{"url_path":"/sec/nrom/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-08","source_url":"https://www.sec.gov/Archives/edgar/data/709005/0001654954-26-005747-index.html","accession_number":"0001654954-26-005747","cik":"0000709005","ticker":"NROM","issuer_name":"NOBLE ROMANS INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/709005/0001654954-26-005747-index.html","primary_entity_key":"0000709005","primary_entity_name":"NOBLE ROMANS INC"},"word_count":10772,"has_tables":true,"body_markdown":"**ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**\n\n \n\n**Consolidated Balance Sheets**\n\n**Noble Roman’s, Inc. and Subsidiaries**\n\n                                                                                                                              \n\n \n\n \n\n **December 31,**\n\n** **\n\n**Assets**\n\n** **\n\n**2024**\n\n** **\n\n** **\n\n**2025**\n\n \n\nCurrent assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash\n\n \n$710,227\n \n\n \n$533,670\n \n\nEmployee Retention Tax Credit receivable\n\n \n\n \n507,726\n \n\n \n\n \n527,948\n \n\nAccounts receivable - net\n\n \n\n \n586,554\n \n\n \n\n \n741,539\n \n\nInventories\n\n \n\n \n986,975\n \n\n \n\n \n965,212\n \n\nPrepaid expenses\n\n \n\n \n194,902\n \n\n \n\n \n478,262\n \n\nTotal current assets\n\n \n\n \n2,986,384\n \n\n \n\n \n3,246,631\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty and equipment:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEquipment\n\n \n\n \n4,349,205\n \n\n \n\n \n4,463,379\n \n\nLeasehold improvements\n\n \n\n \n3,142,591\n \n\n \n\n \n3,175,507\n \n\n \n\n \n\n \n7,491,796\n \n\n \n\n \n7,638,886\n \n\nLess accumulated depreciation and amortization\n\n \n\n \n3,583,276\n \n\n \n\n \n3,979,112\n \n\nNet property and equipment\n\n \n\n \n3,908,520\n \n\n \n\n \n3,659,774\n \n\nDeferred tax asset\n\n \n\n \n3,532,199\n \n\n \n\n \n3,114,727\n \n\nDeferred contract costs\n\n \n\n \n1,604,952\n \n\n \n\n \n1,699,935\n \n\nGoodwill\n\n \n\n \n278,466\n \n\n \n\n \n278,466\n \n\nOperating lease right of use assets\n\n \n\n \n4,154,804\n \n\n \n\n \n3,332,195\n \n\nOther assets\n\n \n\n \n303,922\n \n\n \n\n \n562,756\n \n\nTotal assets\n\n \n$16,769,247\n \n\n \n$15,894,484\n \n\n**Liabilities and Stockholders’ Equity**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable and accrued expenses\n\n \n$840,848\n \n\n \n$702,207\n \n\nCurrent portion of operating lease liability\n\n \n\n \n870,140\n \n\n \n\n \n950,409\n \n\nCurrent portion of Corbel loan payable\n\n \n\n \n1,066,668\n \n\n \n\n \n5,470,824\n \n\nConvertible subordinated notes\n\n \n\n \n0\n \n\n \n\n \n575,000\n \n\nWarrant liability\n\n \n\n \n538,822\n \n\n \n\n \n500,000\n \n\nTotal current liabilities\n\n \n\n \n3,316,478\n \n\n \n\n \n8,198,440\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLong-term obligations:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nLoan payable to Corbel net of current portion\n\n \n\n \n5,551,738\n \n\n \n\n \n-\n \n\nConvertible notes payable\n\n \n\n \n575,000\n \n\n \n\n \n-\n \n\nOperating lease liabilities – net of current portion\n\n \n\n \n3,505,718\n \n\n \n\n \n2,564,162\n \n\nDeferred contract income\n\n \n\n \n1,604,952\n \n\n \n\n \n1,699,934\n \n\nTotal long-term liabilities\n\n \n\n \n11,237,408\n \n\n \n\n \n4,264,096\n \n\nTotal liabilities\n\n \n$14,553,886\n \n\n \n$12,462,536\n \n\nSee Note 12 regarding Contingencies\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStockholders’ equity:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCommon Stock – no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2024 and December 31, 2025)\n\n \n\n \n24,867,778\n \n\n \n\n \n24,911,141\n \n\nAccumulated deficit\n\n \n\n \n(22,652,417)\n \n\n \n(21,479,193)\n\nTotal stockholders’ equity\n\n \n\n \n2,215,361\n \n\n \n\n \n3,431,948\n \n\nTotal liabilities and stockholders’ equity\n\n \n$16,769,247\n \n\n \n$15,894,484\n \n\n \n\n*See accompanying notes to consolidated financial statements.*\n\n \n\n \n\nF-1\n\n*Table of Contents*\n\n \n\n**Consolidated Statements of Operations**\n\n**Noble Roman’s, Inc. and Subsidiaries**\n\n \n\n \n\n \n\n**Year Ended December 31,**\n\n** **\n\n** **\n\n** **\n\n**2024**\n\n** **\n\n** **\n\n**2025**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRestaurant revenue - company-owned restaurants\n\n \n$8,577,148\n \n\n \n$8,771,389\n \n\nRestaurant revenue - company-owned non-traditional\n\n \n\n \n953,574\n \n\n \n\n \n1,205,657\n \n\nFranchising revenue\n\n \n\n \n5,540,968\n \n\n \n\n \n6,213,917\n \n\nAdministrative fees and other\n\n \n\n \n77,910\n \n\n \n\n \n270,496\n \n\nTotal revenue\n\n \n\n \n15,149,600\n \n\n \n\n \n16,461,459\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating expenses:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRestaurant expenses - company-owned restaurants\n\n \n\n \n7,793,798\n \n\n \n\n \n7,884,994\n \n\nRestaurant expenses - company-owned non-traditional\n\n \n\n \n1,000,646\n \n\n \n\n \n1,262,804\n \n\nFranchising expenses\n\n \n\n \n1,703,136\n \n\n \n\n \n1,709,258\n \n\nTotal operating expenses\n\n \n\n \n10,497,580\n \n\n \n\n \n10,857,056\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation and amortization\n\n \n\n \n499,648\n \n\n \n\n \n392,948\n \n\nGeneral and administrative\n\n \n\n \n2,677,334\n \n\n \n\n \n2,336,422\n \n\nCost of new warrants issued\n\n \n\n \n\n -\n\n \n\n \n\n \n\n 469,542\n\n \n\nTotal expenses\n\n \n\n \n13,674,562\n \n\n \n\n \n14,055,968\n \n\nOperating income\n\n \n\n \n1,475,038\n \n\n \n\n \n2,405,491\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest expense\n\n \n\n \n1,637,398\n \n\n \n\n \n1,336,773\n \n\nNet change in warrant-related earnings effect\n\n \n\n \n(1,828)\n \n\n \n(521,978)\n\nNet (loss) income before income taxes\n\n \n\n \n(160,532)\n \n\n \n1,590,696\n \n\nIncome tax (benefit) expense\n\n \n\n \n(157,358)\n \n\n \n417,472\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet (loss) income\n\n \n$(3,174)\n \n$1,173,224\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIncome per share - basic:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n$0.00\n \n\n \n$0.05\n \n\nNumber of common shares outstanding\n\n \n\n \n22,215,512\n \n\n \n\n \n22,215,512\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDiluted (loss) income per share:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet (loss) income\n\n \n$0.00\n \n\n \n$0.04\n \n\nNumber of diluted common shares outstanding\n\n \n\n \n23,910,256\n \n\n \n\n \n32,079,346\n \n\n \n\n*See accompanying notes to consolidated financial statements.*\n\n \n\n \n\nF-2\n\n*Table of Contents*\n\n \n\n \n\n**Consolidated Statements of Changes in**\n\n**Stockholders’ Equity**\n\n**Noble Roman’s, Inc. and Subsidiaries**\n\n \n\n \n\n \n\n**Shares**\n\n \n\n \n\n**Amount**\n\n**Common Stock**\n\n**No Par Value**\n\n \n\n \n\n**Accumulated**\n\n**Deficit**\n\n \n\n \n\n**Total**\n\n \n\n**Balance at December 31, 2023**\n\n \n\n \n22,215,512\n \n\n \n$24,840,126\n \n\n \n$(22,649,243)\n \n$2,190,883\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2024 net loss\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n(3,174)\n \n\n \n(3,174)\n\nAmortization of value of stock options\n\n \n\n \n\n \n\n \n\n \n\n \n27,652\n \n\n \n\n \n\n \n\n \n\n \n\n \n27,652\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance at December 31, 2024**\n\n \n\n \n22,215,512\n \n\n \n$24,867,778\n \n\n \n$(22,652,417)\n \n$2,215,361\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2025 net income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n1,173,224\n \n\n \n\n \n1,173,224\n \n\nAmortization of value of stock options\n\n \n\n \n\n \n\n \n\n \n\n \n43,363\n \n\n \n\n \n\n \n\n \n\n \n\n \n43,363\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n**Balance at December 31, 2025**\n\n \n\n \n22,215,512\n \n\n \n\n \n24,911,141\n \n\n \n$(21,479,193)\n \n$3,431,948\n \n\n \n\n*See accompanying notes to consolidated financial statements.*\n\n \n\n \n\nF-3\n\n*Table of Contents*\n\n \n\n**Consolidated Statements of Cash Flows**\n\n**Noble Roman’s, Inc. and Subsidiaries**\n\n \n\n \n\n \n\n**Year ended December 31,**\n\n \n\nOPERATING ACTIVITIES\n\n \n\n**2024**\n\n \n\n \n\n**2025**\n\n \n\nNet (loss) income\n\n \n$(3,174)\n \n$1,173,224\n \n\nAdjustments to reconcile net (loss) income to net cash provided by operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDeferred income taxes\n\n \n\n \n(157,358)\n \n\n \n417,473\n \n\nAmortization of stock options\n\n \n\n \n27,652\n \n\n \n\n \n43,363\n \n\nChange in warrant-related earnings effect\n\n \n\n \n(1,828)\n \n\n \n(521,978)\n\nCapitalization of PIK interest and expenses\n\n \n\n \n\n \n\n \n\n \n\n \n188,183\n \n\nDepreciation and amortization\n\n \n\n \n499,648\n \n\n \n\n \n392,948\n \n\nAllowance for credit losses\n\n \n\n \n\n \n\n \n\n \n\n \n220,476\n \n\nAmortization of operating lease asset\n\n \n\n \n774,584\n \n\n \n\n \n822,609\n \n\nAmortization of loan closing costs and payment in-kind interest expense\n\n \n\n \n428,018\n \n\n \n\n \n424,641\n \n\nDeferred contract revenue\n\n \n\n \n(27,653)\n \n\n \n94,983\n \n\nDeferred contract cost\n\n \n\n \n(201,653)\n \n\n \n(94,983)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nChanges in operating assets and liabilities\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n(Increase) decrease in:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts receivable and employee retention tax credit receivable\n\n \n\n \n582,892\n \n\n \n\n \n(395,683)\n\nInventories\n\n \n\n \n(21,156)\n \n\n \n21,763\n \n\nPrepaid expenses\n\n \n\n \n123,293\n \n\n \n\n \n(283,359)\n\nOperating lease liabilities\n\n \n\n \n(802,232)\n \n\n \n(861,287)\n\nOther assets including long-term portion of accounts receivable\n\n \n\n \n35,895\n \n\n \n\n \n(258,834)\n\nIncrease in:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAccounts payable and accrued expenses\n\n \n\n \n(443,329)\n \n\n \n(138,644)\n\nNET CASH PROVIDED BY OPERATING ACTIVITIES\n\n \n\n \n813,599\n \n\n \n\n \n1,244,895\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nINVESTING ACTIVITIES\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchase of property and equipment\n\n \n\n \n(88,301)\n \n\n \n(144,201)\n\nNET CASH USED BY INVESTING ACTIVITIES\n\n \n\n \n(88,301)\n \n\n \n(144,201)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFINANCING ACTIVITIES\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPrincipal payments on Corbel loan payable and additional debt discount\n\n \n\n \n(887,406)\n \n\n \n(1,277,251)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNET CASH USED BY FINANCING ACTIVITIES\n\n \n\n \n(887,406)\n \n\n \n(1,277,251)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDecrease in cash\n\n \n\n \n(162,108)\n \n\n \n(176,557)\n\nCash at beginning of year\n\n \n\n \n872,335\n \n\n \n\n \n710,227\n \n\nCash at end of year\n\n \n$710,227\n \n\n \n$533,670\n \n\n \n\n**Supplemental Schedule of Non-Cash Investing and Financing Activities:**\n\n \n\nNone.\n\nCash interest paid in 2024 was $1.17 million.  No income taxes were paid in 2024.\n\nCash interest paid in 2025 was $.91 million.  No income taxes were paid in 2025.\n\n \n\n*See accompanying notes to consolidated financial statements.*\n\n \n\n \n\nF-4\n\n*Table of Contents*\n\n \n\n**Notes to Consolidated Financial Statements**\n\n**Noble Roman’s, Inc. and Subsidiaries**\n\n**December 31, 2025 and 2024    **\n\n \n\n**Note l:  Summary of Significant Accounting Policies**\n\n \n\nOrganization:  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.\n\n \n\nPrinciples 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.\n\n \n\nInventories:  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.\n\n \n\nProperty 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. \n\n \n\nFranchise 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. \n\n \n\nLeases:  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.\n\n \n\nDeferred 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.\n\n \n\nCash: Includes actual cash balance.  There are not any withdrawal restrictions.\n\n \n\nAccounts Receivable and Allowance for Credit Losses\n\n \n\n \n\nF-5\n\n*Table of Contents*\n\n \n\nThe Company accounts for expected credit losses in accordance with ASC Topic 326, Financial Instruments – Credit Losses.\n\n \n\nThe 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.\n\n \n\nThe Company's receivables consist primarily of franchise royalties, manufacturer allowances, distributor allowances, equipment commissions, and other franchise-related receivables.\n\n \n\nManagement 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.\n\n \n\nBased 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 $231,000 as of December 31, 2025. No allowance for expected credit losses was recorded as of December 31, 2024.\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nThe 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 $741,539 on December 31, 2025.  Total revenue recognized as income in 2025 from this category was $6.2 million.  These receivables at both the beginning and end of 2025 all relate directly or indirectly to the revenue stream consisting of royalties, manufacturing allowances, distributor allowances and some legal costs related to enforcing franchising agreements which are to be reimbursed by the franchisee in accordance with the franchise agreements.\n\n \n\n \n\nF-6\n\n*Table of Contents*\n\n \n\nAdvertising 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.\n\n \n\nFair 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:\n\n \n\nLevel One: Quoted market prices in active markets for identical assets or liabilities.\n\n \n\nLevel Two: Observable market–based inputs or unobservable inputs that are corroborated by market data.\n\n \n\nLevel Three: Unobservable inputs that are not corroborated by market data.\n\n \n\nUse 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.\n\n \n\nDebt 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 $382,000. and $143,349.\n\n \n\n \n\nF-7\n\n*Table of Contents*\n\n \n\nIntangible Assets: The Company recorded goodwill of $278,000 as a result of the acquisition of RH Roanoke, Inc. of certain assets of a former franchisee of the Company. Goodwill has an indeterminable life and is assessed for impairment at least annually and more frequently as triggering events may occur. In making this assessment, management relies on a number of factors including operating results, business plans, economic projections, anticipated future cash flows, and transactions and marketplace data. Any impairment losses determined to exist are recorded in the period the determination is made. There are inherent uncertainties related to these factors and management’s judgment is involved in performing goodwill and other intangible assets valuation analysis, thus there is risk that the carrying value of goodwill and other intangible assets may be overstated or understated. The Company has elected to perform the annual impairment assessment of recorded goodwill as of the end of the Company’s fiscal year. The results of this annual impairment assessment indicated that the fair value of the reporting unit as of December 31, 2025 exceeded the carrying or book value, including goodwill, and therefore recorded goodwill was not subject to impairment.\n\n \n\nLong 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.\n\n \n\nRevenue Recognition\n\nThe 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.\n\n \n\nThe Company generates revenue from the following primary sources:\n\n \n\n**Restaurant Revenue**\n\nRestaurant 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.\n\n \n\n**Franchise Royalties**\n\nThe 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.\n\n \n\n**Initial Franchise Fees**\n\nInitial 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.\n\n \n\n**Equipment Commissions**\n\nThe 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.\n\n \n\n \n\nF-8\n\n*Table of Contents*\n\n \n\n**Manufacturer and Distributor Allowances**\n\nThe 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.\n\n \n\n**Administrative Fees and Other Revenue**\n\nAdministrative 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.\n\nDisaggregation of Revenue\n\n \n\nThe following table disaggregates revenue by major revenue source for the years ended December 31:\n\n \n\n**Revenue Source**\n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\nCompany-owned Craft Pizza & Pub restaurant revenue\n\n \n$8,771,389\n \n\n \n$8,577,148\n \n\nCompany-owned non-traditional restaurant revenue\n\n \n\n \n1,205,657\n \n\n \n\n \n953,574\n \n\nFranchising revenue (including royalties, franchise fee amortization, manufacturer allowances, equipment commissions and other franchise-related revenue)\n\n \n\n \n6,213,917\n \n\n \n\n \n5,540,968\n \n\nAdministrative fees and other revenue\n\n \n\n \n270,496\n \n\n \n\n \n77,910\n \n\n**Total Revenue**\n\n \n**$****16,461,459**\n \n\n \n**$****15,149,600**\n \n\n \n\nContract Balances\n\n \n\nDeferred 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.\n\n \n\nDeferred contract income was approximately $1.70 million and $1.60 million as of December 31, 2025 and 2024, respectively. Deferred contract costs were approximately $1.70 million and $1.60 million as of December 31, 2025 and 2024, respectively.\n\n \n\nThe Company recognized approximately $325,305 and $264,847 of deferred franchise fee revenue during 2025 and 2024, respectively.\n\n \n\nFranchising 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.  \n\n \n\nIncome Taxes\n\n \n\nThe Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes.\n\n \n\nDeferred 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.\n\n \n\n \n\nF-9\n\n*Table of Contents*\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nBasic 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.\n\n \n\nThe following table sets forth the calculation of basic and diluted (loss) income per share for the year ended December 31, 2024:\n\n \n\n \n\n \n\nIncome\n\n(Numerator)\n\n \n\n \n\nShares\n\n(Denominator)\n\n \n\n \n\nPer Share\n\nAmount\n\n \n\n**Net income per share – basic**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income (loss)\n\n \n$(3,174)\n \n\n \n22,215,512\n \n\n \n$(0.00)\n\n**Effect of dilutive securities**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOptions and warrants\n\n \n\n \n\n \n\n \n\n \n\n \n844,744\n \n\n \n\n \n\n \n\n \n\nConvertible Notes\n\n \n\n \n57,500\n \n\n \n\n \n850,000\n \n\n \n\n \n\n \n\n \n\n**Diluted net income per share**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n$54,326\n \n\n \n\n \n23,910,256\n \n\n \n$0.00\n \n\n \n\nThe following table sets forth the calculation of basic and diluted income per share for the year ended December 31, 2025:\n\n \n\n \n\n \n\nIncome\n\n(Numerator)\n\n \n\n \n\nShares\n\n(Denominator)\n\n \n\n \n\nPer Share\n\nAmount\n\n \n\n**Net income per share – basic**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n$1,173,224\n \n\n \n\n \n22,215,512\n \n\n \n$0.05\n \n\n**Effect of dilutive securities**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOptions and warrants\n\n \n\n \n\n \n\n \n\n \n\n \n8,713,834\n \n\n \n\n \n\n \n\n \n\nConvertible Notes\n\n \n\n \n57,500\n \n\n \n\n \n1,150,000\n \n\n \n\n \n\n \n\n \n\n**Diluted net income per share**\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n \n1,230,724\n \n\n \n\n \n32,079,346\n \n\n \n$0.04\n \n\n \n\nSubsequent 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.\n\n \n\n \n\nF-10\n\n*Table of Contents*\n\n \n\nStock-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.\n\n \n\nEmployee 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.\n\n \n\nWhen first established under the CARES Act, the tax credit was equal to 50% of the qualified wages an eligible employer paid to employees after March 12, 2020 and before January 1, 2021. The credit was also limited to a maximum annual per employee credit of $5,000. The credit was then extended through June 30, 2021 by the Tax Payer Certainty and Disaster Relief Act (“Relief Act”). The Relief Act modified the credit to be 70% of up to $10,000 of qualified wages per quarter in 2021 through June 30, 2021.  The credit was further extended through December 31, 2021 by the American Rescue Plan Act of 2021 (“ARPA”) but was retroactively reduced by the Infrastructure Investment and Jobs Act, ending effective September 30, 2021. \n\n \n\nDuring the first quarter of 2023 the Company determined that it was entitled to an ERC of $1.718 million and has submitted amended federal Form 941 returns claiming that refund.  The ERC refund is treated as a government grant reducing appropriate expenses for the $1.718 million less expenses of $258,000 for applying for the refund or a net of $1.460 million which primarily affected franchising venue as other operating expenses.  This refund applied both to Noble Roman’s, Inc. and its subsidiary, RH Roanoke, Inc.  To date the Company has received all five quarterly refunds for RH Roanoke, Inc. and three refunds for 2020 and one of the two quarterly refunds for 2021 for Noble Roman’s.  In recent communications with the Internal Revenue Service (“IRS”) initiated by the Company, the IRS has indicated that they try to respond promptly but they often need a little more time.\n\n \n\n**Recently Adopted Accounting Standards**\n\nDuring 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.\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\n \n\nF-11\n\n*Table of Contents*\n\n \n\n \n\n**Reclassification**\n\nCertain 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.\n\n \n\n**Recently Issued Accounting Standards Not Yet Adopted**\n\nIn 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.\n\n \n\nIn 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.\n\n \n\nIn 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.\n\n \n\n \n\n**Note 2:  Inventory**\n\n \n\nInventory 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:\n\n \n\n \n\n \n\n2024\n\n \n\n \n\n2025\n\n \n\nIngredient inventory used to make products in company locations\n\n \n$171,793\n \n\n \n$165,914\n \n\nMarketing materials\n\n \n\n \n31,239\n \n\n \n\n \n30,035\n \n\nEquipment inventory\n\n \n\n \n783,943\n \n\n \n\n \n769,263\n \n\nTotal\n\n \n$986,975\n \n\n \n$965,212\n \n\n \n\n \n\nF-12\n\n*Table of Contents*\n\n \n\n**Note 3:  Accounts Receivable**\n\n \n\nAt 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 $220,476.\n\n. \n\nOther assets, as of December 31, 2025, include security deposits and other miscellaneous assets in the amount of $114,106 and cash value of life insurance in the amount of $448,650. As of December 31, 2024 other assets included security deposits and other miscellaneous assets in the amount of $86,000 and cash value of life insurance in the amount of $218,000.\n\n \n\n**Note 4:  Property and Equipment**\n\n \n\nA summary of property and equipment as of December 31, 2024 and 2025 is as follows:\n\n \n\n \n\n \n\n2024\n\n \n\n \n\n2025\n\n \n\nEquipment\n\n \n$4,349,205\n \n\n \n$4,463,379\n \n\nLeasehold improvements\n\n \n\n \n3,142,591\n \n\n \n\n \n3,175,507\n \n\nTotal before depreciation and amortization\n\n \n\n \n7,491,796\n \n\n \n\n \n7,638,886\n \n\nLess accumulated depreciation and amortization\n\n \n\n \n(3,583,276)\n \n\n \n(3,979,112)\n\nNet property and equipment\n\n \n$3,908,520\n \n\n \n$3,659,774\n \n\n \n\n**Note 5:  Notes Payable  **\n\n \n\nOn 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 $8.0 million. The Company used the net proceeds of the Agreement as follows: (i) $4.2 million was used to repay the Company’s then-existing bank debt which was in the original amount of $6.1 million; (ii) $1,275,000 was used to repay the portion of the Company’s existing subordinated convertible debt the maturity date of which most had not previously been extended; (iii) debt issuance costs; and (iv) the remaining net proceeds were used for working capital or other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations.\n\n \n\nThe Senior Note prior to the Amendment was bearing cash interest of SOFR, as defined in the Agreement, plus 7.75% per annum.  In addition, the Senior Note required PIK Interest of 3% per annum, which was being added to the principal amount of the Senior Note.  After the amendment, cash interest is SOFR, as defined in the Agreement, plus 9.0% per annum payable in arrears on the last calendar day of each month, however the PIK interest was eliminated by the amendment.  Interest is payable in arrears on the last calendar day of each month.  The Senior Note now requires principal payments of $91,667 per month beginning in May 2025.    \n\n \n\nIn conjunction with the borrowing under the Senior Note, the Company issued to Corbel the Original Corbel Warrant to purchase up to 2,250,000 shares of Common Stock. The Original Corbel Warrant entitles Corbel to purchase from the Company, at any time or from time to time: (i) 1,200,000 shares of Common Stock at an exercise price of $0.10 per share (“Tranche 1”), (ii) 900,000 shares of Common Stock at an exercise price of $0.10 per share (“Tranche 2”), and (iii) 150,000 shares of Common Stock at an exercise price of $0.10 per share (“Tranche 3”).  Upon extension of the Senior Note, the Company issued an additional Warrant (the “New Corbel Warrant”) to Corbel to purchase up to 750,000 additional shares at an exercise price of $0.10 per share. Cashless exercise is only permitted with respect to Tranche 3 of the Original Corbel Warrant and the New Corbel Warrant. Corbel has the right, within eight months after the issuance of any shares under the Original Corbel Warrant or the New Corbel Warrant, to require the Company to repurchase such shares for cash or for put notes, at the Company’s discretion. The Original Corbel Warrant expires on the tenth anniversary of the date of its issuance.  The New Corbel Warrant expires on the fifth anniversary of the date of its issuance.  The Company was in compliance with the amended agreement as of December 31, 2025.  The fair value of the Corbel warrants at December 31, 2024 was $538,822 and the fair value at December 31, 2025 was $500,000. \n\n \n\n \n\nF-13\n\n*Table of Contents*\n\n \n\nAt December 31, 2025, the balance of the Senior Note was comprised of:\n\n \n\nPrincipal\n\n \n$5,853,180\n \n\nUnamortized Loan Closing Cost\n\n \n\n \n382,356\n \n\nCarrying Value\n\n \n$5,470,824\n \n\n \n\nIn January 2017, the Company completed the offering of $2.4 million principal amount of promissory notes (the “Notes”) convertible to Common Stock at $0.50 per share and warrants (the “Warrants”) to purchase up to 2.4 million shares of the Company’s Common Stock at an exercise price of $1.00 per share, subject to adjustment. In 2018, $400,000 principal amount of Notes was converted into 800,000 shares of the Company’s Common Stock, in January 2019 another Note in the principal amount of $50,000 was converted into 100,000 shares of the Company’s Common Stock, and in August 2019 another Note in the principal amount of $50,000 was converted into 100,000 shares of the Company’s Common Stock, leaving principal amounts of Notes of $1.9 million outstanding as of December 31, 2019.  Holders of Notes in the principal amount of $775,000 extended their maturity date to January 31, 2023.  In February 2020, $1,275,000 principal amount of the Notes were repaid in conjunction with a new financing leaving a principal balance of $625,000 of subordinated convertible notes outstanding due January 31, 2023. In April 2023, the holder of $50,000 principal amount of the subordinated convertible notes was repaid by the Company leaving $575,000 principal amount of Notes outstanding, $425,000 of which have been extended to May 31, 2025 or the repayment of the Senior Note, whichever comes first. The original $150,000 notes that were not extended and the $425,000 that were extended to May 31, 2025 are not past due because the holders subordinated their Notes to Corbel and Corbel prohibits payment until the Senior Note is paid, subject to the payment noted above.  These Notes bear interest at 10% per annum, including the Notes which have not been extended, paid quarterly and are convertible to Common Stock any time prior to maturity at the option of the holder at $0.50 per share, as adjusted per the terms. \n\n \n\nPlacement 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.\n\n \n\nTotal cash and non-cash interest accrued on the Company’s indebtedness in 2024 was $1.62 million  and in 2025 was $1.34 million.\n\n \n\n**Note 6 – Warrant Liability and Fair Value Measurements**\n\n \n\nWarrant Liability\n\nThe 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.\n\n \n\n \n\nF-14\n\n*Table of Contents*\n\n \n\n \n\nAccordingly, 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.\n\n \n\nDuring 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.\n\n \n\nAs of December 31, 2025, the Company had warrants outstanding that were classified as liabilities and recorded at fair value.\n\n \n\nThe following table summarizes activity in the warrant liability:\n\n \n\n \n\n \n\n**Amount**\n\n \n\nFair value of warrant liability – January 1, 2025\n\n \n$538,822\n \n\nNew warrants issued\n\n \n\n \n\n 483,156\n\n \n\nChange in fair value recognized in earnings\n\n \n\n \n(521,978)\n\nFair value of warrant liability – December 31, 2025\n\n \n$500,000\n \n\n \n\nThe change in fair value of the warrant liability is included in the accompanying Consolidated Statements of Operations as \"Change in fair value of warrants.\"\n\n \n\nFair Value Measurements\n\nThe Company measures the warrant liability at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurement.\n\n \n\nASC Topic 820 establishes a hierarchy for inputs used in measuring fair value as follows:\n\n \n\n·\nLevel 1 – Quoted prices in active markets for identical assets or liabilities.\n\n·\nLevel 2 – Observable inputs other than quoted prices included in Level 1.\n\n·\nLevel 3 – Unobservable inputs supported by little or no market activity.\n\n \n\nThe Company's warrant liability is classified within Level 3 of the fair value hierarchy because significant valuation inputs are unobservable and require management judgment.\n\n \n\nThe following table presents the Company's warrant liability measured at fair value on a recurring basis as of December 31:\n\n \n\n**Fair Value Hierarchy**\n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\nLevel 1\n\n \n$—\n \n\n \n$—\n \n\nLevel 2\n\n \n\n \n—\n \n\n \n\n \n—\n \n\nLevel 3\n\n \n\n \n500,000\n \n\n \n\n \n538,822\n \n\nTotal Fair Value\n\n \n$500,000\n \n\n \n$538,822\n \n\n \n\nValuation Methodology\n\nThe Company utilized a valuation methodology incorporating market participant assumptions and available market evidence. Significant assumptions considered in the valuation included:\n\n \n\n·\nMarket price of the Company's common stock;\n\n·\nContractual exercise prices;\n\n·\nRemaining contractual terms;\n\n·\nExpected volatility;\n\n·\nRisk-free interest rates;\n\n·\nProbability of exercise and settlement assumptions; and\n\n·\nOther relevant market and contractual factors.\n\n \n\n \n\nF-15\n\n*Table of Contents*\n\n \n\n \n\nBecause significant valuation inputs are not directly observable in active markets, the valuation is classified as a Level 3 measurement.\n\n \n\nLevel 3 Rollforward\n\n \n\nThe following table presents a rollforward of the Company's Level 3 warrant liability:\n\n \n\n \n\n \n\n**Amount**\n\n \n\nBalance at January 1, 2025\n\n \n$538,822\n \n\nNew warrants issued\n\n \n\n \n\n 483,156\n\n \n\nFair value adjustments recognized in earnings\n\n \n\n \n(521,978)\n\nBalance at December 31, 2025\n\n \n$500,000\n \n\n \n\nSubsequent Event\n\nSubsequent 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 $500,000, subject to the conditions set forth in the agreement. Management considered this subsequent agreement in evaluating the fair value of the warrant liability at December 31, 2025.\n\n \n\n**Note 7:  Royalties and Fees**\n\n \n\nApproximately $294,617 and $325,305 are included in 2024 and 2025, respectively, for initial fees in the Consolidated Statements of Operations. Also included in royalties and fees were approximately $145,000 and $84,311 in 2024 and 2025, respectively, for equipment commissions.  Most of the cost for the services required to be performed by the Company are incurred prior to the initial fee income being recorded which is based on contractual liability for the franchisee.\n\n \n\nIn 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.\n\n \n\nDuring 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. \n\n \n\n \n\nF-16\n\n*Table of Contents*\n\n \n\n**Note 8:  Liabilities for Leased Facilities**\n\n \n\nThe Company has various leases for its Company-owned Craft Pizza & Pub locations and its corporate office. \n\n \n\nThe following table summarizes the right of use asset and lease liability using a ten-year term for the leases and assumes 7% interest rate as of December 31, 2025.\n\n \n\nRight of use assets\n\n \n$3,332,195\n \n\nLease liability\n\n \n\n \n\n \n\n \n\nCurrent\n\n \n\n \n950,409\n \n\nLong-term\n\n \n\n \n2,564,162\n \n\nTotal\n\n \n$3,514,571\n \n\n \n\nThe following table summarizes the Company’s scheduled minimum lease payments as of December 31, 2025.\n\n \n\n2026\n\n \n$950,409\n \n\n2027 and 2028\n\n \n\n \n1,611,098\n \n\n2029 and after\n\n \n\n \n953,064\n \n\nTotal operating lease obligations\n\n \n$3,514,571\n \n\n \n\n**Note 9:  Income Taxes**\n\n \n\nThe Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse.\n\n \n\nThe components of income tax expense (benefit) for the years ended December 31 are as follows:\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\nCurrent federal income tax expense\n\n \n$—\n \n\n \n$—\n \n\nCurrent state income tax expense\n\n \n\n \n—\n \n\n \n\n \n—\n \n\nDeferred federal income tax expense (benefit)\n\n \n\n \n356,656\n \n\n \n\n \n(132,479)\n\nDeferred state income tax expense (benefit)\n\n \n\n \n60,816\n \n\n \n\n \n(24,879)\n\nTotal income tax expense (benefit)\n\n \n$417,472\n \n\n \n$(157,358)\n\n \n\nIncome before income taxes was approximately $1.59 million in 2025 and a loss before income taxes of approximately $161,000 in 2024.\n\n \n\nThe 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:\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\nFederal statutory tax rate\n\n \n\n \n21.0%\n \n\n \n21.0%\n\nState income taxes, net of federal benefit\n\n \n\n \n2.4%\n \n\n \n2.4%\n\nPermanent differences\n\n \n\n \n1.6%\n \n\n \n(0.7)%\n\nEffective tax rate\n\n \n\n \n25.0%\n \n\n \n22.7%\n\n \n\n \n\nF-17\n\n*Table of Contents*\n\n \n\nDeferred tax assets consist primarily of the following at December 31:\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\nFederal and state net operating loss carryforwards\n\n \n$3,114,727\n \n\n \n$3,532,199\n \n\nTotal deferred tax assets\n\n \n\n \n3,114,727\n \n\n \n\n \n3,532,199\n \n\nValuation allowance\n\n \n\n \n—\n \n\n \n\n \n—\n \n\nNet deferred tax asset\n\n \n$3,114,727\n \n\n \n$3,532,199\n \n\n \n\nThe Company had federal and state net operating loss carryforwards of approximately $13.4 million as of December 31, 2025. Certain federal net operating loss carryforwards may be carried forward indefinitely, subject to applicable limitations under the Internal Revenue Code.\n\n \n\nManagement 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.\n\n \n\nBased 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.\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\nThe 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.\n\n \n\n**Note 10:  Common Stock**\n\n \n\nAs of December 31, 2025, there were outstanding $575,000 principal amount of Notes of which $425,000 are convertible into Common Stock at $0.50 per share and warrants to purchase 625,000 shares with an exercise price of $0.10 per share.  During 2022, the maturity of all of those Notes were extended except for two Notes in the principal amount of $150,000 to May 31, 2025 and $425,000 in principal amount of Notes which was extended to May 31, 2025 or the repayment of the Corbel Note, whichever is later.  The Notes that were not extended matured, and accompanying Warrants expired, but cannot be repaid until the Senior Note is repaid.  The Company issued to Corbel the Original Corbel Warrant to purchase up to 2,250,000 shares of Common Stock, as described in Note 5 of these notes to the Company’s consolidated financial statements.\n\n \n\nThe 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 3,973,834 shares were outstanding.\n\n \n\n \n\nF-18\n\n*Table of Contents*\n\n \n\nThe 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.   \n\n \n\nThe 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:\n\n \n\nExpected volatility\n \n\n \n20%\n\nExpected dividend yield\n \n\n None\n\n \n\nExpected term (in years)\n \n\n \n3\n \n\nRisk-free interest rate\n \n\n \n3.82%\n\n \n\nThe 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:\n\n \n\nBalance of employee stock options outstanding as of 12/31/23\n\n \n\n \n3,397,500\n \n\nStock options granted during the year ended 12/31/24\n\n \n\n \n919,334\n \n\nStock options exercised during the year ended 12/31/24\n\n \n\n \n0\n \n\nStock options forfeited/expired during the year ended 12/31/24\n\n \n\n \n(245,500)\n\nBalance of employee stock options outstanding as of 12/31/24\n\n \n\n \n4,071,334\n \n\nStock options granted during the year ended 12/31/25\n\n \n\n \n555,000\n \n\nStock options exercised during the year ended 12/31/25\n\n \n\n \n0\n \n\nStock options forfeited/expired during the year ended 12/31/25\n\n \n\n \n(652,500)\n\nBalance of employee stock options outstanding as of 12/31/25\n\n \n\n \n3,973,834\n \n\n \n\nThe 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.\n\n \n\nBalance of employee non-vested stock options outstanding as of 12/31/23\n\n \n\n \n560,999\n \n\nStock options granted during the year ended 12/31/24\n\n \n\n \n919,334\n \n\nStock options vested during the year ended 12/31/24\n\n \n\n \n(315,166)\n\nStock options forfeited/expired during the year ended 12/31/24\n\n \n\n \n(245,500)\n\nBalance of employee non-vested stock options outstanding as of 12/31/24\n\n \n\n \n919,667\n \n\nStock options granted during the year ended 12/31/25\n\n \n\n \n555,000\n \n\nStock options vested during the year ended 12/31/25\n\n \n\n \n(464,567)\n\nStock options forfeited/expired during the year ended 12/31/25\n\n \n\n \n(652,500)\n\nBalance of employee non-vested stock options outstanding as of 12/31/25\n\n \n\n \n357,600\n \n\n \n\nThe weighted average grant date exercise price of employee stock options granted during 2025 was $0.18.  Total compensation cost recognized for share-based payment arrangements was $27,652 in 2024 with a tax benefit of $6,636 and was $43,363 in 2025 with a tax benefit of $10,407.  As of December 31, 2025, total unamortized compensation cost related to options was $78,007, which will be recognized as compensation cost over the next six to 36 months.  No cash was used to settle equity instruments under share-based payment arrangements.\n\n \n\n \n\nF-19\n\n*Table of Contents*\n\n \n\n**Note 11:  Statements of Financial Accounting Standards**\n\n \n\nThe 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.\n\n \n\n**Note 12:  Contingencies**\n\n \n\nThe Company, from time to time, is or may become involved in litigation or regulatory proceedings arising out of its normal business operations.\n\n \n\nCurrently, there are no such pending proceedings which the Company considers to be material.\n\n \n\nThere are no commitments to any key executives or officers beyond an employment agreement with the Executive Chairman and the President and Chief Executive Officer.\n\n \n\n**Note 13:  Certain Relationships and Related Transactions**\n\n \n\nThe 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.\n\n \n\nOf 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 $50,000 and a Warrant to purchase 50,000 shares of the Company’s Common Stock. These transactions were all completed on the same terms and conditions as all of the unrelated investors who purchased the other 41 Units.  The Notes, at the time of issue, were to mature three years after issue date.  In late 2018, the Company offered each remaining Note holder to extend the maturity of the Notes to January 31, 2023.  Holders of $775,000 in principal amount of the Notes accepted that offer of extension including Paul W. Mobley and Herbst Capital Management, LLC with respect to their Notes.  In conjunction with the refinancing of the Company in February 2020, Notes held by Paul Mobley were included in the $1,275,000 in principal amount of Notes that were repaid out of the proceeds of the new financing.  In September 2022, Paul Mobley bought a Note in principal amount of $200,000 from Marcel Herbst which is included in the balance sheet as a portion of the outstanding convertible notes payable along with the attached warrants.  In 2024, Paul W. Mobley received the 10% interest in the amount of $20,000 from the Company at the same time and same rate as all other subordinated debt holders, which was included in interest expense.  After December 31, 2024, Paul Mobley agreed to pay the Company $50,000 for credit card back-up records that could not be located for charges paid by the Company during 2024 based on the use of his personal credit card.  That was established as a receivable at December 31, 2024 and that receivable was repaid immediately after established on May 12, 2025. \n\n \n\n \n\nF-20\n\n*Table of Contents*\n\n \n\nAs of December 31, 2025, Paul W. Mobley, Executive Chairman and Chief Financial Officer, beneficially owned subordinated convertible notes with an aggregate principal balance of $300,000 that were acquired from purchases from existing note holders.\n\n \n\nDuring 2025, the Company paid approximately $27,500 of interest to Mr. Mobley related to his holdings of subordinated convertible notes. Such interest was paid on the same terms and at the same contractual rate as interest paid to all other holders of subordinated convertible notes.\n\n \n\nDuring 2025, Mr. Mobley acquired from an existing note holder a subordinated convertible note with a principal balance of $100,000 and the related warrants. The transaction was between Mr. Mobley and the selling note holder and did not involve the issuance of additional securities by the Company.\n\n \n\n**Note 14 – Segment Information**\n\n \n\nThe Company accounts for segment reporting in accordance with ASC Topic 280, Segment Reporting.\n\nOperating 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.\n\n \n\nThe Company's CODM is its Chief Executive Officer.\n\n \n\nThe Company has identified two reportable operating segments:\n\n \n\n·\n\nFranchising – Consists primarily of franchise royalties, franchise fee revenue, manufacturer and distributor allowances, equipment commissions, and related support activities.\n\n·\n\nCompany-Owned Restaurants – Consists of the operations of Company-owned Craft Pizza & Pub locations and Company-operated non-traditional restaurant locations.\n\n \n\nThe 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.\n\n \n\nSegment information for the years ended December 31, 2025 and 2024 is as follows:\n\n \n\n**Year Ended December 31, 2025**\n\n \n\n \n\n \n\n**Franchising**\n\n \n\n \n\n**Company-Owned Restaurants**\n\n \n\n \n\n**Total**\n\n \n\nRevenue\n\n \n$6,213,917\n \n\n \n$9,977,046\n \n\n \n$16,190,963\n \n\nAdministrative fees and other revenue\n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n270,496\n \n\nTotal revenue\n\n \n\n \n6,213,917\n \n\n \n\n \n9,977,046\n \n\n \n\n \n16,461,459\n \n\nSegment operating expenses\n\n \n\n \n(1,709,258)\n \n\n \n(9,147,798)\n \n\n \n(10,857,056)\n\nSegment contribution margin\n\n \n$4,504,659\n \n\n \n$829,248\n \n\n \n$5,604,403\n \n\n \n\n \n\nF-21\n\n*Table of Contents*\n\n \n\n \n\n**Year Ended December 31, 2024**\n\n \n\n \n\n \n\n**Franchising**\n\n \n\n \n\n**Company-Owned Restaurants**\n\n \n\n \n\n**Total**\n\n \n\nRevenue\n\n \n$5,540,968\n \n\n \n$9,530,722\n \n\n \n$15,071,690\n \n\nAdministrative fees and other revenue\n\n \n\n \n—\n \n\n \n\n \n—\n \n\n \n\n \n77,910\n \n\nTotal revenue\n\n \n\n \n5,540,968\n \n\n \n\n \n9,530,722\n \n\n \n\n \n15,149,600\n \n\nSegment operating expenses\n\n \n\n \n(1,703,136)\n \n\n \n(8,794,444)\n \n\n \n(10,497,580)\n\nSegment contribution margin\n\n \n$3,837,832\n \n\n \n$736,278\n \n\n \n$4,652,020\n \n\n \n\nThe following table reconciles total segment contribution margin to consolidated income before income taxes:\n\n \n\n**Year Ended December 31,**\n\n \n\n \n\n \n\n**2025**\n\n \n\n \n\n**2024**\n\n \n\nTotal segment contribution margin\n\n \n$5,604,403\n \n\n \n$4,652,020\n \n\nGeneral and administrative expenses\n\n \n\n \n(2,336,422)\n \n\n \n(2,677,334)\n\nDepreciation and amortization\n\n \n\n \n(392,948)\n \n\n \n(499,648)\n\nOperating income\n\n \n\n \n2,875,033\n \n\n \n\n \n1,475,038\n \n\nInterest expense\n\n \n\n \n(1,336,773)\n \n\n \n(1,637,398)\n\nChange in fair value of warrants\n\n \n\n \n52,436\n \n\n \n\n \n1,828\n \n\nIncome (loss) before income taxes\n\n \n$1,590,696\n \n\n \n$(160,532)\n\n \n\nThe CODM does not regularly review total assets by segment for purposes of allocating resources. Accordingly, asset information by segment is not presented.\n\n \n\nSubstantially 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.\n\n \n\n**Note 15 – Subsequent Events**\n\n \n\nThe Company evaluated subsequent events through the date the consolidated financial statements were issued.\n\n \n\nSubsequent 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\").\n\n \n\nThe 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 $500,000.\n\n \n\nThe 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.\n\n  \n\nThe 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.\n\n \n\nManagement 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.\n\n \n\n \n\nF-22\n\n*Table of Contents*\n\n \n\n \n\n**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\nTo the Board of Directors/Audit Committee and Stockholders of Noble Roman’s, Inc.\n\n \n\n**Opinion on the Financial Statements**\n\n \n\nWe 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.\n\n \n\n**Basis for Opinion**\n\n \n\nThese 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.\n\n \n\nWe 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.\n\n \n\nOur 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\n\n \n\n**Critical Audit Matters**\n\n \n\nCritical 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.\n\n \n\n  \n\n \n\nSassetti LLC\n\nWe have served as the Company’s auditor since 2024. Oak Brook, Illinois\n\nAuditor ID # 29 June 6, 2025\n\n \n\n2107 Swift Drive, Suite 210, Oak Brook, IL 60523 • 708.386.1433 • www.sassetti.com\n\n \n\n \n\n \n\n \n\nF-23\n\n*Table of Contents*\n\n \n\nREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\n \n\nTo the Board of Directors and\n\nStockholders of Noble Roman's Inc.\n\n \n\n**Opinion on the Financial Statements**\n\n \n\nWe 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.\n\n \n\n**Basis for Opinion**\n\n \n\nThese 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.\n\n \n\nWe 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.\n\n \n\nOur 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.\n\n \n\n**Critical Audit Matters**\n\n \n\nThe 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.\n\n \n\n*Deferred Tax Asset Realizability*\n\n \n\nAs 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.\n\n \n\nThe primary procedures we performed to address this critical audit matter included:\n\n \n\n \n\n·\nInspecting the Company's filed federal income tax returns and evaluating available net operating loss carryforwards;\n\n \n\n·\nIndependently estimating taxable income utilizing audited financial statement amounts and known book-tax differences;\n\n \n\n·\nEvaluating significant temporary differences identified during the audit, including lease accounting balances under ASC 842 and other deferred tax items;\n\n \n\n·\nEvaluating management's assessment regarding realization of deferred tax assets; and\n\n \n\n·\nAssessing whether a valuation allowance was required under ASC 740.\n\n \n\n*Fair Value Measurement of Warrant Liability*\n\n \n\nAs 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.\n\n \n\nWe 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.\n\n \n\nThe primary procedures we performed to address this critical audit matter included:\n\n \n\n \n\n·\nEvaluating the contractual terms of the warrant agreements and related amendments;\n\n \n\n·\nAssessing the appropriateness of liability classification under U.S. GAAP;\n\n \n\n·\nTesting the completeness of warrant issuances and modifications occurring during the year;\n\n \n\n·\nEvaluating the valuation methodology utilized to estimate fair value;\n\n \n\n·\nTesting significant assumptions utilized in the Black-Scholes valuation model, including volatility, expected term, exercise prices, and risk-free interest rates; and\n\n \n\n·\nRecalculating selected components of the warrant liability valuation.\n\n \n\n/s/ Stephano Slack LLC (PCAOB ID#03523)\n\n \n\nWe have served as the Company’s auditor since 2025.\n\n \n\nWayne, Pennsylvania\n\n \n\nMay 29, 2026\n\n \n\n \n\nF-24\n\n*Table of Contents*"}