Noble Romans Inc 10-K/A for FY2025
Noble Romans Inc (NROM)
About this 10-K/A
Noble Romans Inc filed this 10-K/A on October 16, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Noble Roman's, Inc. amended its 2025 Form 10-K solely to correct the auditor's report date from May 29, 2026 to June 5, 2026, with no changes to financial statements. The amendment includes the corrected Report of Independent Registered Public Accounting Firm and restates Item 8 in its entirety. AI summary
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $16.46M
- up 8.7% from $15.15M a year earlier
- Net income
- $1.17M
- compared with a net loss of $3174 a year earlier
- Diluted EPS
- $0.04
- compared with $0.00 a year earlier
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.20549
FORM
(Mark one)
| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| for the fiscal year ended December 31, 2025. |
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| Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 | |
| for the transition period from ____ to____. |
Commission file number
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction |
| (I.R.S. Employer |
of incorporation or organization) |
| Identification No.) |
(Address of principal executive offices)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
N/A |
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Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
☒ | Smaller Reporting Company | ||
| Emerging Growth Company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price of the registrant’s common shares on such date was approximately $
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:
Documents Incorporated by Reference: None
Explanatory Note
This Amendment No. 1 to Form 10K (this “Amendment”) amends the Annual Report on Form 10-K of Noble Roman’s Inc (the “Company”) for the fiscal year ended December 31, 2025 (the “Original Filing”).
The Company is filing this Amendment solely to correct a clerical error in the Report of Independent Registered Public Accounting Firm included in the Original Filing. Specifically, the report inadvertently reflected a report date of May 29, 2026, instead of the correct report date of June 5, 2026. This correction does not result in any changes to previously issued financial statements or auditor’s opinion thereon.
Item 8 of Part II of the Original Filing is being amended and restated in its entirety to include the corrected Report of Independent Registered Public Accounting Firm, and this Amendment includes the applicable exhibits and certifications under Item 15 of Part IV.
Except as described above, no other changes have been made to the Original Filing. The Company has not updated the disclosures contained therein to reflect any events occurring subsequent to the date of the Original Filing.
| 2 |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Balance Sheets
Noble Roman’s, Inc. and Subsidiaries
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| December 31, |
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Assets |
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| 2025 |
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Current assets: |
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Cash |
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Employee Retention Tax Credit receivable |
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Accounts receivable - net |
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Inventories |
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Prepaid expenses |
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Total current assets |
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Property and equipment: |
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Equipment |
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Leasehold improvements |
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Less accumulated depreciation and amortization |
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Net property and equipment |
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Deferred tax asset |
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Deferred contract costs |
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Goodwill |
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Operating lease right of use assets |
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Other assets |
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Total assets |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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Current portion of operating lease liability |
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Current portion of Corbel loan payable |
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Convertible subordinated notes |
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Warrant liability |
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Total current liabilities |
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Long-term obligations: |
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Loan payable to Corbel net of current portion |
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Convertible notes payable |
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Operating lease liabilities – net of current portion |
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Deferred contract income |
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Total long-term liabilities |
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Total liabilities |
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See Note 12 regarding Contingencies |
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Stockholders’ equity: |
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Common Stock – no par value ( |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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See accompanying notes to consolidated financial statements.
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Consolidated Statements of Operations
Noble Roman’s, Inc. and Subsidiaries
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| Year Ended December 31, |
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| 2025 |
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Restaurant revenue - company-owned restaurants |
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Restaurant revenue - company-owned non-traditional |
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Franchising revenue |
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Administrative fees and other |
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Total revenue |
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Operating expenses: |
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Restaurant expenses - company-owned restaurants |
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Restaurant expenses - company-owned non-traditional |
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Franchising expenses |
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Total operating expenses |
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Depreciation and amortization |
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General and administrative |
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Cost of new warrants issued |
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Total expenses |
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Operating income |
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Interest expense |
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Net change in warrant-related earnings effect |
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Net (loss) income before income taxes |
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Income tax (benefit) expense |
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Net (loss) income |
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Income per share - basic: |
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Net income |
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Number of common shares outstanding |
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Diluted (loss) income per share: |
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Net (loss) income |
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Number of diluted common shares outstanding |
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See accompanying notes to consolidated financial statements.
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Consolidated Statements of Changes in
Stockholders’ Equity
Noble Roman’s, Inc. and Subsidiaries
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Balance at December 31, 2023 |
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2024 net loss |
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Amortization of value of stock options |
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Balance at December 31, 2024 |
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2025 net income |
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Amortization of value of stock options |
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Balance at December 31, 2025 |
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See accompanying notes to consolidated financial statements.
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Consolidated Statements of Cash Flows
Noble Roman’s, Inc. and Subsidiaries
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| Year ended December 31, |
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OPERATING ACTIVITIES |
| 2024 |
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| 2025 |
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Net (loss) income |
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Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
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Deferred income taxes |
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Amortization of stock options |
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Change in warrant-related earnings effect |
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Capitalization of PIK interest and expenses |
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Depreciation and amortization |
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Allowance for credit losses |
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Amortization of operating lease asset |
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Amortization of loan closing costs and payment in-kind interest expense |
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Deferred contract revenue |
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Deferred contract cost |
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Changes in operating assets and liabilities |
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(Increase) decrease in: |
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Accounts receivable and employee retention tax credit receivable |
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Inventories |
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Prepaid expenses |
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Operating lease liabilities |
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Other assets including long-term portion of accounts receivable |
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Increase in: |
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Accounts payable and accrued expenses |
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NET CASH PROVIDED BY OPERATING ACTIVITIES |
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INVESTING ACTIVITIES |
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Purchase of property and equipment |
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NET CASH USED BY INVESTING ACTIVITIES |
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FINANCING ACTIVITIES |
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Principal payments on Corbel loan payable and additional debt discount |
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NET CASH USED BY FINANCING ACTIVITIES |
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Decrease in cash |
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Cash at beginning of year |
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Cash at end of year |
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Supplemental Schedule of Non-Cash Investing and Financing Activities:
None.
Cash interest paid in 2024 was $1.17 million. No income taxes were paid in 2024.
Cash interest paid in 2025 was $.91 million. No income taxes were paid in 2025.
See accompanying notes to consolidated financial statements.
| 6 |
Notes to Consolidated Financial Statements
Noble Roman’s, Inc. and Subsidiaries
December 31, 2025 and 2024
Note l: Summary of Significant Accounting Policies
Organization: The Company, with two wholly-owned subsidiaries, sells and services franchises and licenses, and operates Company-owned stand-alone restaurants and non-traditional foodservice operations under the trade names “Noble Roman’s Pizza,” “Noble Roman’s Craft Pizza & Pub,” “Noble Roman’s Take-N-Bake,” and “Tuscano’s Italian Style Subs.” Unless the context otherwise indicates, reference to the “Company” are to Noble Roman’s, Inc. and its wholly-owned subsidiaries.
Principles of Consolidation: The consolidated financial statements include the accounts of Noble Roman’s, Inc. and its wholly-owned subsidiaries, RH Roanoke, Inc. and Pizzaco, Inc. (inactive). Inter-company balances and transactions have been eliminated in consolidation.
Inventories: Inventories consist of food, beverage, restaurant supplies, restaurant equipment and marketing materials and are stated at the lower of cost (first-in, first-out) or net realizable value.
Property and Equipment: Equipment and leasehold improvements are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives ranging from five years to 20 years. Leasehold improvements are amortized over the shorter of estimated useful life or the term of the lease including likely renewals.
Franchise Support Costs: Certain direct costs of franchising operations and all upfront fees were charged to deferred costs and deferred income, respectively, which were approximately equal, and are both amortized over the life of each franchise agreement in 2024 and 2025.
Leases: The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets (“ROU”), and lease liability obligations are included in the Company’s balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes in the lease payments made and excludes lease incentives and direct lease costs. The Company’s lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.
Deferred Revenue and Deferred Cost: The upfront fees for new franchise locations are credited to deferred contract income and debited to deferred contract cost, respectively, and amortized over the life of the individual franchises.
Cash: Includes actual cash balance. There are not any withdrawal restrictions.
Accounts Receivable and Allowance for Credit Losses
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The Company accounts for expected credit losses in accordance with ASC Topic 326, Financial Instruments – Credit Losses.
The Company evaluates accounts receivable and other financial assets measured at amortized cost for expected credit losses on a periodic basis. In estimating expected credit losses, management considers historical collection experience, current economic conditions, aging of receivable balances, specific customer circumstances, subsequent collections, and reasonable and supportable forecasts.
The Company's receivables consist primarily of franchise royalties, manufacturer allowances, distributor allowances, equipment commissions, and other franchise-related receivables.
Management evaluates individual receivable balances when information becomes available indicating that collection may be uncertain. Receivables are written off when management determines that collection is no longer probable.
Based on management's evaluation of historical collection experience, current conditions, subsequent collections, aging of receivable balances, and the nature of the underlying receivables, management recorded an allowance for expected credit losses of approximately $
The allowance reflects management's estimate of expected credit losses over the contractual life of the related receivables and does not represent a write-off of the underlying receivable balances. The Company continues to monitor collection trends and customer-specific developments and adjusts the allowance for expected credit losses when circumstances indicate such adjustment is necessary.
The Company considers both current conditions and reasonable and supportable forecasts of future conditions when evaluating expected credit losses for uncollectible receivable balances. In management’s determination of the allowance for credit losses, the Company pools receivables by days outstanding and applies an expected credit loss percentage to each pool. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Current conditions considered include predefined aging criteria, as well as specified events that indicate the balance due is not collectible. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available macroeconomic data and whether future credit losses are expected to differ from historical losses.
The Company and its company-owned locations receive revenues from daily sales which are reported daily and included in income when received. Revenue from franchise fees is recorded as deferred income and amortized into income over the term of the franchise agreements which have, for the most part, ten-year terms. The Company receives revenue from ongoing royalty income which is based on sales by the franchisee reported to the Company weekly as they occur, and 7% of those reported sales are recorded as royalty income and collected from the franchisee that same day via ACH withdrawal from their bank account. The Company receives equipment commissions from the equipment distributor on sales of equipment to the franchisee which is arranged for by the Company. That commission is recorded as earned and generally collected every 30 days from the equipment distributor. The Company’s other regular source of revenue is from manufacturer allowances and distributor allowances. In the case of distributors, the Company receives a distribution report from each distributor on a monthly basis which report indicates the amount of fees the distributor has collected from the franchisee on behalf of the Company and held in trust when billed by the distributor and remitted to the Company on a monthly basis. Manufacturing allowances are generally negotiated price allowances from the manufacturer of the various Noble Roman’s ingredients for the benefit of using Noble Roman’s recipes and formulas for producing the ingredients. That allowance is recognized as income when the distributor reports the sales of those ingredients to each of the locations. In addition, both the cheese manufacturer and the cheese sauce manufacturer have an annual incentive plan for which the Company receives payment in January or February of each year based on the previous year’s usage. Deferred contract income at the end of 2024 was $1.60 million and the deferred contract income at the end of 2025 was $1.70 million. Deferred contract cost was approximately equal to deferred contract income at such dates. In addition to the deferred income and deferred cost, the Company also had contract income consisting of franchise fees, royalties, and manufacturing allowances with a receivable balance of $
| 8 |
Advertising Costs: The Company records advertising costs consistent with ASC Topic 720, “Other Expense” topic and Subtopic 720-35, “Advertising Costs”. This statement requires the Company to expense advertising production costs the first time the production material is used.
Fair Value Measurements and Disclosures: The Fair Value Measurements and Disclosures topic of ASC Topic 820 requires companies to determine fair value based on the price that would be received to sell the assets or paid to transfer to liability to a market participant. The fair value measurements and disclosure topic emphasis that fair value is a market-based measurement, not an entity specific measurement. The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:
Level One: Quoted market prices in active markets for identical assets or liabilities.
Level Two: Observable market–based inputs or unobservable inputs that are corroborated by market data.
Level Three: Unobservable inputs that are not corroborated by market data.
Use of Estimates: The preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In 2020, in light of the additional uncertainty created as a result of the COVID-19 pandemic, the Company decided to create a reserve for collectability on all long-term franchisee receivables. The Company will continue to pursue collection where circumstances are appropriate and all collections of these receivables in the future will result in additional income at the time received or otherwise secured. The Company evaluates its property and equipment and related costs periodically to assess whether any impairment indications are present, including recurring operating losses and significant adverse changes in legal factors or business climate that affect the recovery of recorded value. If any impairment of an individual asset is evident, a loss would be provided to reduce the carrying value to its estimated fair value.
Debt and Warrant Issuance Costs: Debt and warrant issuance cost is presented on the balance sheet as a direct reduction from the carrying amount of the associated liability. Those issuance costs are amortized to interest expense ratably over the term of the applicable debt or warrant. The unamortized issuance cost at December 31, 2025 and 2024 were $
| 9 |
Intangible Assets: The Company recorded goodwill of $
Long Lived Assets: The Company reviews long-lived assets on an annual basis to determine if there has been any impairment in value. The Company has determined there has been no impairment of value in the recorded fixed assets.
Revenue Recognition
The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
The Company generates revenue from the following primary sources:
Restaurant Revenue
Restaurant revenue consists primarily of food and beverage sales from Company-owned Craft Pizza & Pub locations and Company-operated non-traditional locations. Revenue is recognized at the point in time when food and beverage products are provided to customers. Payment is generally received at the time of sale through cash, credit card, or other electronic payment methods.
Franchise Royalties
The Company enters into franchise agreements that generally provide for ongoing royalty fees based on a percentage of franchisee sales. Royalty revenue is recognized as the underlying franchise sales occur because the nature of the Company's performance obligation is to provide ongoing access to the Company's intellectual property and franchise system. Royalty revenue is generally billed and collected weekly through automated clearing house (ACH) withdrawals.
Initial Franchise Fees
Initial franchise fees are received upon execution of franchise agreements. Because the initial franchise fee does not represent a separate performance obligation, the fee is deferred and recognized over the term of the related franchise agreement, which is generally ten years, as the Company satisfies its ongoing performance obligations to the franchisee.
Equipment Commissions
The Company assists franchisees in arranging equipment purchases from third-party vendors and earns commissions on certain equipment sales. Revenue is recognized when the underlying equipment transaction is completed and the Company's performance obligation has been satisfied.
| 10 |
Manufacturer and Distributor Allowances
The Company receives consideration from approved manufacturers and distributors related to the use of the Company's proprietary recipes, formulas, specifications, and approved product programs. Revenue from these arrangements is recognized as the underlying product sales occur based on sales reports received from distributors and manufacturers.
Administrative Fees and Other Revenue
Administrative fees and other revenue primarily consist of various franchise-related charges and other miscellaneous revenue streams and are recognized when the related services are performed or when the Company's performance obligations have been satisfied.
Disaggregation of Revenue
The following table disaggregates revenue by major revenue source for the years ended December 31:
Revenue Source |
| 2025 |
|
| 2024 |
| ||
Company-owned Craft Pizza & Pub restaurant revenue |
| $ |
|
| $ |
| ||
Company-owned non-traditional restaurant revenue |
|
|
|
|
|
| ||
Franchising revenue (including royalties, franchise fee amortization, manufacturer allowances, equipment commissions and other franchise-related revenue) |
|
|
|
|
|
| ||
Administrative fees and other revenue |
|
|
|
|
|
| ||
Total Revenue |
| $ |
|
| $ |
| ||
Contract Balances
Deferred contract income primarily consists of initial franchise fees received from franchisees for which revenue recognition has not yet occurred. Deferred contract costs primarily consist direct incremental costs associated with obtaining franchise agreements. Deferred contract income and deferred contract costs are generally recognized over the related franchise term.
Deferred contract income was approximately $
The Company recognized approximately $
Franchising Revenue: This includes royalty income, franchise fee income in accordance with ASC Topic 606, commissions on equipment, marketing allowances and other miscellaneous income. Royalties are generally recognized as income monthly based on a percentage of monthly sales of franchised or licensed restaurants and from audits and other inspections as they come due and payable by the franchisee. Administrative fees are recognized as income monthly as earned. However, initial franchise fees and related contract costs, as defined in the franchise agreements, were both deferred and amortized on a straight-line basis over the term of the franchise agreements, generally five to ten years.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to reverse.
| 11 |
The Company evaluates the realizability of deferred tax assets on a periodic basis and records a valuation allowance when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In evaluating the need for a valuation allowance, management considers available positive and negative evidence, including historical operating results, projected future taxable income, reversal of existing temporary differences, and tax planning strategies.
The Company recognizes the financial statement effects of uncertain tax positions when it is more likely than not that the position will be sustained upon examination by the applicable taxing authority. Interest and penalties related to uncertain tax positions, if any, are recognized as a component of income tax expense.
Basic and Diluted Net (Loss) Income Per Share: Net (loss) income per share is based on the weighted average number of common shares outstanding during the respective year. When dilutive, stock options and warrants are included as share equivalents using the treasury stock method.
The following table sets forth the calculation of basic and diluted (loss) income per share for the year ended December 31, 2024:
|
| Income (Numerator) |
|
| Shares (Denominator) |
|
| Per Share Amount |
| |||
Net income per share – basic |
|
|
|
|
|
|
|
|
| |||
Net income (loss) |
| $ | ( | ) |
|
|
|
| $ | (0.00 | ) | |
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Options and warrants |
|
|
|
|
|
|
|
|
|
|
| |
Convertible Notes |
|
|
|
|
|
|
|
|
|
| ||
Diluted net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ |
|
|
|
|
| $ |
| |||
The following table sets forth the calculation of basic and diluted income per share for the year ended December 31, 2025:
|
| Income (Numerator) |
|
| Shares (Denominator) |
|
| Per Share Amount |
| |||
Net income per share – basic |
|
|
|
|
|
|
|
|
| |||
Net income |
| $ |
|
|
|
|
| $ |
| |||
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Options and warrants |
|
|
|
|
|
|
|
|
|
|
| |
Convertible Notes |
|
|
|
|
|
|
|
|
|
| ||
Diluted net income per share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
| $ |
| |||
Subsequent Events: The Company evaluated subsequent events through the date the consolidated statements were issued and filed with the Annual Report on Form 10-K. Under the Senior Note, extended in 2025, the maturity of the Corbel loan is now June 30, 2026, therefore the Company is working on a closing with one primary lender and three back-up lenders to obtain an approximate $7 million to $8 million senior loan to repay the current Senior Note, the subordinated convertible debentures and to purchase all outstanding warrants owned by Corbel.
| 12 |
Stock-based compensation – The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes valuation model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued on the effective date of the agreement in accordance with generally accepted accounting principles, which includes determination of the fair value of the share-based transaction. The fair value is determined through use of the quoted stock price, the exercise price and the use of the Black-Scholes calculation.
Employee Retention Credit: The employee retention credit (“ERC”) is a refundable tax credit that businesses can claim on qualified wages paid to employees. The credit was introduced in March 2020 in the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) to incentivize employers to keep their employees on their payroll during the pandemic and economic shutdown. The credit applies to all qualified wages, including certain health plan expenses, paid during the period in which the operations were fully or partially suspended due to a government shutdown order or where there was significant decline in gross receipts.
When first established under the CARES Act,
During the first quarter of 2023 the Company determined that it was entitled to an ERC of $
Recently Adopted Accounting Standards
During the year ended December 31, 2025, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires enhanced income tax disclosures, including additional disaggregation in the rate reconciliation and income taxes paid by jurisdiction. The adoption did not impact the Company’s financial position, results of operations, cash flows, or income tax recognition and measurement, but resulted in expanded disclosures in the income tax footnote.
The Company also adopted ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements. The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures.
The Company previously adopted the annual disclosure requirements of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, and adopted the interim disclosure requirements during 2025. The guidance requires enhanced disclosures about reportable segment expenses and other segment information. The adoption did not impact the Company’s financial position, results of operations, or cash flows, but resulted in expanded segment disclosures.
| 13 |
Reclassification
Certain amounts in the prior-year financial statements have been reclassified to confirm to the current-year presentation. Such reclassification had no impact on previously reported results of operations, financial position or related cash flows.
Recently Issued Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, as clarified by ASU 2025-01. The guidance requires public business entities to provide additional disclosures about certain expense categories included in income statement captions. The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance on its consolidated financial statement disclosures and does not expect the adoption to impact recognition or measurement.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The effective date for each amendment will be the date on which the SEC removes the related disclosure requirement from Regulation S-X or Regulation S-K, with early adoption prohibited. The Company is currently evaluating the impact of this guidance and will continue to monitor related SEC rulemaking.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. The guidance clarifies the accounting for induced conversions of convertible debt instruments and is effective for annual reporting periods beginning after December 15, 2025. The Company has convertible debt instruments outstanding and is currently evaluating the impact of this guidance. The Company does not expect adoption to have a material impact unless it enters into induced conversion transactions after adoption.
Note 2: Inventory
Inventory consists of ingredient inventory used to make products in the Company-owned restaurants, marketing materials to sell to franchisees and equipment inventory to be used in future locations. At December 31, 2024 and 2025 inventory consisted of the following:
|
| 2024 |
|
| 2025 |
| ||
Ingredient inventory used to make products in company locations |
| $ |
|
| $ |
| ||
Marketing materials |
|
|
|
|
|
| ||
Equipment inventory |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
| 14 |
Note 3: Accounts Receivable
At December 31, 2024 and 2025, the carrying value of the Company’s accounts receivable has been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company anticipates that substantially all of its receivables reflected on the Consolidated Balance Sheets as of December 31, 2024 and 2025 will be collected although the Company has reserved $
.
Other assets, as of December 31, 2025, include security deposits and other miscellaneous assets in the amount of $
Note 4: Property and Equipment
A summary of property and equipment as of December 31, 2024 and 2025 is as follows:
|
| 2024 |
|
| 2025 |
| ||
Equipment |
| $ |
|
| $ |
| ||
Leasehold improvements |
|
|
|
|
|
| ||
Total before depreciation and amortization |
|
|
|
|
|
| ||
Less accumulated depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
Net property and equipment |
| $ |
|
| $ |
| ||
Note 5: Notes Payable
On February 7, 2020, the Company entered into the Agreement with Corbel pursuant to which, among other things, the Company issued to Corbel the Senior Note in the initial principal amount of $
The Senior Note prior to the Amendment was bearing cash interest of SOFR, as defined in the Agreement, plus
In conjunction with the borrowing under the Senior Note, the Company issued to Corbel the Original Corbel Warrant to purchase up to
| 15 |
At December 31, 2025, the balance of the Senior Note was comprised of:
Principal |
| $ |
| |
Unamortized Loan Closing Cost |
|
|
| |
Carrying Value |
| $ |
|
In January 2017, the Company completed the offering of $
Placement agent fees and other origination costs of the Notes were deducted from the carrying value of the Notes as original issue discount (“OID”). The OID was being amortized over the term of the Notes. The OID was fully amortized in early 2022.
Total cash and non-cash interest accrued on the Company’s indebtedness in 2024 was $
Note 6 – Warrant Liability and Fair Value Measurements
Warrant Liability
The Company accounts for certain warrants as liabilities pursuant to ASC Topic 815, Derivatives and Hedging, because certain provisions of the warrant agreements prevent the warrants from qualifying for permanent equity classification.
| 16 |
Accordingly, the warrants are initially recognized at fair value and subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings.
During 2025, the Company amended its financing arrangements with Corbel Capital Partners SBIC, L.P. ("Corbel"), including amendments to previously issued warrants and the issuance of additional warrants in connection with modifications of the Company's senior secured financing arrangements.
As of December 31, 2025, the Company had warrants outstanding that were classified as liabilities and recorded at fair value.
The following table summarizes activity in the warrant liability:
|
| Amount |
| |
Fair value of warrant liability – January 1, 2025 |
| $ |
| |
New warrants issued |
|
| |
|
Change in fair value recognized in earnings |
|
| ( | ) |
Fair value of warrant liability – December 31, 2025 |
| $ |
| |
The change in fair value of the warrant liability is included in the accompanying Consolidated Statements of Operations as "Change in fair value of warrants."
Fair Value Measurements
The Company measures the warrant liability at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurement.
ASC Topic 820 establishes a hierarchy for inputs used in measuring fair value as follows:
· | Level 1 – Quoted prices in active markets for identical assets or liabilities. |
· | Level 2 – Observable inputs other than quoted prices included in Level 1. |
· | Level 3 – Unobservable inputs supported by little or no market activity. |
The Company's warrant liability is classified within Level 3 of the fair value hierarchy because significant valuation inputs are unobservable and require management judgment.
The following table presents the Company's warrant liability measured at fair value on a recurring basis as of December 31:
Fair Value Hierarchy |
| 2025 |
|
| 2024 |
| ||
Level 1 |
| $ |
|
| $ |
| ||
Level 2 |
|
|
|
|
|
| ||
Level 3 |
|
|
|
|
|
| ||
Total Fair Value |
| $ |
|
| $ |
| ||
Valuation Methodology
The Company utilized a valuation methodology incorporating market participant assumptions and available market evidence. Significant assumptions considered in the valuation included:
· | Market price of the Company's common stock; |
· | Contractual exercise prices; |
· | Remaining contractual terms; |
· | Expected volatility; |
· | Risk-free interest rates; |
· | Probability of exercise and settlement assumptions; and |
· | Other relevant market and contractual factors. |
| 17 |
Because significant valuation inputs are not directly observable in active markets, the valuation is classified as a Level 3 measurement.
Level 3 Rollforward
The following table presents a rollforward of the Company's Level 3 warrant liability:
|
| Amount |
| |
Balance at January 1, 2025 |
| $ |
| |
New warrants issued |
|
| |
|
Fair value adjustments recognized in earnings |
|
| ( | ) |
Balance at December 31, 2025 |
| $ |
| |
Subsequent Event
Subsequent to December 31, 2025, the Company entered into an agreement with Corbel in connection with the anticipated repayment of the Company's senior secured financing arrangements. Under the terms of the agreement, the Company agreed to acquire and Corbel agreed to surrender certain outstanding warrants for aggregate consideration of $
Note 7: Royalties and Fees
Approximately $
In conjunction with the development of Noble Roman’s Pizza and Tuscano’s Italian Style Subs, the Company has devised its own recipes for many of the ingredients that go into the making of its products (“Proprietary Products”). The Company contracts with various manufacturers to manufacture its Proprietary Products in accordance with the Company’s recipes and formulas and to sell those products to authorized distributors at a contract price which includes an allowance for use of the Company’s recipes. The manufacturing contracts also require the manufacturers to hold those allowances in trust and to remit those allowances to the Company on a periodic basis, usually monthly. The Company recognizes those allowances in revenue as earned based on sales reports from the distributors.
During the 12-month period ended December 31, 2025 there were no company-operated or franchised Craft Pizza & Pub restaurants opened or closed. During that period there were approximately 60 new non-traditional outlets opened and six non-traditional outlets closed.
| 18 |
Note 8: Liabilities for Leased Facilities
The Company has various leases for its Company-owned Craft Pizza & Pub locations and its corporate office.
The following table summarizes the right of use asset and lease liability using a ten-year term for the leases and assumes
Right of use assets |
| $ |
| |
Lease liability |
|
|
|
|
Current |
|
|
| |
Long-term |
|
|
| |
Total |
| $ |
|
The following table summarizes the Company’s scheduled minimum lease payments as of December 31, 2025.
2026 |
| $ |
| |
2027 and 2028 |
|
|
| |
2029 and after |
|
|
| |
Total operating lease obligations |
| $ |
|
Note 9: Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.
The components of income tax expense (benefit) for the years ended December 31 are as follows:
|
| 2025 |
|
| 2024 |
| ||
Current federal income tax expense |
| $ |
|
| $ |
| ||
Current state income tax expense |
|
|
|
|
|
| ||
Deferred federal income tax expense (benefit) |
|
|
|
|
| ( | ) | |
Deferred state income tax expense (benefit) |
|
|
|
|
| ( | ) | |
Total income tax expense (benefit) |
| $ |
|
| $ | ( | ) | |
Income before income taxes was approximately $
The difference between income taxes computed using the U.S. federal statutory tax rate and the Company's effective income tax rate for the years ended December 31 is summarized as follows:
|
| 2025 |
|
| 2024 |
| ||
Federal statutory tax rate |
|
| % |
|
| % | ||
State income taxes, net of federal benefit |
|
| % |
|
| % | ||
Permanent differences |
|
| % |
|
| ( | )% | |
Effective tax rate |
|
| % |
|
| % | ||
| 19 |
Deferred tax assets consist primarily of the following at December 31:
|
| 2025 |
|
| 2024 |
| ||
Federal and state net operating loss carryforwards |
| $ |
|
| $ |
| ||
Total deferred tax assets |
|
|
|
|
|
| ||
Valuation allowance |
|
|
|
|
|
| ||
Net deferred tax asset |
| $ |
|
| $ |
| ||
The Company had federal and state net operating loss carryforwards of approximately $
Management evaluates the realizability of deferred tax assets on a periodic basis. In assessing the need for a valuation allowance, management considers all available positive and negative evidence, including historical operating results, projected future taxable income, reversal of existing temporary differences, and tax planning strategies.
Based on management's assessment of the Company's historical operating performance, recent profitability, projected future taxable income, and expected utilization of available net operating loss carryforwards, management concluded that it is more likely than not that the deferred tax assets will be realized. Accordingly, no valuation allowance was recorded as of December 31, 2025 or 2024.
The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions. Tax years 2022 through 2025 remain subject to examination by the applicable taxing authorities.
The Company recognizes the financial statement effects of uncertain tax positions when it is more likely than not that the position will be sustained upon examination by the relevant taxing authority. As of December 31, 2025 and 2024, management concluded that no material uncertain tax positions existed requiring recognition or disclosure in the accompanying consolidated financial statements.
The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. No material interest or penalties were recognized during 2025 or 2024.
Note 10: Common Stock
As of December 31, 2025, there were outstanding $
The Company has an incentive stock option plan for key employees, officers and directors. The options are generally exercisable three years after the date of grant and expire ten years after the date of grant. The exercise prices equaled the fair market value of the stock at the date of grant. As of December 31, 2025, options for
| 20 |
The Company adopted the modified prospective method to account for stock option grants, which does not require restatement of prior periods. Under the modified prospective method, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption, net of an estimate of expected forfeitures. Compensation expense is based on the estimated fair values of stock options determined on the date of grant and is recognized over the related vesting period, net of an estimate of expected forfeitures which is based on historical experience.
The Company estimates the fair value of its option awards on the date of grant using the Black-Scholes option pricing model. The risk-free interest rate is based on external data while all other assumptions are determined based on the Company’s historical experience with stock options. The following assumptions were used for grants in 2025:
| Expected volatility |
|
| % | |
| Expected dividend yield |
| None |
| |
| Expected term (in years) |
|
|
| |
| Risk-free interest rate |
|
| % | |
The following table sets forth the number of shares subject to options outstanding as of December 31, 2023, 2024 and 2025 and the number of shares subject to options granted, exercised or forfeited and/or expired during the years ended December 31, 2024 and 2025:
Balance of employee stock options outstanding as of 12/31/23 |
|
|
| |
Stock options granted during the year ended 12/31/24 |
|
|
| |
Stock options exercised during the year ended 12/31/24 |
|
|
| |
Stock options forfeited/expired during the year ended 12/31/24 |
|
| ( | ) |
Balance of employee stock options outstanding as of 12/31/24 |
|
|
| |
Stock options granted during the year ended 12/31/25 |
|
|
| |
Stock options exercised during the year ended 12/31/25 |
|
|
| |
Stock options forfeited/expired during the year ended 12/31/25 |
|
| ( | ) |
Balance of employee stock options outstanding as of 12/31/25 |
|
|
|
The following table sets forth the number of shares subject to non-vested options outstanding as of December 31, 2023, 2024 and 2025, and the number of shares subject to stock options granted, vested and forfeited and/or expired during the years ended December 31, 2024 and 2025.
Balance of employee non-vested stock options outstanding as of 12/31/23 |
|
|
| |
Stock options granted during the year ended 12/31/24 |
|
|
| |
Stock options vested during the year ended 12/31/24 |
|
| ( | ) |
Stock options forfeited/expired during the year ended 12/31/24 |
|
| ( | ) |
Balance of employee non-vested stock options outstanding as of 12/31/24 |
|
|
| |
Stock options granted during the year ended 12/31/25 |
|
|
| |
Stock options vested during the year ended 12/31/25 |
|
| ( | ) |
Stock options forfeited/expired during the year ended 12/31/25 |
|
| ( | ) |
Balance of employee non-vested stock options outstanding as of 12/31/25 |
|
|
|
The weighted average grant date exercise price of employee stock options granted during 2025 was $
| 21 |
Note 11: Statements of Financial Accounting Standards
The Company does not believe that recently issued Statements of Financial Accounting Standards will have any material impact on the Company’s Consolidated Statements of Operations or its Consolidated Balance Sheets. In December 2023 the FASB issued ASU 2023-09 “Improvements to Income Tax Disclosure” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles of ASC Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024 including interim periods therein. The Company will adopt this ASU 2023-09 for tax year beginning January 1, 2025, however the Company does not expect adoption will have a material effect on the Company’s consolidated financial statements.
Note 12: Contingencies
The Company, from time to time, is or may become involved in litigation or regulatory proceedings arising out of its normal business operations.
Currently, there are no such pending proceedings which the Company considers to be material.
There are no commitments to any key executives or officers beyond an employment agreement with the Executive Chairman and the President and Chief Executive Officer.
Note 13: Certain Relationships and Related Transactions
The following is a summary of transactions to which the Company and certain officers and directors of the Company are a party or have a financial interest. The Board of Directors of the Company has adopted a policy that all transactions between the Company and its officers, directors, principal shareholders and other affiliates must be approved by a majority of the Company’s disinterested directors and be conducted on terms no less favorable to the Company than could be obtained from unaffiliated third parties.
Of the 48 Units sold in the private placement which began in October 2016, three Units were purchased by Paul W. Mobley, Executive Chairman, and four Units were purchased by Marcel Herbst, Director. Each Unit consists of a Note in the principal amount of $
| 22 |
As of December 31, 2025, Paul W. Mobley, Executive Chairman and Chief Financial Officer, beneficially owned subordinated convertible notes with an aggregate principal balance of $
During 2025, the Company paid approximately $
During 2025, Mr. Mobley acquired from an existing note holder a subordinated convertible note with a principal balance of $
Note 14 – Segment Information
The Company accounts for segment reporting in accordance with ASC Topic 280, Segment Reporting.
Operating segments are components of an enterprise for which separate financial information is available and regularly reviewed by the chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance.
The Company's CODM is its Chief Executive Officer.
The Company has identified two reportable operating segments:
· | Franchising – Consists primarily of franchise royalties, franchise fee revenue, manufacturer and distributor allowances, equipment commissions, and related support activities. |
· | Company-Owned Restaurants – Consists of the operations of Company-owned Craft Pizza & Pub locations and Company-operated non-traditional restaurant locations. |
The CODM evaluates segment performance primarily based on segment revenue, segment operating expenses, and segment contribution margin. General corporate expenses, depreciation and amortization, interest expense, income taxes, and certain other corporate-level items are not allocated to operating segments for purposes of evaluating segment performance.
Segment information for the years ended December 31, 2025 and 2024 is as follows:
Year Ended December 31, 2025
|
| Franchising |
|
| Company-Owned Restaurants |
|
| Total |
| |||
Revenue |
| $ |
|
| $ |
|
| $ |
| |||
Administrative fees and other revenue |
|
|
|
|
|
|
|
|
| |||
Total revenue |
|
|
|
|
|
|
|
|
| |||
Segment operating expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Segment contribution margin |
| $ |
|
| $ |
|
| $ |
| |||
| 23 |
Year Ended December 31, 2024
|
| Franchising |
|
| Company-Owned Restaurants |
|
| Total |
| |||
Revenue |
| $ |
|
| $ |
|
| $ |
| |||
Administrative fees and other revenue |
|
|
|
|
|
|
|
|
| |||
Total revenue |
|
|
|
|
|
|
|
|
| |||
Segment operating expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Segment contribution margin |
| $ |
|
| $ |
|
| $ |
| |||
The following table reconciles total segment contribution margin to consolidated income before income taxes:
Year Ended December 31,
|
| 2025 |
|
| 2024 |
| ||
Total segment contribution margin |
| $ |
|
| $ |
| ||
General and administrative expenses |
|
| ( | ) |
|
| ( | ) |
Depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
Operating income |
|
|
|
|
|
| ||
Interest expense |
|
| ( | ) |
|
| ( | ) |
Change in fair value of warrants |
|
|
|
|
|
| ||
Income (loss) before income taxes |
| $ |
|
| $ | ( | ) | |
The CODM does not regularly review total assets by segment for purposes of allocating resources. Accordingly, asset information by segment is not presented.
Substantially all revenues are generated within the United States. No individual franchisee or customer accounted for more than 10% of consolidated revenue during 2025 or 2024.
Note 15 – Subsequent Events
The Company evaluated subsequent events through the date the consolidated financial statements were issued.
Subsequent to December 31, 2025, the Company entered into arrangements relating to the anticipated refinancing and repayment of its Senior Secured Promissory Note with Corbel Capital Partners SBIC, L.P. ("Corbel").
The Company and Corbel entered into a payoff agreement providing for the repayment in full of amounts outstanding under the Senior Secured Promissory Note and related financing arrangements. In connection with the payoff agreement, the Company agreed to purchase, and Corbel agreed to surrender for cancellation, all outstanding warrants held by Corbel for aggregate consideration of $
The payoff agreement provides that the repayment of the outstanding indebtedness and the repurchase and cancellation of the warrants will become effective upon satisfaction of the conditions specified in the agreement, including payment of the required payoff amounts. If the conditions are not satisfied within the time period specified in the agreement, the payoff agreement may terminate and the existing financing arrangements would remain outstanding in accordance with their terms.
The Company is actively pursuing replacement financing to refinance the Corbel indebtedness, repay outstanding subordinated convertible notes, fund the repurchase and cancellation of the Corbel warrants, and provide additional working capital. As of the date the consolidated financial statements were issued, the financing transaction was still in progress.
Management evaluated these events in accordance with ASC Topic 855, Subsequent Events. Because the payoff agreement, warrant repurchase arrangement, and related refinancing activities occurred subsequent to December 31, 2025, no adjustment has been recorded in the accompanying consolidated financial statements. Management has disclosed these matters because they are significant subsequent events relevant to an understanding of the Company's financial position, liquidity, and warrant liability.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of
Directors/Audit Committee
and Stockholders of Noble
Roman’s, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Noble Roman’s, Inc. and Subsidiaries(the Company) as of December 31, 2024, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
|
|
We have served as the
Company’s auditor since
2024. Oak Brook, Illinois
Auditor ID#29
June 6, 2025
2107 Swift Drive, Suite 210, Oak Brook, IL 60523 • 708.386.1433 • www.sassetti.com
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Noble Roman's Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Noble Roman's Inc. and Subsidiaries (the Company) as of December 31, 2025, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.
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Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.
Deferred Tax Asset Realizability
As described in Notes 1 and 8 to the consolidated financial statements, the Company recorded a deferred tax asset of approximately $3,100,000 as of December 31, 2025. We identified the evaluation of the deferred tax asset as a critical audit matter because significant auditor judgment was required to evaluate the realizability of the deferred tax asset and management's conclusion that a valuation allowance was not required. The audit required significant judgment in evaluating available positive and negative evidence, including historical operating results, projected future taxable income, available net operating loss carryforwards, and other relevant factors affecting realization.
The primary procedures we performed to address this critical audit matter included:
| · | Inspecting the Company's filed federal income tax returns and evaluating available net operating loss carryforwards; |
| · | Independently estimating taxable income utilizing audited financial statement amounts and known book-tax differences; |
| · | Evaluating significant temporary differences identified during the audit, including lease accounting balances under ASC 842 and other deferred tax items; |
| · | Evaluating management's assessment regarding realization of deferred tax assets; and |
| · | Assessing whether a valuation allowance was required under ASC 740. |
Fair Value Measurement of Warrant Liability
As described in Notes 1 and 5 to the consolidated financial statements, the Company recorded a warrant liability of approximately $500,000 as of December 31, 2025 that is measured at fair value on a recurring basis.
We identified the fair value measurement of the warrant liability as a critical audit matter because the accounting involved significant auditor judgment related to the classification, valuation, and measurement of the warrant liability. The valuation required consideration of complex assumptions including volatility, expected term, risk-free interest rates, exercise prices, and the impact of multiple warrant issuances and amendments during 2025.
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The primary procedures we performed to address this critical audit matter included:
| · | Evaluating the contractual terms of the warrant agreements and related amendments; |
| · | Assessing the appropriateness of liability classification under U.S. GAAP; |
| · | Testing the completeness of warrant issuances and modifications occurring during the year; |
| · | Evaluating the valuation methodology utilized to estimate fair value; |
| · | Testing significant assumptions utilized in the Black-Scholes valuation model, including volatility, expected term, exercise prices, and risk-free interest rates; and |
| · | Recalculating selected components of the warrant liability valuation. |
/s/ Stephano Slack LLC (PCAOB ID#03523)
We have served as the Company’s auditor since 2025.
Wayne, Pennsylvania
June 5, 2026
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NOBLE ROMAN’S, INC. | |||
| Date: October 16, 2026 | By: | /s/ A. Scott Mobley | |
| A. | Scott Mobley, President and Chief Executive Officer | |
| Date: October 16, 2026 | By: | /s/ Paul W. Mobley | |
|
| Paul W. Mobley, Executive Chairman, Chief |
|
|
| Financial Officer and Principal Accounting Officer |
|
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