and is scheduled to be repaid monthly over a period of five years with an interest rate of SOFR, as defined in the agreement, plus 4% per annum payable in arrears on the declining loan balance. The new Bank loan and the disbursement of its proceeds occurred on June 10, 2026 and for the first 30 days, or until July 10, 2026, was interest only and was paid in arrears. The Bank loan contains certain financial and other covenants. …”see in full comparison
“(1) With the sale of multiple traditional stand-alone franchises to a single franchisee, the franchise fee for the first unit is $30,000, the franchise fee for the second unit is $25,000 and the franchise fee for the third unit and any additional unit is $20,000 each.”see in full comparison
“The Senior Note, as amended, bears cash interest of SOFR, as defined in the Agreement, plus 9.0% with no PIK interest, which was previously added to the principal amount of the Senior Note. Interest is payable in arrears on the last calendar day of each month. The original maturity date of the Senior Note was February 7, 2025, however the maturity has now been extended by mutual agreement to June 30, 2026. The Senior Note requires principal payments of $91,667 per month starting in May 2025.”see in full comparison
“Total revenue was $1.6 million and $3.1 million for the three-month and six-month periods ended June 30, 2026 compared to $1.5 million and $2.9 million for the corresponding periods in 2025, respectively. This was primarily the result of the Company determining to redirect additional staff efforts to the sale of non-traditional franchises while still carefully managing corporate-level overhead expenses. …”see in full comparison
“Salaries and wages as a percentage of revenue increased to 27.4% from 26.9% for the three-month period ended June 30, 2026, compared to the comparable period in 2025, and decreased to 27.6% from 28.2% for the six-month period ended June 30, 2026, compared to the comparable period in 2025. The cost of management salaries has continued to increase due to the shortage of qualified candidates and general competition for those employees. …”see in full comparison
“The revenue from this venue decreased from $2.32 million to $2.21 million, or 4.8%, and from $4.34 million to $4.31million, or .8%, for the respective three-month and six-month periods ended June 30, 2026, compared to the corresponding periods in 2025. …”see in full comparison
Full comparison: every changed paragraph (38)
Noble Roman’s, Inc., an Indiana corporation incorporated in 1972, sells and services franchises, operates Company-owned stand-alone restaurants and non-traditional foodservice operations under the trade names “Noble Roman’s Craft Pizza & Pub,” “Noble Roman’s Pizza,” “Noble Roman’s Take-N-Bake,” and “Tuscano’s Italian Style Subs.” References in this report to the “Company” are to Noble Roman’s, Inc. and its wholly-owned subsidiaries, unless the context requires otherwise. The Company’s only operating subsidiary is RH Roanoke, Inc., which operates a Company-owned non-traditional location.
The Company has been operating and franchising Noble Roman’s Pizza operations in a variety of stand-alone and non-traditional locations across the country since 1972. Its first Craft Pizza & Pub location opened in January 2017 as a Company-operated restaurant in a northern suburb of Indianapolis, Indiana. SinceBetween then,then and 2021 the Company opened a total of eight more Company-operated Craft Pizza & Pub locations in 2017, 2018, 2020 and 2021.locations. The Company-operated locations serve as the base for what it sees as a significant potential future growth driver,opportunity, includingi.e., opening additional Company operated locations and franchising its full-service restaurant format to experienced, multi-unit restaurant operators with a track record of success. In addition to the nine Company-operated Craft Pizza & Pub locations, during 2019 andto 2020 the Companyfranchisees opened three franchised locations. Today, in total, there are 12 Craft Pizza & Pub locations in operation.operation, however an additional franchise location is under construction in Evansville, Indiana.
The Company refocused its development plans toward selling more non-traditional franchises as a result of the pandemic coming to an end and the owners of non-traditional locations becoming more willing to look at expansion options and to invest in their growth. The focus on selling more non-traditional franchise locations, including several locations with higher-than-average potential volumes, is proceeding.ongoing. The Company has sold many units yet to be opened and still has a significant pipeline of prospects to expand the number of non-traditional franchise locations in operation. In October 2023, the Company entered into a Development Agreement with Majors Management, LLC (“Majors”) for 100 franchise locations to be developed over the succeeding three years.
The Company designed the system to enable fast cook times, with oven speeds running approximately three minutes for traditional pizzas and 5.75 minutes for Sicilian pizzas. Popular pizza favorites such as pepperoni are options on the menu but also offered is a selection of Craft Pizza & Pub original pizza creations. The menu also features a selection of contemporary and fresh, made-to-order salads and fresh-cooked pasta. The menu also incorporates baked sub sandwiches, hand-sauced boneless wings and a selection of desserts, as well as Noble Roman’s famous Breadsticks with Delicious Cheese Sauce, most of which have been offered in its locations since 1972. In 2022, new salad bars were rolled out over time across all Company-operated restaurants.
The Company is focused on revenue expansion while carefully managing corporate-level overhead expenses. The Company’s development plans stress selling more non-traditional franchises withspecifically focusing on growth within the pandemicconvenience coming to an endstore and thetravel ownersplaza of non-traditional host facilities looking to expand their options to invest in their growth.venue. The Company has a significant pipeline of leads and prospects for future non-traditional franchise sales as well as a significant number of franchised locations sold but not yet open.
(1) With the sale of multiple traditional stand-alone franchises to a single franchisee, the franchise fee for the first unit is $30,000, the franchise fee for the second unit is $25,000 and the franchise fee for the third unit and any additional unit is $20,000 each.
The franchise fees are paid upon signing the franchise agreement and recorded in deferred income which beginsis amortizingrecognized intoas revenue income over the life of the contract from the time the location opens for business and, when paid, are non-refundable in consideration of the administration and other expenses incurred by the Company in granting the franchises.
The following table sets forth the revenue, expense and margin contribution of the Company'sCompany’s franchising venueactivities and the percentage relationship to its revenue:
The revenue from this venue decreased from $2.32 million to $2.21 million, or 4.8%, and from $4.34 million to $4.31million, or .8%, for the respective three-month and six-month periods ended June 30, 2026, compared to the corresponding periods in 2025. Sales for both periods were negatively affected by general economic uncertainty and the resulting reduction in consumer discretionary spending in the Company’s operating market, including due to commencement of the Middle East war in late February, and the resulting ongoing significant fluctuation in gasoline, utility prices and consumer attitudes.
Cost of sales as a percentage of revenue from this venue remained constant for the three-month period ended June 30, 2026 and 2025, and for the six-month period ended June 30, 2026 decreased from 20.6% and 20.0% compared to the six-month period ended June 30, 2025. The Company has experienced some significant increases in product costs. However, the Company has been carefully modulating its promotional activity to help margins and has focused extensively on operational controls with relatively stable management staffing. Other than rebalancing beer and wine pricing, the Company did not implement a menu price increase in 2025 or 2026.
Salaries and wages as a percentage of revenue increased to 27.4% from 26.9% for the three-month period ended June 30, 2026, compared to the comparable period in 2025, and decreased to 27.6% from 28.2% for the six-month period ended June 30, 2026, compared to the comparable period in 2025. The cost of management salaries has continued to increase due to the shortage of qualified candidates and general competition for those employees. The Company was able to offset these increases during the six-month period with efficiencies gained and implemented in scheduling and supervision and with the allocation of some management tasks to lower priced hourly employees.
Margin contribution as a percentage of revenue for this venue decreased to 9.6% from 13.6% for the three-month period ended June 30, 2026 compared to the comparable period in 2025, and decreased to 8.5% from 10.2% for the six-month period ended June 30, 2026 compared to the comparable period in 2025. In addition to the small increase in labor cost, delivery fees and facility costs, including rent and utilities, along with a slightly lower revenue base resulted in the lower margin percentage.
The revenue from this venue was $2,094,417 for the three months ended March 31, 2026 compared to $2,019,418 for the corresponding period in 2025. The same stores sales increase of approximately 3.7% during this period is a very rewarding growth rate considering high gas prices, the uncertainty in the market and the general trend among restaurants and consumer spending in general. Additionally, the Company’s operating market experienced what has been reported as the 12th largest snowfall on record for the Indianapolis area over the course of two days in January and operations were limited or halted due to travel restrictions imposed by various municipal governments and due to road conditions in general.
Cost of sales decreased to 19.4% for the three months ended March 31, 2026 from 20.6% for the corresponding period last year. This decrease was because the Company maintained excellent controls over portioning and actively managed sales mix with dual promotions featuring both value and premium-priced offerings, partially offset by inflationary pressure on ingredient costs.
Salaries and wages decreased to 27.8% for the three months ended March 31, 2026 from 29.7% for the comparable period in 2025. This was the result of more efficient use of labor due to increased average tenure and experience of the Company’s workforce and the Company’s general focus on efficiency management.
Gross margin contribution as a result of what was discussed in the previous paragraphs, increased to 7.5% for the three months ended March 31, 2026 from 6.4% for the comparable period last year. This was accomplished despite the inflationary pressures on most all expenses as well as the Company’s value promotions in the face of weak consumer spending.
Total revenue was $1.6 million and $3.1 million for the three-month and six-month periods ended June 30, 2026 compared to $1.5 million and $2.9 million for the corresponding periods in 2025, respectively. This was primarily the result of the Company determining to redirect additional staff efforts to the sale of non-traditional franchises while still carefully managing corporate-level overhead expenses. The Company refocused its development plans toward selling more non-traditional franchises as a result of the pandemic and its after-effects coming to an end and the determination that owners of non-traditional locations would be more willing to consider expansion options and to invest in their growth. The Company has a significant pipeline of leads and prospects for future non-traditional franchise sales which is continuing to expand. The Company believes this growth provides an attractive opportunity for the coming months due to anticipated opening of new units already sold and the number of interested prospects the Company has identified. Because of the identified opportunity for expansion in this venue is tremendous and because the margin contribution from this venue was 73% during the most recent six-month period, the Company plans to add sales staff capacity.
Salaries, wages, and all other operating expenses of this venue were all kept in line with past results and the Company continues to maintain tight control over such expenses.
The margin contribution was 73.8% and 73.1% for the three-month and six-month periods ended June 30, 2026, compared to 72.5% and 67.5% for the comparable periods in 2025, respectively.
The revenue from this venue increased to $1,519,025 from $1,445,908 in the three months ended March 31, 2026 compared to the corresponding period in 2025. This significant increase of approximately 5.1% is a result of the continued expansion of the number of franchised units being opened. It is expected this trend will continue and the Company expects to open another 60 to 70 locations in year 2026.
Salaries and wages decreased to 13.2% from 14.6% as a percent of revenue for the comparable period in 2026 versus 2025. This decrease came primarily from the growing number of franchises open without the necessity of adding additional staff. The Company’s franchising business model allows it to substantially grow the number of open units without significant increases in overhead.
Gross revenue from this venue was $274,000 and $550,000 during the three-month and six-month periods ended June 30, 2026, compared to $295,000 and $590,000 for the comparable periods in 2025, respectively.
Total expenses were $276,000 and $545,000 for the three-month and six-month periods ended June 30, 2026, compared to $274,000 and $568,000 for the comparable periods in 2025, respectively. The Company is examining plans to discontinue this operation in the near future since it is under an expiring management contract. As a hospital operation, the Company had originally acquired the management agreement to operate the facility as a demonstration unit for the sale of other similar non-traditional franchises, but this location no longer serves that purpose since the Company is focused on the convenience store venue.
Gross revenue from this venue decreased slightly to $276,241 from $294,573 in the three-month period ended March 31, 2026 compared to the corresponding period in 2025. The slight reduction is primarily contributable to reduced beverage sales which was the result of the hospital installing several coolers displaying energy beverages in competition to normal fountain beverages.
Depreciation and amortization increasedexpense slightlywas torelatively $104,000 from $96,000unchanged for the three-month and six-month periods ended MarchJune 31,30, 20262026, andcompared to comparable periods in 2025. TheDepreciation primaryexpense reasonhas forremained thismostly consistencyconstant isas thea factresult thatof nonot additionalopening any new Company-ownedcorporate-owned locations havein openedeither since late 2021.year.
General and administrative expenses were $607,000 and $1.2 million for the three-month and six-month periods ended June 30, 2026, compared to $474,000 and $993,000 for the comparable periods in 2025, respectively. A significant portion of the increase was due to an increase in group insurance of approximately $14,000, increase in audit expense by approximately $55,000 and an increase in other professional services by approximately $46,000 in 2026 compared to 2025.
Interest expense was $497,000 and $853,000 for the three-month and six-month periods ended June 30, 2026, compared to $422,000 and $751,000 for the comparable periods in 2025, respectively. The increase in interest expenses during the three-month and six-month periods ended in 2026 was the result of expensing the unamortized portion of the loan charges and other expenses charged to interest from the payoff of the Corbel Loan. Following the refinancing in June 2026, interest expense for the three-month period ended September 30, 2026 is expected to be approximately $160,000.
General and administrative expenses increased to $622,517 from $424,405 for the three-month period ended March 31, 2026 compared to the corresponding period in 2025. The primary reason for the increase was the continued growth in the non-traditional venue and increase in our accounting structure to provide improved performance, improved internal controls and to create some redundancy capability. The Company does not anticipate further increases in general and administrative expenses over the current rate.
Interest expense decreased to $244,521 from $329,754 for the three-month period ended March 31, 2026 compared to the corresponding period in 2025. The primary reason for the decrease was the continued repayment of principal in the amount of $91,667 per month for all months since April 2025 and with Amendment #4 to the Senior Security Loan and Warrant Purchase Agreement with Corbel the PIK interest was eliminated and replaced with an increase in the base rate to SOFR plus 9%.
Net income for the three-month and six-month periods ended June 30, 2026 was $232,530$190,620 and $311,390, respectively, after an income tax accrualaccruals of $73,431,$24,903 whichand will$98,334, respectively. This compares to after-tax income for the comparable periods in 2025 of $285,436 and $329,248. The tax being accrued now and in the future is not expected to be paidpayable in cash because of athe deferred tax credit of approximately $3.0 million remaining which will offset any cash tax payments for a significant period of time. Net income before tax was $305,962$215,523 comparedand to $171,885$409,724 for the three-month periodand six-month periods ended MarchJune 31,30, 2026 compared to $404,973 and $490,037, respectively, for the samecomparable periodperiods in 2025. The most significant change was interest expense, as discussed above.
The Company’s current ratio was 1.3-to-1 as of June 30, 2026 compared to .40-to-1 as of December 31, 2025. This improvement was the result of the new financing from Lake Forest Bank & Trust Company, N.A (the “Bank”) the proceeds of which were used repay Corbel Capital Partners SBIC, L.P. (“Corbel”), and all outstanding subordinated debt, to the purchase from Corbel all of the outstanding warrants owned by Corbel, and to pay the related costs of the Bank loan.
The new Bank senior loan in the principal amount of $6,900,427 is secured by all tangible and intangible assets of the Company and is scheduled to be repaid monthly over a period of five years with an interest rate of SOFR, as defined in the agreement, plus 4% per annum payable in arrears on the declining loan balance. The new Bank loan and the disbursement of its proceeds occurred on June 10, 2026 and for the first 30 days, or until July 10, 2026, was interest only and was paid in arrears. The Bank loan contains certain financial and other covenants. The Company was in compliance with all covenants as of June 30, 2026.
The Company’s current ratio was .43-to-1 as of March 31, 2026 compared to .40-to-1 as of December 31, 2025. As a result of the amendment to the Senior Note, including the extension of the maturity of the Senior Note to June 30, 2026, both the Senior Note and the subordinated convertible notes are now carried as short-term liabilities at both December 31, 2025 and March 31, 2026. The Company has entered into an arrangement relating to the anticipated refinancing of its loan with Corbel Capital Partners SBIC, L.P. Separately, the Company negotiated to purchase all of Corbel’s outstanding warrants for $500,000. The company’s purchase of Corbel’s warrants, and their cancellation, will be effective upon satisfaction of the conditions specified in the agreement, including repayment of the remaining loan balance, accrued interest, and other associated fees and costs. If the conditions are not satisfied within the time period specified in the agreement, the payoff agreement may terminate, and the existing financing arrangements will remain outstanding in accordance with their terms. The company is actively pursuing the closing of a replacement financing package that will repay the remaining Corbel loan, repay the outstanding subordinated notes, and fund the purchase and cancellation of the Corbel warrants.
In February 2020, the Company entered into the Agreement with Corbel, pursuant to which the Company issued to Corbel the Senior Note in the initial principal amount of $8.0 million. The Company used the net proceeds of the Senior Note as follows: (i) $4.2 million to repay the Company’s then-existing bank debt which were in the original amount of $6.1 million; (ii) $1,275,000 to repay the portion of the Company’s existing subordinated convertible debt the maturity date of which most had not previously been extended; (iii) debt issuance costs; and (iv) for working capital and other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations.
The Senior Note, as amended, bears cash interest of SOFR, as defined in the Agreement, plus 9.0% with no PIK interest, which was previously added to the principal amount of the Senior Note. Interest is payable in arrears on the last calendar day of each month. The original maturity date of the Senior Note was February 7, 2025, however the maturity has now been extended by mutual agreement to June 30, 2026. The Senior Note requires principal payments of $91,667 per month starting in May 2025.
In view of the extensionfinancing, ofas thedescribed Senior Note,above, as well as the Company’s cash flow projections, the Company believes it will have sufficient cash flow to meet its obligations and to carry out its current business plan for the foreseeable future, however, the failure to timely complete the refinancing the Company is pursuing could adversely affect the Company’s liquidity and capital resources.future. The Company’s cash flow projections for the next two years are primarily based on the Company’s strategy of growing the non-traditional franchising venue and operating its existing Craft Pizza & Pub locations.
The Company does not anticipate that any of the recently issued pronouncements relating to the Statement of Financial Accounting Standards Board will have a material impact on its Consolidatedconsolidated Statementfinancial of Operations or its Consolidated Balance Sheet.statements.
The statements contained above in Management’s Discussion and Analysis concerning the Company’s future revenues, profitability, financial resources, financing efforts, market demand and product development are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to the Company that are based on the beliefs of the management of the Company, as well as assumptions and estimates made by and information currently available to the Company’s management. The Company’s actual results in the future may differ materially from those indicated by the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment, including, but not limited to competitive factors and pricing and cost pressures, the Company’s ability to service its loan and refinance the Senior Note before its maturity in 2026,loan, the emergence or spread of human or animal pandemics (such as COVID-19 or the Avian Bird Flu), non-renewal of franchise agreements or thecontemplated openings contemplated by the Development Agreement not occurring, shifts in market demand, the success of franchise programs, general economic conditions, war or other global or regional disruptions, changes in demand for the Company’s products or franchises, the impact of franchise regulation, the success or failure of individual franchisees and inflation, other changes in prices or supplies of food ingredients and labor and as well as the factors discussed under “Risk Factors” contained in the Annual Report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. If activist stockholder activities ensue, or if certain parties (acting individually or as a group) seek initiate interference in the Company’s business relationships, the Company business could be adversely impacted.
NROM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 1 trade date, 5,556 shares, about $3.8K). Net open-market shares: -5,556 (purchases minus sales); net value about -$3.8K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-27 | Coape-Arnold Douglas Harold |
Open-market sale | 5,556 | $0.68 | $3.8K |
| 2026-06-05 | Mobley Paul W |
Option exercise | 450,000 | $0.10 | $45.0K |
Well-known investors holding NROM (13F)
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