NROM 10-Q
Noble Romans Inc (NROM)
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
Commission file number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of organization) |
| (I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
| (Zip Code) |
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(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 | N/A | N/A |
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 definition 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 3, 2026, there were
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following unaudited consolidated financial statements are included herein:
| Page 2 |
| Table of Contents |
Noble Roman's, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
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| December 31, 2025 |
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| June 30, 2026 |
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Assets |
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Current assets: |
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Cash |
| $ |
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| $ |
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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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| 7,638,886 |
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| 7,713,711 |
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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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| $ |
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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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| $ |
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Current portion of operating lease liability |
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Current portion of Senior Loans payable |
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Current portion of subordinated notes payable |
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Warrant liability |
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Total current liabilities |
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Long-term obligations: |
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Long-term portion of Senior Loan 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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| $ |
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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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| $ |
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See accompanying notes to condensed consolidated financial statements (unaudited).
| Page 3 |
| Table of Contents |
Noble Roman's, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
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| Three months ended June 30, |
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| Six months ended June 30, |
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| 2025 |
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| 2026 |
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| 2025 |
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| 2026 |
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Revenue: |
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Restaurant revenue – company-owned Craft Pizza & Pub |
| $ |
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| $ |
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| $ |
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| $ |
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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 Craft Pizza &Pub |
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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 expenses |
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Total expenses |
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Operating income |
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Interest expense |
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Income before income taxes |
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Income tax |
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Net income |
| $ |
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| $ |
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| $ |
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| $ |
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Earnings per share – basic: |
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Net income |
| $ | .01 |
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| $ | .01 |
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| $ | .02 |
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| $ | .01 |
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Number of common shares outstanding |
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Diluted earnings per share: |
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Net income |
| $ | .01 |
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| $ | .01 |
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| $ | .01 |
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| $ | .01 |
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Number of common shares outstanding |
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See accompanying notes to condensed consolidated financial statements (unaudited).
| Page 4 |
| Table of Contents |
Noble Roman's, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
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| Common Stock |
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| Accumulated |
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| Shares |
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| Amount |
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| Deficit |
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| Total |
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Six Months Ended June 30, 2026: |
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Balance at December 31, 2025 |
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| $ |
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| $ | ( | ) |
| $ |
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Net income for six months ended June 30, 2026 |
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Amortization of value of employee stock options |
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Exercise of warrant to buy shares |
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Cashless exercise of stock option |
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Balance at June 30, 2026 |
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| $ |
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| $ | ( | ) |
| $ |
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Three Months Ended June 30, 2026:
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| Common Stock |
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| Accumulated |
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| Shares |
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| Amount |
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| Deficit |
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| Total |
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Balance at March 31, 2026 |
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| $ |
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Net income for three months ended June 30, 2026 |
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Amortization of value of employee stock options |
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Exercise of warrant to buy shares |
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Cashless exercise of stock option |
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Balance at June 30, 2026 |
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| Common Stock |
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| Shares |
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| Amount |
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| Deficit |
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| Total |
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Six Months Ended June 30, 2025: |
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Balance at December 31, 2024 |
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Net income for six months ended June 30, 2025 |
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Amortization of value of employee stock options |
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Balance at June 30, 2025 |
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| $ |
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| $ | ( | ) |
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Three Months Ended June 30, 2025:
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| Accumulated |
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| Total |
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Balance at March 31, 2025 |
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Net income for three months ended June 30, 2025 |
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Amortization of value of employee stock options |
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Balance at June 30, 2025 |
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| $ |
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| Page 5 |
| Table of Contents |
Noble Roman's, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
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| Six months ended June 30, |
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OPERATING ACTIVITIES |
| 2025 |
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| 2026 |
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Net income |
| $ |
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| $ |
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Adjustments to reconcile net income to net cash Provided by operating activities: |
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Depreciation and amortization |
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Amortization of loan closing costs net of additions |
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Amortization of stock options |
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Deferred income taxes |
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Changes in operating assets and liabilities: |
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(Increase) decrease in: |
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Accounts receivable |
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Inventories |
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Prepaid expenses |
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Other assets |
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Decrease in operating lease assets |
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Decrease in operating lease liabilities |
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Increase (decrease) 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 IN INVESTING ACTIVITIES |
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FINANCING ACTIVITIES |
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Payment of principal on Corbel loan |
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Payment of subordinated notes payable |
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Purchase of all outstanding warrants |
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Exercise of warrant to buy stock |
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New Senior Loan net of cost of financing |
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NET CASH USED IN FINANCING ACTIVITIES |
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Increase (decrease) in cash |
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Cash at beginning of period |
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Cash at end of period |
| $ |
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Supplemental schedule of investing and financing activities |
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Cash paid for interest |
| $ |
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| $ |
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See accompanying notes to condensed consolidated financial statements (unaudited)
| Page 6 |
| Table of Contents |
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 - The accompanying unaudited interim condensed consolidated financial statements included herein, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated statements have been prepared in accordance with the Company’s accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in that report. Unless the context indicates otherwise, references to the “Company” mean Noble Roman’s, Inc. and its subsidiary.
In the opinion of the management of the Company, the information contained herein reflects all adjustments necessary for a fair presentation of the results of operations and cash flows for the interim periods presented and the financial condition as of the dates indicated, which adjustments are of a normal recurring nature. The results for the three-month and six-month periods ended June 30, 2026 are not necessarily indicative of the results to be expected for the full year ending December 31, 2026.
Recent Accounting Pronouncements
There have been no material changes to the Company's evaluation of recently issued accounting standards from those disclosed in Note 1, "Recently Adopted Accounting Standards" and “Recently Issued Accounting Standards Not Yet Adopted,” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Management continues to evaluate the impact of accounting standards that have been issued but are not yet effective and does not currently expect their adoption to have a material effect on the Company's condensed consolidated financial statements, unless otherwise disclosed.
Reclassification
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications primarily relate to the consolidation of certain financial statement line items to improve the presentation of the Company's interim financial statements. The reclassifications had no effect on previously reported total assets, total liabilities, stockholders' equity, net income (loss), or cash flows.
Restatements
There was a misclassification in salary in 2025 by posting salary expense to accounts payable in the amount of $
Significant Accounting Policies
There have been no significant changes in the Company's accounting policies from those disclosed in the 2025 Form 10-K.
| Page 7 |
| Table of Contents |
Note 2 – 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 June 30, 2026 and December 31, 2025 inventory consisted of the following:
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| As of 12/31/25 |
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| As of 6/30/26 |
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Ingredient inventory used to make products in company locations |
| $ |
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| $ |
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Marketing materials |
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Equipment inventory |
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Total |
| $ |
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| $ |
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Note 3 – Royalties and fees included initial franchise fees and transfer fees of $
At June 30, 2026, deferred contract income and deferred costs were $
At December 31, 2025 and June 30, 2026, the carrying values of the Company’s franchise receivables have been reduced to anticipated realizable value. After considering this reduction of carrying value, the Company anticipates that substantially all of its accounts receivable reflected on the consolidated balance sheet as of June 30, 2026, will be collected.
During the three-month and six-month periods ended June 30, 2026 there were no Company-operated or franchised Craft Pizza & Pub restaurants opened or closed. There were 18 new non-traditional outlets opened and two non-traditional outlets closed during the six-month period ended June 30, 2026.
Note 4 - On June 10, 2026, the Company entered into a Credit Agreement with Lake Forest Bank and Trust Company, N.A. for a new five-year term loan in the amount of $
| Page 8 |
| Table of Contents |
Note 5 - The following table sets forth the calculation of basic and diluted earnings per share for the three-month period ended June 30, 2026 and June 30, 2025:
|
| Three Months Ended June 30, 2026 |
| |||||||||
|
| Income (Numerator) |
|
| Shares (Denominator) |
|
| Per-Share Amount |
| |||
Net income |
| $ |
|
|
|
|
| $ | .01 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Stock option dilution |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ |
|
|
|
|
| $ | .01 |
| ||
|
| Three Months Ended June 30, 2025 |
| |||||||||
|
| Income (Numerator) |
|
| Shares (Denominator) |
|
| Per-Share Amount |
| |||
Net income |
| $ |
|
|
|
|
| $ |
| |||
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Stock option and warrant dilution |
|
|
|
|
|
|
|
|
|
|
| |
Convertible notes |
|
|
|
|
|
|
|
|
|
| ||
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ |
|
|
|
|
| $ |
| |||
The following table sets forth the calculation of basic and diluted earnings per share for the six-month periods ended June 30, 2026 and June 30, 2025:
|
| Six Months Ended June 30, 2026 |
| |||||||||
|
| Income (Numerator) |
|
| Shares (Denominator) |
|
| Per-Share Amount |
| |||
Net income |
| $ |
|
|
|
|
| $ |
| |||
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Stock dilution |
|
|
|
|
|
|
|
|
|
|
| |
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ |
|
|
|
|
| $ |
| |||
|
| Six Months Ended June 30, 2025 |
| |||||||||
|
| Income (Numerator) |
|
| Shares (Denominator) |
|
| Per-Share Amount |
| |||
Net income |
| $ |
|
|
|
|
| $ |
| |||
Effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
Stock option and warrant dilution |
|
|
|
|
|
|
|
|
|
|
| |
Convertible notes |
|
|
|
|
|
|
|
|
|
| ||
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ |
|
|
|
|
| $ |
| |||
| Page 9 |
| Table of Contents |
Note 6 - At June 30, 2026, the balance of the Senior Loan was comprised of:
Principal |
| $ |
| |
Unamortized Loan Closing Costs |
| $ | ( | ) |
Carrying Value |
| $ |
|
Note 7 – The Company, from time to time, 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 other than an employment agreement with each of the Executive Chairman & Chief Financial Officer and the President & Chief Executive Officer.
Note 8 – Deferred tax asset of $
Note 9 - There were no material changes to the Company’s operating lease arrangements during the three months and six months ended June 30, 2026. The Company continues to operate under operating leases for its corporate office and nine Craft Pizza & Pub locations, with a weighted-average remaining lease term of approximately
Note 10. The Company has reviewed all transactions to which the Company and 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. In June 2026, with the new financing the subordinated note owned by Paul Mobley in the amount of $
Note 11 – Stock-Based Compensation - The Company recognized stock-based compensation expense of $
There were no stock options granted while options to purchase
Note 12 – Segment Reporting - The Company accounts for segment reporting in accordance with Accounting Standards Codification (“ASC”) Topic No. 280/ASU 2023-07, 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.
Six-Month Period Ended June 30, 2026
|
| Franchising |
|
| Company-Owned Restaurants |
|
| Total |
| |||
Revenue |
| $ |
|
| $ |
|
| $ |
| |||
Administrative fees and other revenue |
|
|
|
|
|
|
|
|
| |||
Total revenue |
|
|
|
|
|
|
|
|
| |||
Segment operating expenses |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Segment contribution margin |
| $ |
|
| $ |
|
| $ |
| |||
Six-Month Period Ended June 30, 2025
|
| 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:
Six Month Ended June 30,
|
| 2026 |
|
| 2025 |
| ||
Total segment contribution margin |
| $ |
|
| $ |
| ||
General and administrative expenses |
|
| ( | ) |
|
| ( | ) |
Depreciation and amortization |
|
| ( | ) |
|
| ( | ) |
Operating income |
|
|
|
|
|
| ||
Interest expense |
|
| ( | ) |
|
| ( | ) |
Income (loss) before income taxes |
| $ |
|
| $ |
| ||
| Page 10 |
| Table of Contents |
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 and transfer fees are received upon execution of franchise agreements or transfer agreement. Because the initial franchise fee does not represent a separate performance obligation, the fee had formerly been 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. Since the Company lowered its upfront fee for non-traditional to significantly less than the money spent on each location prior to signing the franchise agreement, the Company is no longer deferring the upfront fee.
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.
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.
| Page 11 |
| Table of Contents |
Disaggregation of Revenue
The following table disaggregates revenue by major revenue source for the six-month periods ended June 30:
Revenue Source |
| 2026 |
|
| 2025 |
| ||
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 |
| $ |
|
| $ |
| ||
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.
For income and expense performance please refer to the margin statements on page 17 of this report.
| Page 12 |
| Table of Contents |
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 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 2017 as a Company-operated restaurant in a northern suburb of Indianapolis, Indiana. Between then and 2021 the Company opened a total of eight more Company-operated Craft Pizza & Pub locations. The Company-operated locations serve as the base for what it sees as a significant potential future growth opportunity, i.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 to 2020 franchisees opened three franchised locations. Today, in total, there are 12 Craft Pizza & Pub locations in operation, however an additional franchise location is under construction in Evansville, Indiana.
Noble Roman’s Pizza for Non-Traditional Locations
In 1997, the Company started franchising non-traditional locations (a Noble Roman’s pizza operation within some other host business or activity with existing traffic) such as entertainment facilities, hospitals, convenience stores and other types of facilities. Today the Company is focusing primarily on convenience stores and travel plazas for rapid expansion of its non-traditional franchises. These locations offer the two pizza styles the Company started with in 1972, along with its great tasting, high quality ingredients and menu extensions.
The hallmark of Noble Roman’s Pizza for non-traditional locations is “Superior quality that our customers can taste.” Every ingredient and process has been designed with a view to produce superior results.
| · | A fully-prepared pizza crust that captures the made-from-scratch pizzeria flavor which gets delivered to non-traditional locations in a shelf-stable condition so that dough handling is no longer an impediment to a consistent product, which otherwise is a challenge in non-traditional locations. |
| · | Fresh packed, uncondensed and never cooked sauce made with secret spices and vine-ripened tomatoes in all venues. |
| · | 100% real cheese blended from mozzarella and Muenster, with no additives or extenders. |
| · | 100% real meat toppings, with no soy additives or extenders, a distinction compared to many pizza concepts. |
| · | Vegetables (like onions and green peppers) and mushrooms for pizzas are sliced and delivered fresh, never canned. |
| · | An extended product line that includes breadsticks and cheesy stix with dip, pasta, baked sandwiches, salads, wings and a line of breakfast products. |
| · | The fully-prepared crust also forms the basis for the Company’s Take-N-Bake pizza for use as an add-on component for its non-traditional franchise and licensing base. |
Revenue from the franchising venue declined in 2021 and early 2022 due to the number of government-forced closures in an attempt to prevent the spread of COVID. The franchising section was made up of a number of franchises located in all types of entertainment facilities such as bowling centers and family entertainment centers. The regulations varied in different states but for the most part closing orders were in effect for two years after which most of those franchisees did not have the financial means of reopening.
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 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.
| Page 13 |
| Table of Contents |
Noble Roman’s Craft Pizza & Pub
The Noble Roman’s Craft Pizza & Pub format incorporates many of the basic elements first introduced in 1972 but in a modern atmosphere with up-to-date baking technology and equipment to maximize speed, enhance quality and perpetuate the taste customers love and expect from a Noble Roman’s.
The Noble Roman’s Craft Pizza & Pub provides for a selection of over 40 different toppings, cheeses and sauces from which to choose. Beer and wine also are featured, with 14 different beers on tap including both national and local craft selections. Wines include 12 affordably priced options by the bottle or glass in a range of varietals. Beer and wine service is provided at the bar and throughout the dining room.
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, salad bars were rolled out over time across all Company-operated restaurants.
Additional enhancements include a glass enclosed “Dough Room” where Noble Roman’s Dough Masters hand make all pizza and breadstick dough from scratch in customer view. Kids and adults enjoy Noble Roman’s self-serve root beer tap, which is also part of a special menu for customers 12 and younger. Throughout the dining room and the bar area there are many giant screen television monitors for sports and the nostalgic black and white shorts featured in Noble Roman’s since 1972.
The Company designed its curbside service for carry-out customers, called “Pizza Valet Service,” to create added value and convenience. With Pizza Valet Service, customers place orders ahead, drive into the restaurant’s reserved valet parking spaces and have their pizza run to their vehicle by specially uniformed pizza valets. Customers who pay when they place their orders are able to drive up and leave with their order very quickly without stepping out of their vehicle. For those who choose to pay after they arrive, pizza valets can take credit card payments on their mobile payment devices right at the customer’s vehicle. With the fast baking times, the entire experience, from order to pick-up can take as little as 12 minutes.
Business Strategy
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 specifically focusing on growth within the convenience store and travel plaza 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.
| Page 14 |
| Table of Contents |
The initial franchise fees for a Noble Roman’s Pizza non-traditional location or a Craft Pizza & Pub location are as follows:
|
| Non-Traditional |
|
| Traditional Stand-Alone |
| ||
Either a Noble Roman’s Pizza or Craft Pizza & Pub |
| $ | 2,750 |
|
| $ | 30,000 | (1) |
(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 is recognized as 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.
Business Operations
Distribution
The Company’s proprietary ingredients are manufactured pursuant to the Company’s specifications or recipes by third-party manufacturers under contracts between the Company and its various manufacturers. These contracts require the manufacturers to produce ingredients meeting the Company’s specifications and to sell them to Company-approved third-party distributors at prices negotiated between the Company and the manufacturer.
The Company has third-party distributors strategically located throughout the United States. The agreements require the distributors to maintain adequate inventories of all ingredients necessary to meet the needs of the Company’s franchisees in their distribution areas for weekly deliveries to the franchisee. Each of the primary distributors purchases the ingredients from the manufacturers at prices negotiated between the Company and the manufacturers, but under payment terms agreed upon by the manufacturers and the distributor, and distributes the ingredients to the franchisee at a price determined by the distributor agreement. Payment terms to the distributor are agreed upon between each franchisee and the respective distributor.
Financial Summary
The preparation of the consolidated financial statements in conformity with 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 may differ from those estimates. The Company periodically evaluates the carrying value of its assets, including property, equipment and related costs, accounts receivable and deferred tax assets, to assess whether any impairment indications are present. If any impairment of an individual asset is evident, a charge will be provided to reduce the carrying value to its estimated fair value.
| Page 15 |
| Table of Contents |
The following table sets forth the revenue, expense and margin contribution of the Company’s Craft Pizza & Pub venue and the percentage relationship to its revenue:
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| |||||||||||||||||||||||||||
Description |
| 2025 |
|
| 2026 |
|
| 2025 |
|
| 2026 |
| ||||||||||||||||||||
Revenue |
| $ | 2,324,459 |
|
|
| 100% |
| $ | 2,213,383 |
|
|
| 100% |
| $ | 4,343,877 |
|
|
| 100% |
| $ | 4,307,800 |
|
|
| 100% | ||||
Cost of sales |
|
| 479,606 |
|
|
| 20.6 |
|
|
| 457,728 |
|
|
| 20.7 |
|
|
| 895,873 |
|
|
| 20.6 |
|
|
| 863,690 |
|
|
| 20.0 |
|
Salaries and wages |
|
| 624,937 |
|
|
| 26.9 |
|
|
| 606,067 |
|
|
| 27.4 |
|
|
| 1,224,088 |
|
|
| 28.2 |
|
|
| 1,189,332 |
|
|
| 27.6 |
|
Facility cost including rent, common area and utilities |
|
| 417,342 |
|
|
| 17.9 |
|
|
| 438,441 |
|
|
| 19.8 |
|
|
| 828,886 |
|
|
| 19.1 |
|
|
| 871,696 |
|
|
| 20.2 |
|
Packaging |
|
| 76,518 |
|
|
| 3.3 |
|
|
| 74,964 |
|
|
| 3.4 |
|
|
| 144,219 |
|
|
| 3.3 |
|
|
| 145,066 |
|
|
| 3.4 |
|
Delivery fees |
|
| 41,079 |
|
|
| 1.8 |
|
|
| 70,589 |
|
|
| 3.2 |
|
|
| 105,201 |
|
|
| 2.4 |
|
|
| 170,527 |
|
|
| 4.0 |
|
All other operating expenses |
|
| 369,701 |
|
|
| 15.9 |
|
|
| 353,721 |
|
|
| 15.9 |
|
|
| 701,603 |
|
|
| 16.2 |
|
|
| 699,903 |
|
|
| 16.3 |
|
Total expenses |
|
| 2,009,183 |
|
|
| 86.4 |
|
|
| 2,001,510 |
|
|
| 90.4 |
|
|
| 3,899,870 |
|
|
| 89.8 |
|
|
| 3,940,214 |
|
|
| 91.5 |
|
Margin contribution |
| $ | 315,276 |
|
|
| 13.6% |
| $ | 211,873 |
|
|
| 9.6% |
| $ | 444,007 |
|
|
| 10.2% |
| $ | 367,586 |
|
|
| 8.5% | ||||
The following table sets forth the revenue, expense and margin contribution of the Company’s franchising activities and the percentage relationship to its revenue:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||||||||||||||||||
Description |
| 2025 |
|
| 2026 |
|
| 2025 |
|
| 2026 |
| ||||||||||||||||||||
Total royalties and fees revenue |
| $ | 1,454,251 |
|
|
| 100% |
| $ | 1,611,565 |
|
|
| 100% |
| $ | 2,900,159 |
|
|
| 100% |
| $ | 3,130,590 |
|
|
| 100% | ||||
Salaries and wages |
|
| 174,860 |
|
|
| 12.0 |
|
|
| 227,743 |
|
|
| 14.1 |
|
|
| 385,966 |
|
|
| 13.3 |
|
|
| 428,957 |
|
|
| 13.7 |
|
Franchise promotion |
|
| 29,221 |
|
|
| 2.0 |
|
|
| 40,782 |
|
|
| 2.5 |
|
|
| 89,221 |
|
|
| 3.1 |
|
|
| 80,920 |
|
|
| 2.6 |
|
Insurance |
|
| 87,774 |
|
|
| 6.0 |
|
|
| 81,700 |
|
|
| 5.1 |
|
|
| 175,009 |
|
|
| 6.0 |
|
|
| 156,913 |
|
|
| 5.0 |
|
Travel and auto |
|
| 22,296 |
|
|
| 1.5 |
|
|
| 31,561 |
|
|
| 2.0 |
|
|
| 55,681 |
|
|
| 1.9 |
|
|
| 57,986 |
|
|
| 1.9 |
|
All other operating expenses |
|
| 80,594 |
|
|
| 5.6 |
|
|
| 40,726 |
|
|
| 2.5 |
|
|
| 235,315 |
|
|
| 8.2 |
|
|
| 116,864 |
|
|
| 3.7 |
|
Total expenses |
|
| 394,745 |
|
|
| 27.1 |
|
|
| 422,512 |
|
|
| 26.2 |
|
|
| 941,192 |
|
|
| 32.5 |
|
|
| 841,640 |
|
|
| 26.9 |
|
Margin contribution |
| $ | 1,059,506 |
|
|
| 72.5% |
| $ | 1,189,053 |
|
|
| 73.8% |
| $ | 1,958,967 |
|
|
| 67.5% |
| $ | 2,288,950 |
|
|
| 73.1% | ||||
The following table sets forth the revenue, expense and margin contribution of the Company-owned non-traditional venue and the percentage relationship to its revenue:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||||||||||||||||||
Description |
| 2025 |
|
| 2026 |
|
| 2025 |
|
| 2026 |
| ||||||||||||||||||||
Revenue |
| $ | 295,025 |
|
|
| 100% |
| $ | 274,025 |
|
|
| 100% |
| $ | 589,598 |
|
|
| 100% |
| $ | 550,266 |
|
|
| 100% | ||||
Total expenses |
|
| 274,483 |
|
|
| 93.0 |
|
|
| 275,979 |
|
|
| 100.7 |
|
|
| 567,593 |
|
|
| 96.3 |
|
|
| 545,308 |
|
|
| 99.1 |
|
Margin contribution (loss) |
| $ | 20,542 |
|
|
| 7.0% |
| $ | (1,954 | ) |
|
| (.7)% |
| $ | 22,005 |
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| 3.7% |
| $ | 4,958 |
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| .9% | ||||
Results of Operations
Company-Owned Craft Pizza & Pub
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.
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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.
Franchising
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.
Company-Owned Non-Traditional Location
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.
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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.
Other Expenses
Depreciation and amortization expense was relatively unchanged for the three-month and six-month periods ended June 30, 2026, compared to comparable periods in 2025. Depreciation expense has remained mostly constant as a result of not opening any new corporate-owned locations in either 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.
Net income for the three-month and six-month periods ended June 30, 2026 was $190,620 and $311,390, respectively, after income tax accruals of $24,903 and $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 payable in cash because of the 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 $215,523 and $409,724 for the three-month and six-month periods ended June 30, 2026 compared to $404,973 and $490,037, respectively, for the comparable periods in 2025. The most significant change was interest expense, as discussed above.
Liquidity and Capital Resources
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.
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In view of the financing, as described 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. 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 Financial Accounting Standards Board will have a material impact on its consolidated financial statements.
Forward-Looking 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, the emergence or spread of human or animal pandemics (such as COVID-19 or the Avian Bird Flu), non-renewal of franchise agreements or contemplated openings 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.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
The Company’s exposure to interest rate risk relates primarily to its variable-rate debt. As of June 30, 2026, the Company had outstanding variable interest-bearing debt in the aggregate principal amount of $6.9 million. The Company’s current borrowings, as of June 30, 2026, are at a variable rate tied to SOFR plus 4.0% per annum adjusted on a monthly basis. Based on its current debt structure, for each 1% increase in SOFR the Company would incur increased interest expense of approximately $65,000 over the succeeding 12-month period.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2026. Based on that evaluation, management concluded that the Company's disclosure controls and procedures were not effective because the material weakness in internal control over financial reporting previously disclosed in the Company's 2025 Form 10-K had not been remediated as of June 30, 2026. Notwithstanding the material weakness, management believes that the condensed consolidated financial statements included in this Form 10-Q fairly present, in all material respects, the Company's financial position, results of operations and cash flows in conformity with U.S. GAAP.
Remediation of Material Weakness
The previously identified material weakness relates primarily to deficiencies in the Company's financial reporting and period-end close process, including the timely preparation, reconciliation, documentation and review of certain account balances and financial reporting matters.Management continued remediation efforts during the quarter ended June 30, 2026. However, the enhanced controls had not operated for a sufficient period to conclude that the material weakness had been remediated. Management will continue its remediation efforts and evaluate the effectiveness of the enhanced controls.
Changes in Internal Control Over Financial Reporting
Except for the remediation activities described above, there were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
The Company is not involved in material litigation against it.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
ITEM 5. Other Information.
Not applicable.
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ITEM 6. Exhibits.
Index to Exhibits
Exhibit Number |
| Description |
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3.1 |
| Amended Articles of Incorporation of the Registrant, filed as an exhibit to the Registrant’s Amendment No. 1 to the Post-Effective Amendment No. 2 to Registration Statement on Form S-1 filed July 1, 1985 (SEC File No.2-84150), is incorporated herein by reference. |
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3.3 |
| Articles of Amendment of the Articles of Incorporation of the Registrant effective February 18, 1992 filed as an exhibit to the Registrant’s Registration Statement on Form SB-2 (SEC File No. 33-66850), ordered effective on October 26, 1993, is incorporated herein by reference. |
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4.1 |
| Description of Registered Securities, dated May 11, 2022, filed as Exhibit 4.1 to the Registrant’s Form 10-Q, is incorporated herein by reference. |
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4.2 |
| Specimen Common Stock Certificates filed as an exhibit to the Registrant’s Registration Statement on Form S-18 filed October 22, 1982 and ordered effective on December 14, 1982 (SEC File No. 2-79963C), is incorporated herein by reference. |
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21.1 |
| Subsidiaries of the Registrant filed in the Registrant’s Registration Statement on Form SB-2 (SEC File No. 33-66850) ordered effective on October 26, 1993, is incorporated herein by reference. |
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101 |
| Interactive Financial Data |
*Management contract or compensation plan.
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SIGNATURES
Pursuant to the requirements 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: August 12, 2026 | By | /s/ Paul W. Mobley | |
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| Paul W. Mobley, Executive Chairman, Chief Financial Officer and Principal Accounting Officer (Authorized Officer and Principal Financial Officer) | |
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