8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 9, 2023

NOBLE ROMAN’S, INC.

(Exact name of Registrant as specified in its charter)

Indiana	0-11104	35-1281154
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

6612 E. 75th Street, Suite 450 Indianapolis, Indiana	46250
(Address of principal executive offices)	(Zip Code)

(317) 634-3377

(Company's telephone number, including area code)

Not applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging Growth Company ☐

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 9, 2023, Noble Roman’s, Inc. (the “Company”) issued a press release announcing its second quarter 2023 financial results. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.02.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information and Exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 – Financial Statements and Exhibits.

(d) The following exhibits are filed as part of this report:

Exhibit Number	Description
99.1	Noble Roman’s, Inc. Press Release dated August 9, 2023

*            *          *

2

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 hereunto duly authorized.

Dated: August 9, 2023

NOBLE ROMAN’S, INC.
By:	/s/  Paul W. Mobley
	Paul W. Mobley
	Executive Chairman and Chief Financial Officer

3

EX-99.1

EXHIBIT 99.1

NEWS BULLETIN RE: NOBLE ROMAN'S, INC.

6612 E. 75th Street, Suite 450

Indianapolis, IN  46250

FOR ADDITIONAL INFORMATION, CONTACT:

For Media Information: Scott Mobley, President & CEO (smobley@nobleromans.com)

For Investor Relations: Paul Mobley, Executive Chairman (pmobley@nobleromans.com)

  Mike Cole, Investor Relations: 949-444-1341 (mike.cole@armaadvisoryservices.com)

Noble Roman’s Announces 2nd Quarter 2023 Financial Results

(Indianapolis, Indiana) – August 9, 2022 - Noble Roman's, Inc. (OTCQB: NROM), the Indianapolis based franchisor and licensor of Noble Roman’s Pizza and Noble Roman’s Craft Pizza & Pub (“CPP”), today announced financial results for the second quarter 2023 and growth in franchising in the non-traditional venue. 

The company reported a net income of $326,000, or $.02 per share, and $1.2 million, or $.05 per share, for the three-month and six-month periods ended June 30, 2023 compared to a net loss of $50,000 and $187,000 for the comparable periods in 2022.  The net income for the three-month period largely reflected growth in the franchising venue and was unaffected by the Employee Retention Tax Credit refund.  However, since that credit was recorded in the first quarter it is reflected in the results for the six month period.

The company generated approximately $539,000 in net cash from operating activities for the three months ended June 30, 2023 compared to approximately $151,000 for the comparable period in 2022.

Total revenue for the three-month and six-month periods ended June 30, 2023 was $4.0 million and $7.3 million, respectively, compared to $3.7 million and $7.2 million for the comparable periods in 2022.  Franchising revenue for the three-month and six-month periods ended June 30, 2023 was $1.4 million and $2.4 million, respectively, compared to $1.1 million and $2.1 million in the comparable periods in 2022.  Company-owned Craft Pizza & Pub (CPP) revenue for the three-month and six-month periods ended June 30, 2023 was $2.4 million and $4.5 million, respectively, compared to $2.5 million and $4.8 million for the comparable periods in 2022.  The revenue for the periods in 2022 reflected relatively higher, grand-opening sales from a few locations that opened late in the previous year, which disrupts their comparability.

The company-owned CPP locations continued to exhibit very favorable results with margin contribution of 14.7% and 11.8%, respectively, in the three-month and six-month periods ended June 30, 2023 compared to 13.6% and 11.8%, respectively, for the comparable periods in 2022. This is despite considerable inflationary pressure on ingredients and labor over the last year.

Results from the company’s franchising venue have seen a significant increase in both revenue and margins.  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 look at expansion options and a willingness to invest in their growth.  With the sales efforts in the first six months of this year the company generated 43 new franchised units available for opening.  During the first six months of 2023, the company opened 22 new locations with the remaining balance of the locations sold and not yet open in various stages of development to be opened.  In addition, the company has a significant pipeline of leads and prospects for future non-traditional franchise sales.  The company believes this growth points to an attractive opportunity for the coming months as the remaining new units already sold become open and given the number of interested prospects for future franchise sales that the company has identified.

Scott Mobley, the company’s President & CEO, stated, “As we announced earlier in the year, several initiatives were implemented in both the non-traditional and Craft Pizza & Pub venues.  It is rewarding to see that these efforts have paid off throughout the second quarter.  Having negotiated through the extremely difficult operating environment during the COVID and post-COVID periods, the company focused more of its resources on non-traditional franchising efforts as well as continuing to tightly control corporate level overhead expense.”

The following table sets forth the revenue, expense and margin contribution of the company's Craft Pizza & Pub venue and the percent relationship to its revenue:

	Three months ended June 30,								Six months ended June 30,
Description	2022				2023				2022				2023
Revenue	$	2,503,363	100	%	$	2,373,652	100	%	$	4,786,960	100	%	$	4,463,994	100	%
Cost of sales		523,135	20.9			476,942	20.1			993,408	20.8			928,300	20.8
Salaries and wages		720,537	28.6			652,905	27.5			1,443,494	30.2			1,270,369	28.5
Facility cost including rent, common area and utilities		406,536	16.2			405,768	17.1			800,233	16.7			810,592	18.2
Packaging		85,005	3.4			77,080	3.2			165,743	3.5			149,108	3.3
Delivery fees		39,423	1.6			29,095	1.2			76,347	1.6			60,217	1.3
All other operating expenses		388,253	15.5			383,402	16.1			742,193	15.5			721,428	16.2
Total expenses		2,162,889	86.4			2,025,192	85.3			4,221,418	88.2			3,940,014	88.3
Margin contribution	$	340,474	13.6	%	$	348,460	14.7	%	$	565,542	11.8	%	$	523,980	11.7	%

The following table sets forth the revenue, expense and margin contribution of the company's franchising venue and the percent relationship to its revenue:

	Three months ended June 30,								Six months ended June 30,
Description	2022				2023				2022				2023
Total royalties and fees revenue	$	1,064,363	100	%	$	1,373,533	100	%	$	2,098,607	100	%	$	2,360,876		100	%
Salaries and wages		216,658	20.4			207,604	15.1			410,254	19.6			430,062		18.2
Trade show expense		45,000	4.2			50,920	3.7			135,000	6.4			141,120		6.0
Insurance		99,431	9.3			78,711	5.7			195,281	9.3			169,886		7.2
Travel and auto		40,002	3.8			26,019	1.9			58,809	2.8			58,149		2.5
All other operating expenses (benefit)		82,149	7.7			70,874	5.2			145,251	6.9			(1,234,035	)(1)	(52.3	)
Total expenses		483,240	45.4			434,128	31.6			944,595	45.0			(434,818	)	(18.4	)
Margin contribution	$	581,123	54.6	%	$	939,405	68.4	%	$	1,154,012	55.0	%	$	2,795,693		118.4	%

(1) See Note 1 to the Company’s condensed consolidated financial statements for a discussion of the ERTC, which substantially reduced operating expenses in the first quarter of 2023 but had no effect on the second quarter.

The following table sets forth the revenue, expense and margin contribution of the company-owned non-traditional venue and the percent relationship to its revenue:

	Three months ended June 30,								Six months ended June 30,
Description	2022				2023				2022				2023
Revenue(1)	$	177,115	100	%	$	236,585	100	%	$	310,244	100	%	$	459,965	100	%
Total expenses		169,750	95.8			204,150	86.3			302,626	97.5			325,980	70.9
Margin contribution	$	7,365	4.2	%	$	32,434	13.7	%	$	7,618	2.5	%	$	133,985	29.1	%

(1)	The significant increase in revenue was primarily the result of the hospital releasing most of its pandemic restrictions by allowing employees and guests to travel throughout the hospital.
(2)	See Note 1 to the Company’s condensed consolidated financial statements for a discussion of the ERTC, which substantially reduced operating expenses in the first quarter of 2023. Total expenses were reduced by $83,177 as a result of recording the ERTC in the first quarter of 2023 but had no effect on the second quarter.

Other Expenses

Depreciation and amortization expense were $95,517 and $191,033 for the three-month and six-month periods ended June 30, 2023 compared to $112,687 and $225,439 for the comparable periods in 2022, respectively.  The decrease in depreciation expense was the result of not opening any new corporate-owned locations to date in 2023.

General and administrative expenses were $526,000 and $1,045,000 for the three-month and six-month periods ended June 30, 2023, compared to $540,000 and $1,080,000 for the comparable periods in 2022, respectively.  This reflects the Company’s focus on minimizing costs while growing revenue through franchising.

Operating income was $704,361 and $2,230,109 for the three-month and six-month periods ended June 30, 2023 compared to $281,584 and $440,727 for the comparable periods in 2022, respectively.  The increase in the second quarter of 2023 over 2022 was a result of growth in the franchising venue while maintaining Craft Pizza & Pub profitability while and keeping overall expenses under control. The six-month period results also benefited from the recognition of the ERTC of $1.46 million in the first quarter of 2023.

Interest expense was $379,000 and $762,000 for the three-month and six-month periods ended June 30, 2023 compared to $348,000 and $690,000 for the comparable periods in 2022, respectively.  The primary reason for the increase in both periods was non-cash PIK interest which adds to the principal amount of the Corbel loan outstanding, however that is now being offset by a principal payment each month of $83,333, plus an application of a portion of the ERTC reimbursement received to the early retirement of a portion of the long-term debt.

A significant improvement in net cash provided by operating activities was approximately $539,000 in the three-month period ended June 30, 2023 compared to approximately $151,000 in the comparable period in 2022.

The Company’s current ratio was 1.84-to-1 as of June 30, 2023, compared to 1.3-to-1 as of December 31, 2022.   

BT Brands, Inc. (“BT Brands”) purported to nominate Gary Copperud for election as a Class III director at the annual meeting in opposition to A. Scott Mobley, President and Chief Executive Officer of Noble Roman’s. Mr. Mobley has been nominated and unanimously endorsed by the Board of Directors.  The Company advised BT Brands that its nominee was disqualified because it was not a shareholders of record at the date it submitted its nomination under the Company’s Bylaws. The shareholders may receive proxy solicitation materials from BT Brands including a proxy statement and proxy card.  The Board of Directors of the Company recommends to the shareholders that they not return the proxy card.  The Company is not responsible for the accuracy of any information provided by or relating to BT Brands contained in any proxy solicitation materials filed or disseminated by, or on behalf of, BT Brands or any other statements that BT Brands or its representatives may have made or otherwise make.  The Board, including all of its independent directors, strongly urges the shareholders NOT to sign or return any proxy card sent to them by or on behalf of BT Brands. On August 3, 2023, BT Brands filed a lawsuit in Federal court in Indianapolis alleging its purported nominee had been wrongfully disqualified and the Company had failed to comply with appliable proxy rules, and seeking various relief against the Company and its Board of Directors. The Company believes the lawsuit is entirely without merit and will defend the claims vigorously.

The statements contained in this press release concerning the Company’s future revenues, profitability, financial resources, 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 the effects of the COVID-19 pandemic and its aftermath, competitive factors and pricing and cost pressures, non-renewal of franchise agreements, shifts in market demand, the success of franchise programs, including the Noble Roman’s Craft Pizza & Pub format, the Company’s ability to successfully operate an increased number of Company-owned restaurants, the outcome of the election of directors at the Company’s 2023 annual meeting of shareholders (as discussed under “Part II-Other Information”), general economic conditions, changes in demand for the Company’s products or franchises, the Company’s ability to service its loans, the acceptance of the amended federal Form 941 returns relating to the ERTC, 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 the resolution of litigation arising out of a dispute with a third party purporting to nominate a candidate for director at the 2023 annual meeting, as well as the factors discussed under “Risk Factors” contained in this Company’s Annual Report on Form 10-K for the year ended December 31, 2022.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended.   If activist stockholder activities ensue, our business could be adversely impacted.

-END-

Noble Roman’s, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

Assets	December 31, 2022			June 30, 2023
Current assets:
Cash	$	785,522		$	685,977
Employee Retention Tax Credit Receivable		-			1,460,444
Accounts receivable - net		824,091			805,924
Inventories		997,868			1,005,265
Prepaid expenses		424,822			410,710
Total current assets		3,032,303			4,368,320
Property and equipment:
Equipment		4,351,558			4,363,377
Leasehold improvements		3,116,030			3,127,880
Construction and equipment in progress		63,097			68,858
		7,530,685			7,560,115
Less accumulated depreciation and amortization		2,817,477			3,008,510
Net property and equipment		4,713,208			4,551,605
Deferred tax asset		3,374,841			3,100,651
Deferred contract cost		934,036			943,109
Goodwill		278,466			278,466
Operating lease right of use assets		5,660,155			5,305,701
Other assets including long-term portion of receivables-net		350,189			389,641
Total assets	$	18,343,198		$	18,937,493
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	650,582		$	572,081
Current portion of operating lease liability		799,164			799,164
Current portion of Corbel loan payable		866,667			1,000,000
Total current liabilities		2,316,413			2,371,245
Long-term obligations:
Term loan payable to Corbel		7,470,900			7,190,510
Corbel warrant value		29,037			29,037
Convertible notes payable		622,864			575,000
Operating lease liabilities - net of short-term portion		5,103,286			4,755,296
Deferred contract income		934,036			943,109
Total long-term liabilities		14,160,123			13,492,952
Stockholders’ equity:
Common stock – no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2022 and as of June 30, 2023)		24,819,736			24,832,525
Accumulated deficit		(22,953,074	)		(21,759,227	)
Total stockholders’ equity		1,866,662			3,073,298
Total liabilities and stockholders’ equity	$	18,343,198		$	18,937,495

Noble Roman’s, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended June 30,					Six months ended June 30,
	2022			2023		2022			2023
Revenue:
Restaurant revenue – company-owned Craft Pizza & Pub	$	2,503,363		$	2,373,652	$	4,786,960		$	4,463,994
Restaurant revenue –company-owned non-traditional		177,115			236,585		310,244			459,965
Franchising revenue		1,064,363			1,373,533		2,098,608			2,360,875
Administrative fees and other		5,051			8,674		19,267			15,413
Total revenue		3,749,892			3,992,444		7,215,079			7,300,247
Operating expenses:
Restaurant expenses – company-owned  Craft Pizza & Pub		2,162,889			2,025,193		4,221,418			3,940,014
Restaurant expenses – company-owned  non-traditional		169,750			204,150		302,626			325,980
Franchising expenses (benefit)		483,240			436,914		944,595			(432,031	)
Total operating expenses		2,815,879			2,666,257		5,468,639			3,833,963
Depreciation and amortization		112,687			95,517		225,439			191,033
General and administrative expenses		539,742			526,309		1,080,274			1,045,140
Total expenses		3,468,308			3,288,083		6,774,352			5,070,136
Operating income		281,584			704,361		440,727			2,230,111
Interest expense		347,717			378,785		689,597			762,074
Income (loss) before income taxes		(66,133	)		325,576		(248,870	)		1,468,037
Income tax (benefit)		(15,872	)		-		(61,913	)		274,190
Net income (loss)	$	(50,261	)	$	325,576	$	(186,957	)	$	1,193,847
Earnings per share – basic:
Net income (loss)	$	.00		$	.02	$	(.01	)	$	.05
Weighted average number of common shares outstanding		22,215,512			22,215,512		22,215,512			22,215,512
Diluted earnings (loss) per share:
Net income (loss)	$	.00		$	.01	$	(.01	)	$	.05
Weighted average number of common shares outstanding		23,579,118			23,498,764		23,579,118			23,498,764

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Cover	Aug. 09, 2023
Cover [Abstract]
Entity Registrant Name	NOBLE ROMAN’S, INC.
Entity Central Index Key	0000709005
Document Type	8-K
Amendment Flag	false
Entity Emerging Growth Company	false
Document Period End Date	Aug. 09, 2023
Entity Incorporation State Country Code	IN
Entity File Number	0-11104
Entity Tax Identification Number	35-1281154
Entity Address Address Line 1	6612 E
Entity Address Address Line 2	75th Street
Entity Address Address Line 3	Suite 450
Entity Address City Or Town	Indianapolis
Entity Address State Or Province	IN
Entity Address Postal Zip Code	46250
City Area Code	317
Local Phone Number	634-3377
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false