United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ~~ended~~ ended: June 30, ~~2020~~

2021

Commission file number: 0-11104

~~NOBLE ROMAN~~’~~S, INC.~~

~~(Exact name of registrant as specified in its charter)~~

~~Indiana~~	~~35-1281154~~ NOBLE ROMAN’S, INC.
~~(State~~ (Exact name of registrant as specified in its charter)

Indiana		35-1281154
(State or other jurisdiction of organization)	~~(I.R.S.~~	(I.R.S. Employer Identification No.)


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

(317) 634-3377

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesX ☒ No ~~___~~

☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes~~_X_~~ ☒ No~~___~~

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐

Non-Accelerated Filer	☐	Smaller Reporting Company X	☒

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~Yes___ No_~~X_

Yes ☐ No ☒

As of ~~July 31, 2020~~August 6, 2021, there were 22,215,512 shares of Common Stock, no par value, outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

The following unaudited condensed consolidated financial statements are included herein:

Condensed consolidated balance sheets as of December 31, ~~2019~~2020 and June 30, ~~2020~~2021 (unaudited)		Page 3

Condensed consolidated statements of operations for the three-monthand six-month periods ended June 30, ~~2019~~2020 and ~~2020~~2021 (unaudited)		Page 4

Condensed consolidated statements of changes in stockholders' equity for the three-month periods ended June 30, 2021 and 2020 and ~~2019 and~~six-month periods ended June 30, 2021 and 2020 ~~and 2019~~ (unaudited)		Page 5

Condensed consolidated statements of cash flows for the six-monthperiods ended June 30, ~~2019~~2020 and ~~2020~~2021 (unaudited)	7	Page 6

Notes to condensed consolidated financial statements (unaudited)	8	Page 7

Table of Contents

Noble Roman's, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

                                                         Assets

December 31,
2019

June 30,
2020

Current assets:

   Cash
$218,132
$1,577,434
   Accounts receivable - net
  978,408
  844,677
   Inventories
  880,660
  852,423
   Prepaid expenses
  784,650
  587,529
           Total current assets
  2,861,850
  3,862,063



Property and equipment:


   Equipment
  2,899,611
  3,151,935
   Leasehold improvements
  1,187,100
  1,571,542
   Construction and equipment in progress
  374,525
  468,476

  4,461,236
  5,191,953
   Less accumulated depreciation and amortization
  1,689,520
  1,831,162
          Net property and equipment
  2,771,716
  3,360,791
Deferred tax asset
  3,900,221
  4,026,815
Deferred contract cost
  817,763
  808,423
Goodwill
  278,466
  278,466
Operating lease right of use assets
  4,242,416
  4,911,306
Other assets including long-term portion of receivables - net
  4,232,655
  5,068,422
                      Total assets
$19,105,087
$22,316,286



Liabilities and Stockholders' Equity


Current liabilities:


   Current portion of term loan payable to bank
$871,429
$-
   Accounts payable and accrued expenses
  731,059
  397,179
   Current portion of operating lease liability
  333,763
  342,763
                Total current liabilities
  1,936,251
  739,942



Long-term obligations:


   Term loans payable to bank (net of current portion)
  2,999,275
  -
   Term loan payable to Corbel
  -
  7,272,599
   Warrant value
  -
  29,037
   Convertible notes payable
  1,501,282
  562,354
   Operating lease liabilities - net of short-term portion
  4,016,728
  4,735,219
   Deferred contract income
  817,763
  808,423
               Total long-term liabilities
  9,335,048
  13,407,632



Stockholders' equity:


   Common stock – no par value (40,000,000 shares authorized,
      22,215,512 issued and outstanding as of December 31, 2019 and
      as of June 30, 2020)
  24,858,311
  24,752,535
   Accumulated deficit
  (17,024,523)
  (16,583,823)
                Total stockholders' equity
  7,833,788
  8,168,712
                      Total liabilities and stockholders’ equity
$19,105,087
$22,316,286

	December 31, 2020			June 30, 2021
Assets
Current assets:
Cash	$	1,194,363		$	2,016,677
Accounts receivable - net		879,502			1,006,329
Inventories		890,556			907,662
Prepaid expenses		395,918			466,092
Total current assets		3,360,339			4,396,760

Property and equipment:
Equipment		3,708,689			3,730,952
Leasehold improvements		2,319,445			2,337,079
Construction and equipment in progress		510,225			414,016
		6,538,359			6,482,047
Less accumulated depreciation and amortization		1,989,209			2,178,068
Net property and equipment		4,549,150			4,303,797
Deferred tax asset		3,104,904			3,104,904
Deferred contract cost		834,018			829,260
Goodwill		278,466			278,466
Operating lease right of use assets		6,088,101			5,812,719
Other assets including long-term portion of receivables - net		201,962			233,688
Total assets	$	18,416,940		$	18,959,776

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	878,099		$	533,708
Current portion of operating lease liability		412,005			403,499
Total current liabilities		1,290,104			937,207

Long-term obligations:
Term loan payable to Corbel		7,468,709			7,681,536
Corbel warrant value		29,037			29,037
Convertible notes payable		574,479			585,104
Operating lease liabilities - net of short-term portion		5,863,615			5,615,344
Deferred contract income		834,018			829,260
Total long-term liabilities		14,769,858			14,740,281

Stockholders' equity:
Common stock – no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2020 and as of June 30, 2021)		24,763,447			24,776,184
Accumulated deficit		(22,406,469	)		(21,493,896	)
Total stockholders' equity		2,356,978			3,282,288
Total liabilities and stockholders’ equity	$	18,416,940		$	18,959,776

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

Noble Roman's, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

Three months ended
June 30,

Six months ended
June 30,

2019

2020

2019

2020

Revenue:

    Restaurant revenue - company-owned Craft Pizza
       & Pub
$1,329,465
$1,406,865
$2,472,079
$2,499,813
    Restaurant revenue - company-owned non-traditional
  160,020
  111,433
  330,522
  266,117
    Franchising revenue
  1,620,208
  1,088,344
  3,213,222
  2,555,723
    Administrative fees and other
  11,112
  3,867
  27,731
  8,118
               Total revenue
  3,120,805
  2,610,509
  6,043,554
  5,329,771





Operating expenses:




     Restaurant expenses - company-owned Craft Pizza
        & Pub
  1,120,934
  804,340
  2,131,853
  1,776,369
     Restaurant expenses - company-owned
        non-traditional
  153,109
  76,983
  306,818
  229,226
     Franchising expenses
  544,814
  267,628
  1,039,526
  757,984
              Total operating expenses
  1,818,857
  1,148,951
  3,478,197
  2,763,579





Depreciation and amortization
  76,446
  98,279
  170,045
  164,226
General and administrative expenses
  424,793
  344,374
  841,042
  793,795
             Total expenses
  2,320,096
  1,591,604
  4,489,284
  3,721,600
             Operating income
  800,709
  1,018,905
  1,554,270
  1,608,171





Interest expense
  220,268
  323,165
  347,171
  1,249,454
     Income before income taxes
  580,441
  695,740
  1,207,099
  358,717
Income tax expense (benefit)
  139,305
  -
  289,703
  (81,983)
            Net income
$441,136
$695,740
$917,396
$440,700















Earnings per share – basic:




Net income before income tax
$.03
$.03
$.06
$.02
Net income
$.02
$.03
$.04
$.02
Weighted average number of common shares
    outstanding
  21,742,291
  22,215,512
  21,707,300
  22,215,512





Diluted earnings per share:









Net income before income tax
$.02
$.03
$.05
$.02
Net income
$.02
$.03
$.04
$.02
Weighted average number of common shares
    outstanding
  25,663,140
  23,465,512
  25,633,674
  23,465,512

	Three months ended June 30,				Six months ended June 30,
	2020		2021		2020			2021
Revenue:
Restaurant revenue - company-owned Craft Pizza & Pub	$	1,406,865	$	2,264,739	$	2,499,813		$	4,373,436
Restaurant revenue - company-owned non-traditional		111,433		117,197		266,117			233,301
Franchising revenue		1,088,344		1,199,260		2,555,723			2,253,220
Administrative fees and other		3,867		3,513		8,118			7,069
Total revenue		2,610,509		3,584,709		5,329,771			6,867,026

Operating expenses:
Restaurant expenses - company-owned Craft Pizza & Pub		804,340		1,935,744		1,776,369			3,164,638
Restaurant expenses - company-owned non-traditional		76,983		118,659		229,226			207,813
Franchising expenses		267,628		482,309		757,984			821,674
Total operating expenses		1,148,951		2,536,712		2,763,579			4,194,125

Depreciation and amortization		98,279		142,133		164,226			306,849
General and administrative expenses		344,374		481,860		793,795			780,449
Total expenses		1,591,604		3,160,705		3,721,600			5,281,423
Operating income		1,018,905		424,004		1,608,171			1,585,603

Interest expense		323,165		338,839		1,249,454			673,030
Income before income taxes		695,740		85,165		358,717			912,573
Income tax expense (benefit)		0		0		(81,983	)		0
Net income	$	695,740	$	85,165	$	440,700		$	912,573


Earnings per share – basic:
Net income before income tax	$	.03	$	.00	$	.02		$	.04
Net income	$	.03	$	.00	$	.02		$	.04
Weighted average number of common shares outstanding		22,215,512		22,215,512		22,215,512			22,215,512

Diluted earnings per share:

Net income before income tax	$	.03	$	.00	$	.02		$	.04
Net income	$	.03	$	.00	$	.02		$	.04
Weighted average number of common shares outstanding		23,465,512		23,465,512		23,465,512			23,465,512

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

Noble Roman's, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in

Stockholders' Equity

(Unaudited)

Common Stock
Shares Amount

Accumulated
Deficit

Total

Six Months Ended June 30, 2020::

Balance at December 31, 2019
  22,215,512
$24,858,311
$(17,024,523)
$7,833,788





Net income for six months ended
June 30, 2020


  440,700
  440,700





Unamortized loan origination cost
   attributable to the 500,000 notes
   converted to 1,000,000 shares

  (116,400)

  (116,400)





Amortization of value of employee
    stock options

  10,624

_________

  10,624





Balance at June 30, 2020
  22,215,512
$24,752,535
$(15,583,823)
$8,168,712

~~Three Months Ended June 30, 2020:~~

Common Stock
Shares Amount

Accumulated
Deficit

Total

Balance at March 31, 2020
  22,215,512
$24,747,223
$(17,279,563)
$7,467,660





Amortization of value of employee
    stock options

  5,312

  5,312





Net income for three months ended
    June 30, 2020


  695,740
  695,740





Balance at June 30, 2020
  22,215,512
$24,752,535
$(16,587,823)
$8,168,712

~~See accompanying notes to condensed consolidated financial statements (unaudited~~

Common Stock
Shares Amount

Accumulated
Deficit

Total

Six Months Ended June 30, 2019::

Balance at December 31, 2018
  21,583,032
$24,739,482
$(16,594,146)
$8,145,336





Adjustment for the adoption of
  ASU 2016-02 accounting for leases


  (52,315)
  (52,315)





Net income for six months ended
June 30, 2019


  917,396
  917,396





Amortization of value of employee
    stock options

  8,087

  8,087





Cashless exercise of warrants
  232,381








Conversion of convertible note
    to common stock
  100,000
  50,000
  -
  50,000





Balance at June 30, 2019
  21,915,413
$24,797,569
$(15,729,065)
$9,068,504

~~Three Months Ended June 30, 2019:~~

Common Stock
Shares Amount

Accumulated
Deficit

Total

Balance at March 31, 2019
  21,683,032
$24,789,482
$(16,170,201)
$8,619,281





Amortization of value of employee
    stock options

  8,087

  8,087





Net income for three months ended
    June 30, 2019


  441,136
  441,136





Cashless exercise of warrants
  232,281
  -
  -
  -





Balance at June 30, 2019
  21,915,313
$24,797,569
$(15,729,065)
$9,068,504

	Common Stock				Accumulated
	Shares		Amount		Deficit			Total
Six Months Ended June 30, 2021:

Balance at December 31, 2020		22,215,512	$	24,763,447	$	(22,406,469	)	$	2,356,978

Net income for six months ended June 30, 2021						912,573			912,573

Amortization of value of employee stock options				12,737					12,737

Balance at June 30, 2021		22,215,512	$	24,776,184	$	(21,493,896	)	$	3,282,288

	Common Stock				Accumulated
	Shares		Amount		Deficit			Total
Three Months Ended June 30, 2021:

Balance at March 31, 2021		22,215,512	$	24,769,816	$	(21,579,061	)	$	3,190,755

Amortization of value of employee stock options				6,368					6,368

Net income for three months ended June 30, 2021						85,165			85,165

Balance at June 30, 2021		22,215,512	$	24,776,184	$	(21,493,896	)	$	3,282,288

	Common Stock					Accumulated
	Shares		Amount			Deficit			Total
Six Months Ended June 30, 2020:

Balance at December 31, 2019		22,215,512	$	24,858,311		$	(17,024,523	)	$	7,833,788

Net income for six months ended June 30, 2020							440,700			440,700

Unamortized loan origination cost attributable to the 500,000 notes converted to 1,000,000 shares				(116,400	)					(116,400	)

Amortization of value of employee stock options				10,624						10,624

Balance at June 30, 2020		22,215,512	$	24,752,535		$	(15,583,823	)	$	8,168,712

	Common Stock				Accumulated
	Shares		Amount		Deficit			Total
Three Months Ended June 30, 2020:

Balance at March 31, 2020		22,215,512	$	24,747,223	$	(17,279,563	)	$	7,467,660

Amortization of value of employee stock options				5,312					5,312

Net income for three months ended June 30, 2020						695,740			695,740

Balance at June 30, 2020		22,215,512	$	24,752,535	$	(16,587,823	)	$	8,168,712

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

Noble Roman's, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

   Six Months Ended June 30,

2019

2020

     Net income
$917,396
$440,700
     Adjustments to reconcile net income to net cash
          Provided by (used in) operating activities:


              Depreciation and amortization
  238,942
  1,045,934
              Amortization of lease costs in excess of cash paid
  21,228
  26,153
              Deferred income taxes
  289,703
  (81,983)
              Changes in operating assets and liabilities:


                (Increase) decrease in:


                      Accounts receivable
  (210,607)
  (63,563)
                      Inventories
  53,610
  28,237
                      Prepaid expenses
  7,850
  (1,728)
                      Other assets
  (235,698)
  (357,634)
                 Increase (decrease) in:


                     Accounts payable and accrued expenses
  (394,490)
  (333,884)
               NET CASH PROVIDED BY OPERATING
                  ACTIVITIES
  687,934
  702,232



INVESTING ACTIVITIES


     Purchase of property and equipment
  (85,409)
  (738,304)
              NET CASH USED IN INVESTING ACTIVITIES
  (85,409)
  (738,304)



FINANCING ACTIVITIES


     Payment of principal on bank loans
  (446,895)
  (4,379,013)
     Payment of principal on convertible notes
  -
  (1,275,000)
     Proceeds of new loan - Corbel
  -
  7,049,387
              NET CASH PROVIDED BY (USED IN) FINANCING
                 ACTIVITIES
  (446,895)
  1,395,374



Increase in cash
  155,630
  1,359,302
Cash at beginning of period
  76,194
  218,132
Cash at end of period
$231,824
$1,577,434

~~Supplemental schedule of investing and financing activities~~

~~Cash paid for interest~~

~~$ 298,324~~

~~$ 450,646~~

	Six Months Ended June 30,
	2020			2021
OPERATING ACTIVITIES
Net income	$	440,700		$	912,573
Adjustments to reconcile net income to net cash Provided by (used in) operating activities:
Depreciation and amortization		1,045,934			545,110
Amortization of lease costs in excess of cash paid		26,153			18,605
Deferred income taxes		(81,983	)		0
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable		(63,563	)		(126,827	)
Inventories		28,237			(17,106	)
Prepaid expenses		(1,728	)		(70,174	)
Other assets		(357,634	)		(31,726	)
Increase (decrease) in:
Accounts payable and accrued expenses		(333,884	)		(344,391	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		702,232			886,064

INVESTING ACTIVITIES
Purchase of property and equipment		(738,304	)		(63,750	)
NET CASH USED IN INVESTING ACTIVITIES		(738,304	)		(63,750	)

FINANCING ACTIVITIES
Payment of principal on bank loans		(4,379,013	)		0
Payment of principal on convertible notes		(1,275,000	)		0
Proceeds of new loan - Corbel		7,049,387			0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		1,395,374			0

Increase in cash		1,359,302			822,314
Cash at beginning of period		218,132			1,194,363
Cash at end of period	$	1,577,434		$	2,016,677

Supplemental schedule of investing and financing activities

Cash paid for interest	$	450,646		$	446,801

See accompanying notes to condensed consolidated financial statements (unaudited).

Table of Contents

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 - The accompanying unaudited interim condensed consolidated financial statements, included herein, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated statements have been prepared in accordance with the Company’s accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019, as supplemented by this Form 10-Q for the three months ended June 30,~~ 2020 and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in that report. Unless the context indicates otherwise, references to the “Company” mean Noble Roman’s, Inc. and its subsidiaries.

Significant Accounting Policies

On ~~April 25, 2020,~~February 5, 2021, the Company borrowed ~~$715,000~~$940,734 under the Paycheck Protection Program (the “PPP”). The funds, according to the provision of the Coronavirus Aid, Relief, and Economic ~~Securities~~Security Act (the “CARES Act”), may be used for payroll costs including payroll benefits, interest on mortgage obligations, ~~incurred before February 14, 2020,~~ rent under lease agreements ~~in force before February 15, 2020~~ and ~~utilities for which service began before February 15, 2020.~~utilities. Since the Company met all of the eligibility requirements to participate in the PPP and it was probable from the beginning that the Company’s PPP borrowing will be forgiven, the Company’s participation in the PPP program was accounted for as a government grant. Since the entire amount of the PPP participation was used to pay qualified expenses prior to ~~June 30, 2020,~~March 31, 2021, the qualifying expenses are presented herein as a reduction of those related expenses in the quarter ended ~~June 30, 2020.~~

March 31, 2021.

There have been no other significant changes in the Company's accounting policies from those disclosed in its Annual Report on Form 10-K.

In the opinion of the management of the Company, the information contained herein reflects all adjustments necessary for a fair presentation of the results of operations and cash flows for the interim periods presented and the financial condition as of the dates indicated, which adjustments are of a normal recurring nature. The results for the three-month and six-month periods ended June 30, ~~2020~~2021 are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2020,~~2021, especially in light of recent volatility and uncertainty resulting from the coronavirus (“COVID-19) pandemic, ~~and~~ the governmental response and the ~~government assistance in the form of a~~ PPP ~~grant in the amount of $715,000 affecting the three and six months ended June 30, 2020.~~

funding.

Note 2 – ~~Franchising revenue~~Royalties and fees included initial franchise ~~fee amortization~~fees of ~~$76,000~~$97,000 for the three-month period ended June 30, ~~2020,~~2021, and ~~$101,000~~$42,500 for the ~~six-month~~three-month period ended June 30, ~~2019, compared to $116,000~~2020. Royalties and ~~$210,500 for the respective three-month and six-month periods ended June 30, 2019. Franchising revenue~~fees included equipment commissions of ~~$14,000 and $18,000~~$13,300 for the ~~respective~~ three-month ~~and six-month periods~~period ended June 30, ~~2020,~~2021, and ~~$8,000 and $28,000~~$6,700 for the ~~respective~~ three-month ~~and six-month periods~~period ended June 30, ~~2019. Franchising revenue, less~~2020. Royalties and fees, including amortized initial franchise fees and equipment commissions, were ~~$999,000 and $2.4~~$1.2 million for the ~~respective~~ three-month ~~and six-month periods~~period ended June 30, ~~2020,~~2021, and ~~$1.5~~$1.1 million ~~and $3.0~~ for the ~~respective~~ three-month ~~and six-month periods~~period ended June 30, ~~2019.~~2020. Most of the cost for the services required to be performed by the Company are incurred prior to the franchise fee income being recorded, which is based on a contractual liability of the franchisee.

~~Since~~

The effect on comparable periods within the financial statements by recording franchise fees and cost of opening the units as deferred contract costs and deferred contract income is not material as the initial franchise fee for the non-traditional franchise is intended to defray the initial contract costs, and the ~~franchisee~~franchise fees and contract costs initially incurred and paid approximate the relative amortized franchise fees and contract costs for those same ~~periods, the effect to comparable periods within the financial statements is not material.~~ periods.

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The deferred contract income and deferred costs were both ~~approximated $808,000~~$829,000 on June 30, ~~2020.~~

2021.

At December 31, ~~2019~~2020 and June 30, ~~2020,~~2021, the carrying value of the Company’s franchise receivables have been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company ~~reported net~~anticipates that substantially all of its accounts ~~receivable from former franchisees~~receivables reflected on the consolidated balance sheets as of ~~$4.4 million and $4.8 million, respectively, which was net of allowance of $4.3 million at~~ December 31, ~~2019~~2020 and ~~allowance of $4.8 million as of~~ June 30, ~~2020.~~

2021, will be collected. 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 uncollectibility 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 royalty income at the time received.

There were 3,064 franchises/licenses in operation on December 31, ~~2019~~2020 and ~~3,058~~the same number of franchises/licenses were in operation on June 30, ~~2020.~~2021. During the six-month period ended June 30, ~~2020,~~2021 there were 1215 new outlets opened and 1815 outlets closed. In the ordinary course, grocery stores from time to time add ~~the Company's~~our licensed products, remove them and may subsequently re-offer them. Therefore, it is unknown how many of the ~~2,402~~2,404 licensed grocery store units included in the counts above have left the system.

Note 3. The following table sets forth the calculation of basic and diluted earnings per share for the three-month and six-month periods ended June 30, ~~2019:~~

       Three Months Ended June 30, 2019

Income
(Numerator)

Shares
(Denominator)

Per-Share
Amount

Net income
$441,136
  21,742,291
$.02
Effect of dilutive securities



   Options and warrants

  20,849

   Convertible notes
  48,750
  3,900,000

Diluted earnings per share



   Net income
$489,886
  25,663,140
$.02

       Six Months Ended June 30, 2019

Income
(Numerator)

Shares
(Denominator)

Per-Share
Amount

Net income
$917,396
  21,707,300
$.04
Effect of dilutive securities



   Options and warrants

  20,849

   Convertible notes
  97,500
  3,905,525

Diluted earnings per share



   Net income
$1,014,896
  25,633,674
$.04

2021:

	Three Months Ended June 30, 2021
	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income	$	85,165		22,215,512	$	.00
Effect of dilutive securities
Convertible notes		15,625		1,250,000		-
Diluted earnings per share
Net income	$	100,790		23,465,510	$	.00

	Six Months Ended June 30, 2021
	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income	$	912,573		22,215,512	$	.04
Effect of dilutive securities
Convertible notes		31,250		1,250,000		-
Diluted earnings per share
Net income	$	943,823		23,465,512	$	.04

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The following table sets forth the calculation of basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2020:

       Three Months Ended June 30, 2020

Income
(Numerator)

Shares
(Denominator)

Per-Share
Amount

Net income
$695,740
  22,215,512
$.03
Effect of dilutive securities



   Convertible notes
  15,625
  1,250,000

Diluted earnings per share



   Net income
$711,365
  23.465.512
$.03

      Six Months Ended June 30, 2020

Income
(Numerator)

Shares
(Denominator)

Per-Share
Amount

Net income
$440,700
  22,215,512
$.02
Effect of dilutive securities



   Convertible notes
  31,250
  1,250,000

Diluted earnings per share



   Net income
$471,950
  23,465,512
$.02

	Three Months Ended June 30, 2020
	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income	$	695,740		22,215,512	$	.03
Effect of dilutive securities
Convertible notes		15,625		1,250,000		-
Diluted earnings per share
Net income	$	711,365		23,465,512	$	.03

	Six Months Ended June 30, 2020
	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income	$	440,700		22,215,512	$	.02
Effect of dilutive securities
Convertible notes		31,250		1,250,000		-
Diluted earnings per share
Net income	$	471,950		23,465,512	$	.02

Note 4 -Other assets as of June 30, 2020, include security deposits of $15,000, cash surrender value of life insurance in the amount of $199,000 and long-term franchisee receivables in the amount of $4.8 million which is net after a $4.8 million valuation allowance.

Long-term receivable from franchisees represent receivables from approximately 80 different non-traditional franchisees (Noble Roman’s franchises located within a host facility). These receivables originated from a variety of circumstances, including where audits of a number of the non-traditional franchises’ reporting of sales found them to be underreporting their sales and, therefore, underpaying their royalty obligations. In other instances, some franchisees were selling non-Noble Roman’s products under the Noble Roman’s trademark. In addition, some receivables arose from the Company incurring legal fees to enforce the franchise agreements and other collection costs, which adds to the receivables in accordance with the agreements and some of the receivables were generated by early termination of the franchise agreements. These receivables have been classified as long-term since collections are expected to extend over more than a one-year cycle. During the three-month period ended June 30, 2020, all remaining $197,294 of the franchisee receivables which had been classified as short term was transferred to long term.

~~Note 5~~ - On February 7, 2020, the Company entered into a Senior Secured Promissory Note and Warrant Purchase Agreement (the “Agreement”) with Corbel Capital Partners SBIC, L.P. (the “Purchaser”). Pursuant to the Agreement, the Company issued to the Purchaser a senior secured promissory note (the “Senior Note”) in the initial principal amount of $8.0 million. The Company has used ~~or will use~~ 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) to pay debt issuance costs; and (iv) the remaining net proceeds ~~will be used~~ for working capital orand other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations.

The Senior Note bears cash interest of LIBOR, as defined in the Agreement, plus 7.75%. In addition, the Senior Note requires payment-in-kind interest (“PIK Interest”) of 3% per annum, which will be added to the principal amount of the Senior Note. Interest is payable in arrears on the last calendar day of each month. The Senior Note matures on February 7, 2025. The Senior Note does not require any fixed principal payments until February 28, 2023, at which time required monthly payments of principal in the amount of $33,333 begin and continue until maturity. The Senior Note requires the Company to make additional payments on the principal balance of the Senior Note based on its consolidated excess cash flow, as defined in the Agreement.

In conjunction with the borrowing under the Senior Note, the Company issued to the Purchaser a warrant (the “Corbel Warrant”) to purchase up to 2,250,000 shares of Common Stock. The Corbel Warrant entitles the Purchaser 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 $0.57 per share (“Tranche 1”), (ii) 900,000 shares of Common Stock at an exercise price of $0.72 per share (“Tranche 2”),; and (iii) 150,000 shares of Common Stock at an exercise price of $0.97 per share (“Tranche 3”). The ~~Company has the right to require the~~ Purchaser is required to exercise the Corbel Warrant with respect to Tranche 1 if the Common Stock is trading at $1.40 per share or higher for a specified period, and is further required to ~~further require~~ exercise of the Corbel Warrant with respect to Tranche 2 if the Common Stock is trading at $1.50 per share or higher for a specified period. Cashless exercise of the Corbel Warrant is only permitted with respect to Tranche 3. The Purchaser has the right, within six months after the issuance of any shares under the Corbel Warrant, to require the Company to repurchase such shares for cash or for Put Notes (as defined in the applicable loan agreement), at the Company's discretion. The Corbel Warrant expires on the sixth anniversary of the date of its issuance.

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Impact of COVID-19 Pandemic

In the first quarter of 2020, a novel strain of coronavirus (COVID-19) emerged and spread throughout the United States. The World Health Organization recognized COVID-19 as a pandemic in March 2020. In response to the pandemic, the U.S. federal government and various state and local governments, ~~have,~~ among other things, imposed travel and business restrictions, including stay-at-home orders and other guidelines that required restaurants and bars to close or restrict inside dining. The pandemic ~~has~~ resulted in significant, economic volatility, uncertainty and disruption, reduced commercial activity and weakened economic conditions in the regions in which the Company and its franchisees operate.

The pandemic and the governmental response ~~has~~ had a significant adverse impact on the Company, due to, among other things, governmental restrictions, reduced customer traffic, staffing challenges and supply difficulties. All Company-owned Craft Pizza & Pub restaurants are located in the State of Indiana. On March 16, 2020, by order of the Governor of the State of Indiana (the ~~“Governor”~~"Governor"), all restaurants within Indiana were ordered to close for inside dining. Due to the order, all Craft Pizza & Pub restaurants were open for carry-out only through April 30, 2020, primarily through the ~~Company’s~~Company's Pizza Valet system and third-party delivery ~~providers. On~~providers.On May 1, 2020, the Governor issued another order allowing restaurants to be open for inside dining for up to 50% of capacity as of May 11, 2020, and on June 14, 2020 up to 75% of capacity, plus bars ~~may~~were allowed to open up to 50% of capacity, and on July 4, 2020 restaurants and bars were ~~to be~~ allowed to resume at 100% capacity. The Governor delayed the increase in capacity ~~however,~~for a portion of the third quarter of 2020. Ultimately the Governor issued another order ~~delaying the increase in~~to allow 100% capacity for restaurants and bars but required certain social distancing rules which effectively limit capacity to ~~at least July 31, 2020 then further delaying the increase in capacity until at least August 27, 2020.~~much less than 100%. As the duration and scope of the pandemic is uncertain these orders are subject to further modification, which could adversely affect the Company. Further, the Company can provide no assurance the ~~phase-out~~phase out of restrictions will have a positive effect on the ~~Company’s~~Company's business.

~~Several~~

Many other states and municipalities in the United States ~~have~~ also temporarily restricted travel and suspended the operation of dine-in restaurants and other businesses in light of COVID-19, which ~~has~~ negatively affected our franchised operations. Host facilities for our non-traditional franchises ~~have~~were also ~~been~~ adversely impacted by these developments. The uncertainty and disruption in the U.S. economy caused by the pandemic are likely to continue to adversely impact the volume and resources of potential franchisees for both ~~our~~the Company's Craft Pizza & Pub and non-traditional venues.

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 uncollectibility 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 royalty income at the time received.

On April 25, 2020, the Company received a loan of $715,000 under the ~~PPP and, in~~PPP. In accordance with the applicable accounting policy adopted, ~~is being~~the Company accounted for the loan as a government grant and is presented it in the Condensed Consolidated Statement of Operations as a reduction of ~~those~~certain qualifying expenses ~~since the amount was entirely used~~incurred during the three-month period ended June 30, 2020.

The expenses included payroll costs and benefits, interest on mortgage obligations, rent under lease agreements and utilities and other qualifying expenses pursuant to the CARES ACT. On February 19, 2021, the Company received formal notice from the Small Business Administration ("SBA") that the entire $715,000 loan was forgiven in accordance with the provisions of the CARES ACT. On February 5, 2021, the Company received an additional loan of $940,734 under the PPP. In accordance with the applicable accounting policy adopted, the Company accounted for the loan as a government grant and presented it in the Condensed Consolidated Statement of Operations as a reduction of certain qualifying expenses incurred during the three-month period ended March 31, 2021. The expenses included payroll costs and benefits, interest on mortgage obligations, rent under lease agreements and utilities and other qualifying expenses pursuant to the CARES ACT. Because the 2020 PPP loan was applied against relevant expenses in the second quarter of 2020 and the 2021 PPP loan was applied against relevant expenses in the first quarter of 2021, the results of operations by quarter in 2020 and 2021 are of limited comparability. The comparison of results for the six-month periods ended June 30, 2020 and 2021 should still be valid.

Note 65 - The Company evaluated subsequent events through the date the financial statements were issued and filed with SEC. ~~The~~On July23, 2021, the Company signed a 10-year lease for ~~its sixth Company-owned and operated~~an additional Craft Pizza & Pub location onin the north-central Indianapolis area. On July ~~24, 2020~~27, 2021, the Company signed a 10-year lease for ~~future rents of $1.05 million.~~an additional Craft Pizza & Pub location in Franklin, Indiana. There were no other subsequent events that required recognition or disclosure beyond what is disclosed in this report.

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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

General Information

Noble Roman’s, Inc., an Indiana corporation incorporated in 1972, sells and services ~~pizza-focused foodservice~~ franchises and licenses and operates Company-owned foodservice locations for stand-alone restaurants and non-traditional foodservice operations under the trade ~~name~~names “Noble Roman’s Craft Pizza & Pub,” “Noble Roman’s Pizza,” “Noble Roman’s Take-N-Bake,” and “Tuscano’s Italian Style Subs”. It also currently operates one Company-owned non-traditional Noble Roman's Pizza and Tuscano’s Italian Style Subs location in a hospital and five Company-owned Craft Pizza & Pub restaurants with a sixth location under development. The Company's concepts’ feature high quality fresh pizza, pasta and salads along with other related menu items, simple operating systems, fast service times, attractive food costs and overall affordability.

To facilitate growth, the Company began adding Company-owned Craft Pizza & Pub locations to its business plan in 2017 and has now begun franchising Craft Pizza & Pub on a limited basis to qualified multi-unit operators. The Company opened two Craft Pizza & Pub locations in 2017, added two additional locations in 2018 and opened one thus far in 2020 with another one under development expected to open near the end of the third quarter. The Company has plans for additional company-owned locations to open later this year and next year. The first franchised Craft Pizza & Pub opened in May 2019 in Lafayette, Indiana and the second franchised Craft Pizza & Pub opened in November 2019 in Evansville, Indiana. The franchisee of the first franchised location has a second location now under development in Kokomo, Indiana with plans to open late summer of 2020. In addition to growth in the Craft Pizza & Pub venue, since 1997 the Company had concentrated its efforts and resources primarily on franchising and licensing non-traditional locations and has awarded franchise and/or license agreements in all 50 states. That focus on franchising and licensing non-traditional locations is continuing and currently has a significant backlog of franchises sold but not yet opened, combined with an active base of qualified prospects for additional locations, however the current pandemic has slowed that development.

RH Roanoke, Inc. operates a Company-owned non-traditional location in a hospital and Noble Roman’s, Inc. owns and operates five Craft Pizza & Pub locations with another one under development and with plans to add more. The Company intends to use its Craft Pizza & Pub locations as a base to support the franchising and continued future growth of that concept.

Subs.” References in this report to the “Company” ~~and to "Noble Roman's"~~ are to Noble Roman’s, Inc. and its two wholly-owned subsidiaries, Pizzaco, Inc. and RH Roanoke, Inc., unless the context ~~indicates~~requires otherwise.

Pizzaco, Inc. currently does not own any locations and has no income or expense. RH Roanoke, Inc. operates a Company-owned non-traditional location.

The Company has been operating, franchising and licensing Noble Roman’s Pizza operations in a variety of stand-alone and non-traditional locations across the country since 1972. Its first Craft Pizza & Pub location opened in January 2017 as a Company-operated restaurant in a northern suburb of Indianapolis, Indiana. Since then, the Company opened a total of six more Company-operated locations in 2017, 2018 and 2020 with two additional locations now under development. The Company-operated locations serve as the base for what it sees as the potential future growth driver franchising to experienced, multi-unit restaurant operators with a track record of success. In 2019, the Company executed an agreement with the first such operator, Indiana’s largest Dairy Queen franchisee with 19 franchised Dairy Queen locations. The franchisee opened the first franchised Craft Pizza & Pub location in May 2019 and another location in November 2020. In November 2019, another franchisee, with an operations background in McDonald's, opened a Craft Pizza & Pub in Evansville, Indiana.

As discussed below under “Impact of COVID-19 Pandemic” the COVID-19 pandemic materially affected the Company’s business in the past year.

Noble Roman’s Craft Pizza & Pub

Noble Roman's Craft Pizza & Pub is intended to provide a fun, pleasant atmosphere serving pizza and other related menu items, all made to order using fresh ingredients in the view of the customers. In January 2017, the

The Noble Roman’s Craft Pizza & Pub ~~opened its~~utilizes many of the basic elements first ~~Company-owned restaurant~~introduced in ~~Westfield, Indiana,~~1972 but in a ~~prosperous~~modern atmosphere with up-to-date technology and ~~growing community on~~equipment to maximize speed, enhance quality and perpetuate the ~~northwest side of Indianapolis. Since that time four additional Craft Pizza & Pubs have been opened as Company-owned restaurants.~~taste customers love and expect from a Noble Roman’s.

The Noble Roman’s Craft Pizza & Pub is designed to harken back to the Company’s early history when it was known simply as “Pizza Pub.” Like then, and like the new full-service pizza concepts today, ordering takes place at the counter and food runners deliver orders to the dining roomprovides for dine-in guests. The Company believes that Noble Roman’s Craft Pizza & Pub features many enhancements over the current competitive landscape. The restaurant features two styles of hand-crafted, made-from-scratch pizzas with a selection of over 40 different toppings, cheeses and sauces from which to choose. Beer and wine also are featured, with 16 different beers on tap including both national and local craft selections. Wines include 16 ~~high quality,~~ affordably priced options by the bottle or glass in a range of varietals. Beer and wine service is provided at the bar and throughout the dining room.

The ~~pizza offerings feature Noble Roman’s traditional hand-crafted thinner crust as well as its signature deep-dish Sicilian crust. After extensive research and development,~~Company designed the system ~~has been designed~~ to enable fast cook times, with oven speeds running approximately 2.5 minutes for traditional ~~pies~~pizzas and 5.75 minutes for Sicilian ~~pies.~~pizzas. Traditional pizza favorites such as pepperoni are options on the menu but also offered is a selection of Craft Pizza & Pub original ~~creations like "Swims with the Fishes" and "Pizza Margherita".~~specialty pizza creations. The menu also features a selection of contemporary and fresh, made-to-order salads and fresh-cooked pasta. ~~In addition, the~~The menu ~~includes~~also incorporates baked ~~subs,~~sub sandwiches, hand-sauced wings and a selection of desserts, as well as Noble Roman’s famous Breadsticks with Spicy Cheese ~~Sauce.~~

Sauce, most of which has been offered in its locations since 1972.

Additional enhancements include a glass enclosed “Dough Room” where Noble Roman’s Dough Masters hand make all pizza and breadstick dough from scratch in customer view. Also in the dining room is a “Dust & Drizzle Station” where guests can customize their pizzas after they are baked with a variety of ~~condiments~~toppings and drizzles, such as rosemary-infused olive oil, honey and Italian spices. Kids and adults enjoy Noble Roman’s self-serve root beer tap, which is also part of a special menu for customers 12 and younger. Throughout the dining room and the bar area there are ~~a large number of~~many giant screen television monitors for sports and the nostalgic black and white shorts historically featured in Noble ~~Roman’s earlier days.~~

Roman’s.

The Company designed its new curbside service for carry-out customers, called “Pizza Valet Service,” to create added value and convenience. With Pizza Valet Service, customers place orders ahead, drive into the restaurant’s reserved valet parking spaces and have their pizza run to their vehicle by specially uniformed pizza valets. Customers who pay when they place their orders are able to drive up and leave with their order very quickly without stepping out of their vehicle. For those who choose to pay after they arrive, pizza valets can take credit card payments on their mobile payment devices right at the customer's vehicle. With the fast baking times, the entire experience, from order to pick-up can take as little as 12 minutes.

Noble Roman’s Pizza ~~for~~For Non-Traditional Locations

~~Noble Roman's franchised and licensed~~

In 1997, the Company started franchising non-traditional locations ~~are designed to bring high-quality, pizza-focused foodservice into underlying establishments~~(a Noble Roman’s pizza operation within some other business or activity that ~~have a captive audience or high customer counts associated with their business. Examples of these venues include~~had existing traffic) such as entertainment facilities, hospitals, convenience stores ~~hospitals, entertainment facilities, military bases, bowling centers~~ and other ~~similar~~types of facilities. ~~Noble Roman's, for non-traditional~~These locations ~~range in scope from relatively small operations focused on quick meals~~utilize the two pizza styles the Company started with, along with its great tasting, high quality ingredients and ~~impulse food purchases to elaborate, full-scale restaurant operations depending on the facility and the goals of the individual franchisee or licensee.~~

menu extensions.

The hallmark of Noble Roman’s Pizza for non-traditional locations is “Superior quality that our customers can taste.” Every ingredient and process has been designed with a view to produce superior results.

●

A fully-prepared pizza crust that captures the made-from-scratch pizzeria flavor which gets delivered to non-traditional locations in a shelf-stable condition so that dough handling is no longer an impediment to a consistent product, which otherwise is a challenge in non-traditional locations.

●

~~Fresh packed, uncondensed and never pre-cooked sauce made with secret spices and vine-ripened tomatoes in all venues.~~

●

~~100% real cheese blended from mozzarella and Muenster, with no soy additives or extenders.~~

●

~~100% real meat toppings, with no additives or extenders, a distinction compared to many pizza concepts.~~

●

~~Vegetable and mushroom toppings are sliced and delivered fresh, never canned.~~

●

~~An extended product line that includes breadsticks and cheesy stix with dip, pasta, baked sandwiches, salads, wings and a line of breakfast products.~~

●

The fully-prepared crust also forms the basis for the Company's Take-N-Bake pizza for use as an add-on component for its non-traditional franchise base as well as an offering for its grocery store license venue.

~~Tuscano’s Italian Style Subs~~

Tuscano’s Italian Style Subs is a separate non-traditional location concept that focuses on sub sandwich menu items but only in locations that also have a Noble Roman’s franchise. The ongoing royalty for a Tuscano’s franchise is identical to that charged for a Noble Roman’s Pizza franchise.

	·	A fully-prepared pizza crust that captures the made-from-scratch pizzeria flavor which gets delivered to non-traditional locations in a shelf-stable condition so that dough handling is no longer an impediment to a consistent product, which otherwise is a challenge in non-traditional locations.

	·	Fresh packed, uncondensed and never cooked sauce made with secret spices, parmesan cheese and vine-ripened tomatoes in all venues.

	·	100% real cheese blended from mozzarella and Muenster, with no soy additives or extenders.

	·	100% real meat toppings, with no additives or extenders, a distinction compared to many pizza concepts.

	·	Vegetable and mushroom toppings are sliced and delivered fresh, never canned.

	·	An extended product line that includes breadsticks and cheesy stix with dip, pasta, baked sandwiches, salads, wings and a line of breakfast products.

	·	The fully-prepared crust also forms the basis for the Company’s Take-N-Bake pizza for use as an add-on component for its non-traditional franchise base as well as an offering for its grocery store license venue.

Business Strategy

The Company is focused on revenue expansion while continuing to minimize ~~overhead and other costs.~~corporate-level overhead. To accomplish this the Company will continue developing, owning and operating ~~a core of~~ Craft Pizza & Pub locations and ~~develop what it believes~~franchising to ~~be a large growth opportunity by franchising with~~ qualified multi-unit franchisees. At the same time, the Company will continue to focus on franchising/licensing for non-traditional locations ~~especially~~by franchising primarily to convenience stores and entertainment centers.

The initial franchise fees are as follows:

Non-Traditional Except Hospitals

Non-Traditional

Hospitals

Traditional

Stand-Alone

Noble Roman’s Pizza or Craft Pizza & Pub

7,500

10,000

30,000

(1)

____________

(1) With the sale of multiple traditional stand-alone franchises to a single franchisee, the franchise fee for the first unit is $30,000, the franchise fee for the second unit is $25,000 and the franchise fee for the third unit and any additional unit is $20,000.

The franchise fees are paid upon signing the franchise agreement and, when paid, are non-refundable in consideration of the administration and other expenses incurred by the Company in granting the franchises and for the lost and/or deferred opportunities to grant such franchises to any other party.

The Company’s proprietary ingredients are manufactured pursuant to the Company’s recipes and formulas by third-party manufacturers under contracts between the Company and its various manufacturers. These contracts require the manufacturers to produce ingredients meeting the Company’s specifications and to sell them to Company-approved distributors at prices negotiated between the Company and the manufacturer.

The Company utilizes distributors it has strategically identified across the United States. The distributor agreements require the distributors to maintain adequate inventories of all ingredients necessary to meet the needs of the Company’s franchisees and licensees in their distribution areas for weekly deliveries.

Business Operations

Distribution

The Company’s proprietary ingredients are manufactured pursuant to the Company’s recipes and specifications by third-party manufacturers under contracts between the Company and its various manufacturers. These contracts require the manufacturers to produce ingredients meeting the Company’s specifications and to sell them to Company-approved third-party distributors at prices negotiated between the Company and the manufacturer.

The Company has third-party distributors strategically located throughout the United States. The agreements require the distributors to maintain adequate inventories of all ingredients necessary to meet the needs of the Company’s franchisees and licensees in their distribution areas for weekly deliveries to the franchisee/licensee locations and to its grocery store distributors in their respective territories. Each of the primary distributors purchases the ingredients from the manufacturers at prices negotiated between the Company and the manufacturers, but under payment terms agreed upon by the manufacturers and the distributors, and distributes the ingredients to the franchisee/licensee at a price determined by the distributor agreement. Payment terms to the distributor are agreed upon between each franchisee/licensee and the respective distributor. In addition, the Company has agreements with various grocery store distributors located in parts of the country which agree to buy the Company’s ingredients from one of the Company’s primary distributors and to distribute those ingredients only to their grocery store customers who have signed license agreements with the Company.

~~Franchising~~

~~The Company sells franchises for both non-traditional and traditional locations.~~

~~The initial franchise fees are as follows:~~

Franchise Format

Non-Traditional, Except Hospitals

Hospitals

Craft Pizza
& Pub

Noble Roman’s Pizza
$7,500
$10,000
$30,000(1)

~~Licensing~~

Noble Roman’s Take-n-Bake Pizza licenses for grocery stores are governed by a supply agreement. The supply agreement generally requires the licensee to: (1) purchase proprietary ingredients only from a Noble Roman’s-approved distributor; (2) assemble the products using only Noble Roman’s approved ingredients and recipes; and (3) display products in a manner approved by Noble Roman’s using Noble Roman’s point-of-sale marketing materials. Pursuant to the distributor agreements, the primary distributors place an additional mark-up, as determined by the Company, above their normal selling price on the key ingredients as a fee for the Company in lieu of royalty. The distributors agree to segregate this additional mark-up upon invoicing the licensee or grocery store distributor, to hold the fees in trust for the Company and to remit them to the Company within ten days after the end of each month.

Financial Summary

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates. The Company periodically evaluates the carrying value of its assets, including property, equipment and related costs, accounts receivable and deferred tax assets, to assess whether any impairment indications are present due to (among other factors) recurring operating losses, significant adverse legal developments, competition, changes in demand for the Company’s products or changes in the business climate which affect the recovery of recorded value. If any impairment of an individual asset is evident, a charge will be provided to reduce the carrying value to its estimated fair value.

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

  2019

  2020

  2019

  2020

Revenue
$1,329,465
  100%
$1,406,865
  100%
$2,472,079
  100%
$2,499,813
  100%
Cost of sales
  278,048
  20.9
  279,037
  19.8
  515,723
  20.8
  514,629
  20.6
Salaries and wages
  379,695
  28.6
  36,781
  2.6
  745,676
  30.2
  355,305
  14.2
Facility cost including rent, common area and utilities
  209,093
  15.7
  185,576
  13.2
  409,700
  16.6
  388,356
  15.5
Packaging
  35,473
  2.7
  45,126
  3.2
  66,790
  2.7
  75,379
  3.0
Delivery fees
  21,392
  1.6
  73,131
  5.2
  35,457
  1.4
  108,330
  4.3
All other operating expenses
  197,233
  14.8
  184,689
  11.0
  358,507
  14.5
  334,370
  13.4
Total expenses
  1,120,934
  84.3
  804,340
  57.2
  2,131,853
  86.2
  1,776,369
  71.1
Margin contribution
$208,531
  15.7%
  602,525
  42.8
$340,226
  13.8%
$723,444
  28.9

	Three Months ended June 30,								Six Months ended June 30,
Description	2020				2021				2020				2021
Revenue	$	1,406,865	100	%	$	2,264,739	100	%	$	2,499,813	100	%	$	4,373,436	100	%
Cost of sales		279,037	19.8			472,307	20.9			514,629	20.6			910,318	20.8
Salaries and wages		36,781	2.6			642,302	28.4			355,305	14.2			871,251	19.9
Facility cost including rent, common area and utilities		185,576	13.2			340,368	15.0			388,356	15.5			454,752	10.4
Packaging		45,126	3.2			57,702	2.5			75,379	3.0			114,399	2.6
Delivery fees		73,131	5.2			91,972	4.1			108,330	4.3			186,217	4.3
All other operating expenses		184,689	11.0			331,093	14.6			334,370	13.4			627,701	14.4
Total expenses		804,340	57.2			1,935,744	85.5			1,776,369	71.1			3,164,638	72.4
Margin contribution	$	602,525	42.8	%	$	328,995	14.5	%	$	723,444	28.9	%	$	1,208,798	27.6	%

Margin contribution from this venue was decreased ~~$5,873~~$8,594 for the six-month period ended June 30, 2021 due to non-cash expense related to the adoption of ~~ASU~~Accounting Standards Update 2016-02 accounting for lease which became effective after January 1, 2019 for publicly reporting companies.

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

     Three Months ended June 30,

     Six Months ended June 30,

Description

  2019

  2020

  2019

  2020

Royalties and fees franchising
$1,335,297
  82.4%
$914,831
  84.1%
$2,622,475
  81.6%
$2,192,932
  85.8%
Royalties and fees grocery
  284,911
  17.6
  173,513
  15.9
  590,747
  18.4
  362,791
  14.2
Total royalties and fees revenue
  1,620,208
  100.0
  1,088,344
  100.0
  3,213,222
  100.0
  2,555,723
  100.0
Salaries and wages
  175,789
  10.8
  19, 147
  1.8
  371,415
  11.6
  215,196
  8.4
Trade show expense
  104,906
  6.5
  105,000
  9.6
  210,000
  6.5
  210,000
  8.2
Insurance
  65,768
  4.0
  37,551
  3.5
  175,692
  5.5
  123,977
  4.9
Travel and auto
  27,129
  1.7
  18,322
  1.7
  54,678
  1.7
  46,770
  1.9
All other operating expenses
  171,222
  10.6
  87,608
  8.0
  227,741
  7.1
  162,041
  6.3
Total expenses
  544,814
  33.6
  267,628
  24.6
  1,039,526
  32.4
  757,984
  29.7
Margin contribution
$1,075,394
  66.4%
$820,716
  75.4%
$2,173,696
  67.6%
$1,797,739
  70.3%

	Three Months ended June 30,								Six Months ended June 30,
Description	2020				2021				2020				2021
Royalties and fees franchising	$	914,831	84.1	%	$	1,046,037	87.2	%	$	2,192,932	85.8	%	$	1,936,091	85.9	%
Royalties and fees grocery		173,513	15.9			153,223	12.8			362,791	14.2			317,129	14.1
Total royalties and fees revenue		1,088,344	100.0			1,199,260	100.0			2,555,723	100.0			2,253,220	100.0
Salaries and wages		19,147	1.8			208,305	17.4			215,196	8.4			296,551	13.2
Trade show expense		105,000	9.6			84,000	7.0			210,000	8.2			189,000	8.4
Insurance		37,551	3.5			89,408	7.5			123,977	4.9			151,806	6.7
Travel and auto		18,322	1.7			21,914	1.8			46,770	1.9			38,284	1.7
All other operating expenses		87,608	8.0			78,682	6.6			162,041	6.3			146,033	6.5
Total expenses		267,628	24.6			482,309	40.2			757,984	29.7			821,674	36.5
Margin contribution	$	820,716	75.4	%	$	716,951	59.8	%	$	1,797,739	70.3	%	$	1,431,546	63.5	%

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

    2019

   2020

    2019

    2020

Revenue
$160,020
  100%
$111,433
  100%
$330,522
  100%
$266,117
  100.0%
Cost of sales
  62,741
  39.2
  44,786
  40.2
  126,688
  38.3
  104,348
  39.2
Salaries and wages
  54,041
  33.8
  4,118
  3.7
  107,833
  32.6
  60,374
  22.7
Rent
  15,163
  9.5
  10,707
  9.6
  31,329
  9.5
  25,417
  9.6
Packaging
  4,629
  2.9
  3,163
  2.8
  9,508
  2.9
  7,333
  2.8
All other operating expenses
  16,535
  10.3
  14,209
  12.8
  31,460
  9.5
  31,754
  11.9
Total expenses
  153,109
  95.7
  76,983
  69.1
  306,818
  92.8
  229,226
  86.1
Margin contribution
$6,911
  4.3%
$34,450
  30.9%
$23,704
  7.2%
$36,891
  13.9%

	Three Months ended June 30,									Six Months ended June 30,
Description	2020				2021					2020				2021
Revenue	$	111,433	100	%	$	117,197		100	%	$	266,117	100	%	$	233,301	100	%
Cost of sales		44,786	40.2			42,328		36.1			104,348	39.2			86,357	37.0
Salaries and wages		4,118	3.7			48,301		41.2			60,374	22.7			65,682	28.2
Rent		10,707	9.6			11,542		9.8			25,417	9.6			22,858	9.8
Packaging		3,163	2.8			3,572		3.0			7,333	2.8			6,842	2.9
All other operating expenses		14,209	12.8			12,916		11.0			31,754	11.9			26,074	11.2
Total expenses		76,983	69.1			118,659		101.2			229,226	86.1			207,813	89.1
Margin contribution	$	34,450	30.9	%	$	(1,462	)	(1.2	)%	$	36,891	13.9	%	$	25,488	10.9

Results of Operations

Company-Owned Craft Pizza & Pub

The revenue from this venue ~~grew~~increased from ~~$1.33~~$1.41 million to ~~$1.41~~$2.26 million and from ~~$2.47~~$2.50 million to ~~$2.50~~$4.37 million for the respective three-month and six-month periods ended June 30, ~~2020~~2021, compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. Revenue was increased by opening an additional Craft Pizza & Pub ~~restaurant on~~restaurants in March, ~~25,~~October and November 2020, respectively, but that increase was partially offset by the Governor of the State of Indiana issuing an order on March 16, 2020 in response to the COVID-19 pandemic closing all dining rooms for inside dining for an indefinite period of time but allowed carry-out and delivery. Most but not all, of the inside dining revenue that was lost from the closure of the dining rooms was made up through our Pizza Valet service and outside delivery service.

Cost of sales ~~improved~~increased to 20.9% and 20.8% from 19.8% and 20.6% ~~from 20.9% and 20.8%~~, respectively, for the three-month and six-month periods ended June 30, ~~2020~~2021 compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. This ~~improvement~~increase was the result of commodity price increases partially offset by efficiency ~~gained~~gain as the restaurants ~~matured and as the staff gained experience.~~

matured.

Salaries and wages ~~decreased~~were 28.4% and 19.9% compared to 2.6% and 14.2% ~~from 28.6% and 30.2%~~ for the respective three-month and six-month periods ended June 30, ~~2020~~2021 compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. The primary reason for the ~~decrease~~fluctuation was the PPP loan/grant was ~~first~~ used ~~for reimbursing~~in part to reimburse the Company for payroll costs in the second quarter of 2020 in the amount of $330,032 for retaining employees and the second PPP loan/grant was used in part to reimburse the Company for payroll costs during the first quarter of 2021 in the amount of $370,832 for retaining employees. In addition, ~~this improvement was the result of~~efficiency improved ~~efficiency~~in 2021 compared to 2020 as the newer restaurants matured ~~and as the staff gained experience~~ and was partially the result of all of the dining rooms being closed by order of the Governor on March 16, 2020. During the period of closure the restaurants continued to use Pizza Valet service for carry-out which decreased the labor requirements to a greater extent in percentage terms than the sales were reduced by the lack of dining room service.

Gross margin contribution ~~increased from 15.7%~~was 14.5% and 27.6% compared to 42.8% and ~~from 13.8% to~~ 28.9% for the three-month and six-month periods, respectfully, compared to the ~~comparable~~corresponding periods last year. This ~~significant increase~~fluctuation is largely the result of the PPP loan/grant offsetting salaries and wages and, to a lesser extent, reduction in other ~~costs.~~costs during the second quarter of 2020 while the second PPP loan offset salaries and wages and, to a lesser extent, reduction in other costs during the first quarter in 2021. Overall expenses for this venue ~~decreased~~increased from ~~84.3%~~71.1% to ~~57.2% and from 86.2% to 71.1%~~72.4% for the ~~three-month~~six-month period in 2021 compared to 2020. Cost of sales increased to 20.8% from 20.6%, and facility cost decreased to 10.4% from 15.5% for the six-month ~~periods, respectfully,~~period in 2021 compared to the ~~comparable periods~~corresponding period last year. Cost of sales decreased from 20.9% to 19.8% and from 20.8% to 20.6% plus facility cost decreased from 15.7% to 13.2% and from 16.6% to 15.5% for the three-month and six-month periods, respectfully, compared to the comparable periods last year.

Franchising

Total revenue from ~~this venue decreased to~~franchising activities increased from $1.1 million to $1.2 million and ~~$2.6~~decreased from $2.56 million to $2.25 million in the respective three-month and six-month periods ended June 30, ~~2020 from $1.6 million and $3.2 million for~~2021 compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. Royalties and fees from franchising ~~decreased~~increased from $915,000 to ~~$915,000 and $2.2 million from $1.3~~$1.05 million and ~~$2.6~~decreased from $2.19 million to $1.94 million for the ~~comparable~~three-month and six-month periods ended June 30, 2021 compared to the corresponding periods in ~~2019.~~2020. These ~~decreases also~~changes reflected a growth in royalties and fees for franchising in the most recent quarter and a continuation of gradual decreases in the fees from grocery store take-n-bake, ~~decreasing~~which decreased to $153,000 from $173,000 and ~~$363,000~~to $317,000 from ~~$285,000 and $591,000~~$363,000 for the three-month and six-month periods, respectively, compared to the ~~comparable~~corresponding periods in ~~2019.~~

2020.

The ~~decreases~~increase in fees from franchising ~~were~~during the ~~result~~second quarter of 2021 reflected a slow improvement from the significant impact of the pandemic which caused several of the locations to be temporarily closed during 2020 and the ~~second quarter.~~first quarter of 2021. The decreases in grocery store take-n-bake were a result of the Company’s focus away from grocery stores to franchising because of the strong economic conditions prior to the COVID-19 pandemic and due to the pandemic creating ~~rush~~increased demand on grocery stores with minimal staff which ~~did not have sufficient~~limited their resources available to ~~maintain assembling~~assemble pizzas for take-n-bake.

Salaries and wages, trade show expense, insurance and other operating costs ~~decreased~~increased from ~~33.6%~~1.8% to ~~24.6%~~17.4% and from ~~32.4%~~8.4% to ~~29.7%~~13.2% for the three-month and six-month periods, respectively, compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. These ~~reductions~~fluctuations significantly relate to the first PPP loan/grant ~~through~~occurring in the second quarter of 2020 and the second PPP loan/grant occurring in the first quarter of 2021 which partially ~~reimbursing~~reimbursed the Company for its payroll costs during ~~that period. In January 2019, the Company reviewed this venue in depth~~those periods.

Margin decreased from 75.4% to ~~find ways to minimize costs and accomplish its objectives with fewer people and lower costs in general. These efforts are reflected in the gross margin increases.~~

~~Gross margin increased to 66.4% to 75.4%~~59.8% and from ~~67.6%~~70.3% to ~~70.3%~~63.5% for the three-month and six-month periods, respectively, compared to the ~~comparable~~corresponding periods in ~~2019. As indicated in~~2020. These fluctuations were largely the ~~previous paragraph, these increased margins reflect the partial reimbursement of the Company’s payroll costs through the PPP and partially as a~~ result of the ~~Company's in-depth review~~first PPP loan/grant occurring in the second quarter of ~~its operations~~2020 and the second PPP loan/grant occurring in the first quarter of 2021. This grant money reduced several of the qualifying expenses during those respective quarters. Secondarily, the decrease in the six-month margin from 70.3% to ~~find ways~~63.5% was primarily the result of the franchising volume being down due to ~~minimize costs and still accomplish its mission.~~

the pandemic in certain states worse than other states.

Company-Owned Non-Traditional Locations

Gross revenue from this venue increased from $111,000 to $117,000 and decreased from ~~$160,000~~$266,000 to ~~$111,000 and from $331,000 to $266,000~~$233,000 for the respective three-month and six-month periods ended June 30, ~~2020~~2021 compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. The primary reason for ~~these decreases~~the increase for the most recent three months was the ~~restriction~~withdrawal of some of the restrictions placed on hospital locations asand the reason for the decrease in the six-month period was a result of the COVID-19 pandemic whereby hospitals were restricted from having outside visitors and staff inside the hospital was restricted from going from one area of the hospital to another. The Company does not intend to operate any more Company-owned non-traditional locations except the one location that it is currently operating.

Total expenses increased from $77,000 to $119,000 and decreased from ~~$153,000 and $77,000 and $307,000~~$229,000 to ~~$229,000~~$208,000 for the three-month and six-month periods ended June 30, ~~2020~~2021 compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. The primary reason for ~~these decreases~~the increase in the three-month period was ~~restrictions on hospitals resulting~~$47,000 reimbursed expenses from the ~~COVID-19 pandemic.~~

first PPP loan/grant in the second quarter of 2020, while a decrease in the six-month period was due to the second PPP loan/grant in the first quarter of 2021 reimbursing the Company for $29,000 of its expenses in the first quarter of 2021.

Depreciation and amortization increased from ~~$76,446~~$98,279 to ~~$98,279~~$142,133 and ~~decreased~~ from ~~$170,045~~$164,226 to ~~$164,226~~$306,849 for three-month and six-month periods ended June 30, ~~2020~~2021 compared to the corresponding periods in ~~2019.~~2020. Depreciation increased as a result of opening additional restaurants in March, October and November 2020, in addition to expensing certain preopening costs in the ~~current quarter due to the opening~~amount of ~~the Brownsburg location in March 2020.~~

$117,991.

General and administrative expenses increased from $344,000 to $482,000 and decreased from ~~$425,000~~$794,000 to ~~$344,000 and from $841,000 to $794,000~~$780,000 for the three-month and six-month periods ended June 30, ~~2020~~2021 compared to the corresponding periods in ~~2019. A significant~~2020. The reason for the ~~decreases~~fluctuation was ~~the grant~~a partial reimbursement of certain qualifying expenses through the first PPP ~~partially reimbursing~~loan/grant in the ~~Company for its payroll costs during that period.~~

second quarter of 2020 and a partial reimbursement of certain qualifying expenses through the second PPP loan/grant in the first quarter of 2021.

Operating income ~~increased to~~decreased from $1.02 million ~~from $801,000~~to $424,000 and ~~increased to~~ $1.61 million ~~from $1.55~~to $1.59 million for the respective three-month and six-month periods ended June 30, ~~2020~~2021 compared to the corresponding periods in ~~2019. A significant~~2020. The reason for the ~~increase~~fluctuation was the Company received its first PPP loan/grant of $715,000 in the second quarter ~~was~~of 2020 and received a second PPP loan/grant in the ~~grant through~~amount of $940,000 in the ~~PPP partially reimbursing the Company for its payroll costs during a portion~~first quarter of ~~the second quarter, partially offset by the temporary closing of some of the non-traditional franchises due to COVID-19.~~

2021.

Interest expense increased from $323,000 to ~~$323,000~~$339,000 and decreased from ~~$220,000 and to~~ $1.25 million ~~from $347,000~~to $673,000 for the respective three-month and six-month periods ended June 30, ~~2020~~2021 compared to the ~~comparable~~corresponding periods in ~~2019.~~2020. The primary reason for the ~~increases~~decrease in the six-month period of 2021 compared to 2020 was a result of the financing that occurred in February 2020 resulting in non-cash write-offs of the unamortized original loan cost for ~~both First Financial Bank~~the former bank loan that the Company refinanced and the private placement sub-debt, which in the aggregate was ~~$658,000~~$658,000. Interest increased in both the three-month and ~~in addition,~~six-month periods because of the non-cash PIK interest expense which adds to the principal amount of ~~$61,000 in~~ the ~~three-month period ending June 30, 2020 and $97,000 for the six-month period ended June 30, 2020.~~

Corbel loan outstanding.

Net income before income tax decreased from $696,000 to $85,000 and increased from $359,000 to ~~$696,000 from $580,000 and decreased to $359,000 from $1.21 million~~$913,000 for the respective three-month and six-month periods ended June 30, ~~2020~~2021 compared to the corresponding periods in ~~2019.~~2020. The ~~three-month results were aided by~~primary reason for the fluctuation was the Company’s receipt of a reimbursement of certain expenses during the second quarter of 2020 from the first PPP loan/grant ~~through~~and reimbursement of certain expenses during the first quarter of 2021 from the second PPP ~~partially reimbursing~~loan/grant. In addition, the ~~Company for its payroll costs~~Company-operated Craft Pizza & Pub locations generated improved profit contributions as a result of opening additional restaurants in March, October and November 2020, which was partially offset by lower margins from franchising due to the ~~lowering of income from non-traditional locations because of temporary closing some of those locations because of COVID-19. The six-month period decrease was substantially because~~restrictions created by the pandemic in various parts of the ~~non-cash write-off of unamortized loan costs of the Company’s previous debts and the non-cash expense from the PIK interest cost.~~

Due to the factors discussed above, net income increased to $696,000 from $441,000 and decreased to $441,000 from $917,000 for the respective three-month and six-month periods ended June 30, 2020 compared to the corresponding periods in 2019. country.

Income tax ~~expense is~~for all periods was not ~~significant in~~material since the ~~second quarter as the benefit from the~~partial reimbursement of certain expenses in both years by the two PPP loans/grants is ~~non-taxable as designated in the CARES Act.~~

non-taxable.

Liquidity and Capital Resources

The Company’s strategy is to grow its business by concentrating on franchising/licensing non-traditional locations, franchising its updated stand-alone concept, Craft Pizza & Pub, and operating a limited number of Company-owned Craft Pizza & Pub restaurants. The Company added new Company-operated Craft Pizza & Pub locations in January and November of 2017, January and June of 2018 and March, October and November of 2020.

The Company intends to open three more Company-owned Craft Pizza & Pub locations in 2021.

During 2018, the Company invested resources (approximately $300,000) to commence franchising of the Craft Pizza & Pub franchise. As of ~~December~~March 31, ~~2019,~~2021, the Company had ~~two~~three Craft Pizza & Pub locations under franchise agreements which were open and one of those franchisees is exploring other locations for an additional franchise ~~location under development and expected to open in late summer of 2020.~~

location.

The Company is operating one non-traditional location in a hospital and has no plans for operating any additional non-traditional locations.

The Company’s current ratio was ~~5.2-to-1~~4.7-to-1 as of June 30, ~~2020~~2021 compared to ~~1.5-to-1~~2.6-to-1 as of December 31, ~~2019.~~2020. The current ratio was improved significantly with the ~~new financing~~PPP grant in February ~~2020 and operations through June 30, 2020.~~

2021.

In January 2017, the Company completed the ~~offering~~private placement of $2.4 million principal amount of ~~convertible, subordinated and unsecured promissory notes (the “Notes”)~~the Notes convertible to common stock at $0.50 per share and ~~warrants (the “Warrants”)~~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. These Notes bear interest at 10% per annum paid quarterly and are convertible to common stock any time prior to maturity at the option of the holder at $0.50 per share. The remaining Warrants to purchase ~~1,775,000~~775,000 shares ~~of common stock at $1.00~~were re-priced to $0.57 per share ~~expired late in 2019.~~

~~In September 2017,~~as a result of the Company entered into a loan agreement (the “Bank Agreement”) with First Financial Bank (the “Bank”). The Bank Agreement provided for a senior credit facility (the “Credit Facility”) from the Bank consisting of: (1) a term loan in the amount of $4.5 million (the “Term Loan”); and (2) a development line of credit of up to $1.6 million (the “Development Line of Credit”) for the opening of three Craft Pizza & Pub restaurants. Borrowings under the Credit Facility bore interest at a variable annual rate up to the London Interbank Offer Rate (“LIBOR”) plus 7.25%. All outstanding amounts owed under the Bank Agreement were due to mature in September 2022, however these amounts were all paid in full from the $8.0 million new financing completed in February 2020.

On February 7, 2020, the Company entered into the Agreement, ~~with Corbel Capital Partners SBIC, L.P. (the “Purchaser”)~~ pursuant to which the Company issued to the ~~Purchaser~~purchaser the Senior Note in the initial principal amount of $8.0 million. The Company has used ~~or will use~~ the net proceeds of the Agreement as follows: (i) $4.2 million ~~was used~~ to repay the Company’s then-existing bank debt which were 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,~~extended; (iii) debt issuance costs; and (iv) the remaining net proceeds ~~will be used~~ for working capital or other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations.

The Senior Note bears cash interest of LIBOR, as defined in the Agreement, plus 7.75%. In addition, the Senior Note requires PIK Interest of 3% per annum, which ~~will be~~is being added to the principal amount of the Senior Note. Interest is payable in arrears on the last calendar day of each month. The Senior Note matures on February 7, 2025. The Senior Note does not require any fixed principal payments until February 28, 2023, at which time required monthly payments of principal in the amount of $33,333 begin and continue until maturity. The Senior Note requires the Company to make additional payments on the principal balance of the Senior Note based on its consolidated excess cash flow, as defined in the Agreement.

On April 25, 2020, the Company received a loan of $715,000 under the PPP. ~~It is probable~~In accordance with the applicable accounting policy adopted, the Company accounted for the loan as a government grant and presented it in the Condensed Consolidated Statement of Operations as a reduction of certain qualifying expenses incurred during the three-month period ended June 30, 2020. On February 19, 2021, the Company received formal notice from the SBA that the entire $715,000 loan was forgiven in accordance with the provisions of the CARES ACT which the Company had already treated as a grant because forgiveness was probable.

On February 5, 2021, the Company received an additional loan of $940,734 under the PPP. The Company used the proceeds of this loan for qualifying expenses under the CARES ACT. The Company anticipates this loan will also be forgiven and, therefore, ~~the Company has~~ accounted for it as a government grant. ~~The funds, according to~~In accordance with the ~~provision in the CARES Act,~~Company's accounting policies, those proceeds were used ~~for payroll costs including payroll benefits and other minor costs allowed by~~to offset certain expenses during the ~~act.~~

quarter ended March 31, 2021.

As a result of the financial arrangements described above and the Company’s cash flow projections, the Company believes it will have sufficient cash flow to meet its obligations and to carry out its current business plan. The Company’s cash flow projections for the next two years are primarily based on the Company’s strategy of growing the non-traditional franchising/licensing venues, operating Craft Pizza & Pub locations ~~to open additional Company-owned Craft Pizza & Pub restaurants~~ and pursuing ~~an aggressive~~a franchising program for Craft Pizza & Pub restaurants.

The Company does not anticipate that any of the recently issued pronouncements relating to the Statement of Financial Accounting Standards will have a material impact on its Consolidated Statement of Operations or its Consolidated Balance Sheet.

Forward-Looking Statements

The statements contained above in Management’s Discussion and Analysis 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, the availability of hourly and management labor to adequately staff Company-operated and franchise operations, competitive factors and pricing pressures, accelerating inflation and the cost of labor, food items and supplies, non-renewal of franchise agreements, shifts in market demand, the success of new 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, general economic conditions, changes in demand for the Company’s products or franchises, the Company’s ability to service its loans, the impact of franchise regulation, the success or failure of individual franchisees and changes in prices or supplies of food ingredients and labor as well as the factors discussed under “Risk Factors " contained in the ~~annual report~~Company’s Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2020. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s exposure to interest rate risk relates primarily to its variable-rate debt. As of June 30, ~~2020,~~2021, the Company had outstanding variable interest-bearing debt in the aggregate principal amount of ~~$8.0~~$8.4 million. The Company’s current borrowings are at a variable rate tied to LIBOR plus 7.75% per annum adjusted on a monthly basis. Based on its current debt structure, for each 1% increase in LIBOR the Company would incur increased interest expense of approximately ~~$80,000~~$86,000 over the succeeding 12-month period.

ITEM 4. Controls and Procedures

Based on their evaluation as of the end of the period covered by this report, A. Scott Mobley, the Company’s President and Chief Executive Officer, and Paul W. Mobley, the Company’s Executive Chairman and Chief Financial Officer, have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are effective. There have been no changes in internal controls over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings.

The Company is not involved in ~~any~~ material litigation against it.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

ITEM 6. Exhibits.

Index to Exhibits

Exhibit Number

Description

3.1		Amended Articles of Incorporation of the Registrant, filed as an exhibit to the Registrant’s Amendment No. 1 to the Post-Effective Amendment No. 2 to Registration Statement on Form S-1 filed July 1, 1985 (SEC File No.2-84150), is incorporated herein by reference.

3.2		Amended and Restated By-Laws of the Registrant, as currently in effect, filed as an exhibit to the Registrant’s Form 8-K filed December 23, 2009, is incorporated herein by reference.
3.3
~~3.3~~	Articles of Amendment of the Articles of Incorporation of the Registrant effective February 18, 1992 filed as an exhibit to the Registrant’s Registration Statement on Form SB-2 (SEC File No. 33-66850), ordered effective on October 26, 1993, is incorporated herein by reference.

3.4		Articles of Amendment of the Articles of Incorporation of the Registrant effective May 11, 2000, filed as Annex A and Annex B to the Registrant’s Proxy Statement on Schedule 14A filed March 28, 2000, is incorporated herein by reference.

3.5		Articles of Amendment of the Articles of Incorporation of the Registrant effective April 16, 2001 filed as Exhibit 3.4 to Registrant’s annual report on Form 10-K for the year ended December 31, 2005, is incorporated herein by reference.

3.6		Articles of Amendment of the Articles of Incorporation of the Registrant effective August 23, 2005, filed as Exhibit 3.1 to the Registrant’s current report on Form 8-K filed August 29, 2005, is incorporated herein by reference.

3.7		Articles of Amendment of the Articles of Incorporation of the Registrant effective February 7, 2017, filed as Exhibit 3.7 to the Registrant’s Registration Statement on Form S-1 (SEC File No. 33-217442) filed April 25, 2017, is incorporated herein by reference.
4.1
~~4.1~~	Specimen Common Stock Certificates filed as an exhibit to the Registrant’s Registration Statement on Form S-18 filed October 22, 1982 and ordered effective on December 14, 1982 (SEC File No. 2-79963C), is incorporated herein by reference.

4.2		Warrant to purchase common stock, dated July 1, 2015, filed as Exhibit 10.11 to the Registrant’s Form 10-Q filed on August 11, 2015, is incorporated herein by reference.

4.3		Form of Senior Secured Promissory Note issued by Registrant to Corbel Capital Partners SBIC, L.P. dated February 7, 2020, filed as Exhibit 4.3 to Registrant’s annual report on Form 10-K for the year ended December 31, 2019, is incorporated herein by reference.

4.4		Form of Warrant issued to Corbel Capital Partners SBIC, L.P. dated February 7, 2020, filed as Exhibit 4.4 to Registrant’s annual report on Form 10-K for the year ended December 31, 2019, is incorporated herein by reference.

4.5		Form of Promissory Note under the Paycheck Protection Payment loan issued by Registrant Huntington National Bank dated April 17, 2020, filed as Exhibit 4.5 to Registrant’s quarterly report on Form 10-Q for the period ended March 31, 2020,filed herewith.
4.6		Promissory Note under the Paycheck Protection Program loan issued by Noble Roman's, Inc. to Huntington National Bank dated February 5, 2021 filed as Exhibit 10.1 to Registrant's current report on Form 8-K filed February 8, 2021 is incorporated herein by reference.

10.1*		Employment Agreement with Paul W. Mobley dated January 2, 1999 filed as Exhibit 10.1 to Registrant’s annual report on Form 10-K for the year ended December 31, 2005, is incorporated herein by reference.

10.2*		Employment Agreement with A. Scott Mobley dated January 2, 1999 filed as Exhibit 10.2 to Registrant’s annual report on Form 10-K for the year ended December 31, 2005, is incorporated herein by reference.

10.3		Loan Agreement dated as of September 13, 2017 by and between the Registrant and First Financial, filed as Exhibit 10.1 to the Registrant's Form 8-K filed September 19, 2017, is incorporated herein by reference.

10.4		Term note dated September 13, 2017 to First Financial Bank filed as Exhibit 10.4 to the Registrant's Form 10-Q filed November 14, 2017, is incorporated herein by reference.

10.5		Development line note dated September 13, 2017 to First Financial Bank filed as Exhibit 10.5 to the Registrant's Form 10-Q filed November 14, 2017, is incorporated herein by reference.

10.6		Agreement dated April 8, 2015, by and among the Registrant and the shareholder parties, filed as Exhibit 10.1 to Registrant’s Form 8-K filed on April 8, 2015, is incorporated herein by reference.
10.7
~~10.7~~	Form of 10% Convertible Subordinated Unsecured note filed as Exhibit 10.16 to the Registrant's Form 10-K filed on March 27, 2017, is incorporated herein by reference.

10.8		Form of Redeemable Common Stock Purchase Class A Warrant filed as Exhibit 10.21 to the Registrant's Registration Statement on Form S-1 (SEC File No. 33-217442) on April 25, 2017, is incorporated herein by reference.

10.9		Registration Rights Agreement dated October 13, 2016, by and among the Registrant and the investors signatory thereto, filed as Exhibit 10.22 to the Registrant's Registration Statement on Form S-1 (SEC File No. 33-217442) on April 25, 2017, is incorporated herein by reference.

10.10		First Amendment to the Registration Rights Agreement dated February 13, 2017, by and among the Registrant and the investors signatory thereto, filed as Exhibit 10.23 to the Registrant's Registration Statement on Form S-1 (SEC File No. 33-217442) on April 25, 2017, is incorporated herein by reference.
10.11
~~10.11~~	Senior Secured Note and Warrant Purchase Agreement dated February 7, 2020 by and between the Registrant and Corbel Capital Partners SBIC, L.P., filed as Exhibit 10.11 to Registrant’s annual report on Form 10-K for the year ended December 31, 2019, is incorporated herein by reference.
21.1
~~21.1~~	Subsidiaries of the Registrant filed in the Registrant’s Registration Statement on Form SB-2 (SEC File No. 33-66850) ordered effective on October 26, 1993, is incorporated herein by reference.

31.1		C.E.O. Certification under Rule 13a-14(a)/15d-14(a)

31.2		C.F.O. Certification under Rule 13a-14(a)/15d-14(a)

32.1		C.E.O. Certification under 18 U.S.C. Section 1350
32.2
~~32.2~~	C.F.O. Certification under 18 U.S.C. Section 1350
101
~~101~~	Interactive Financial Data

__________

*Management contract or compensation plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NOBLE ROMAN'S, INC.

Date: August ~~__, 2020~~ 11, 2021	By:	/s/ Paul W. Mobley
		Paul W. Mobley, Executive Chairman
		Chief Financial Officer and Principal
		~~Paul W. Mobley~~ Accounting Officer (Authorized Officer and
		~~Executive Chairman,Chief Financial Officer and~~ ~~Principal~~ ~~Accounting Officer~~ ~~(Authorized Officer and~~ Principal Financial Officer)

Assets	December 31, 2019	June 30, 2020
Current assets:
Cash	$218,132	$1,577,434
Accounts receivable - net	978,408	844,677
Inventories	880,660	852,423
Prepaid expenses	784,650	587,529
Total current assets	2,861,850	3,862,063

Property and equipment:
Equipment	2,899,611	3,151,935
Leasehold improvements	1,187,100	1,571,542
Construction and equipment in progress	374,525	468,476
	4,461,236	5,191,953
Less accumulated depreciation and amortization	1,689,520	1,831,162
Net property and equipment	2,771,716	3,360,791
Deferred tax asset	3,900,221	4,026,815
Deferred contract cost	817,763	808,423
Goodwill	278,466	278,466
Operating lease right of use assets	4,242,416	4,911,306
Other assets including long-term portion of receivables - net	4,232,655	5,068,422
Total assets	$19,105,087	$22,316,286

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of term loan payable to bank	$871,429	$-
Accounts payable and accrued expenses	731,059	397,179
Current portion of operating lease liability	333,763	342,763
Total current liabilities	1,936,251	739,942

Long-term obligations:
Term loans payable to bank (net of current portion)	2,999,275	-
Term loan payable to Corbel	-	7,272,599
Warrant value	-	29,037
Convertible notes payable	1,501,282	562,354
Operating lease liabilities - net of short-term portion	4,016,728	4,735,219
Deferred contract income	817,763	808,423
Total long-term liabilities	9,335,048	13,407,632

Stockholders' equity:
Common stock – no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2019 and as of June 30, 2020)	24,858,311	24,752,535
Accumulated deficit	(17,024,523)	(16,583,823)
Total stockholders' equity	7,833,788	8,168,712
Total liabilities and stockholders’ equity	$19,105,087	$22,316,286

	Three months ended June 30,		Six months ended June 30,
	2019	2020	2019	2020
Revenue:
Restaurant revenue - company-owned Craft Pizza & Pub	$1,329,465	$1,406,865	$2,472,079	$2,499,813
Restaurant revenue - company-owned non-traditional	160,020	111,433	330,522	266,117
Franchising revenue	1,620,208	1,088,344	3,213,222	2,555,723
Administrative fees and other	11,112	3,867	27,731	8,118
Total revenue	3,120,805	2,610,509	6,043,554	5,329,771

Operating expenses:
Restaurant expenses - company-owned Craft Pizza & Pub	1,120,934	804,340	2,131,853	1,776,369
Restaurant expenses - company-owned non-traditional	153,109	76,983	306,818	229,226
Franchising expenses	544,814	267,628	1,039,526	757,984
Total operating expenses	1,818,857	1,148,951	3,478,197	2,763,579

Depreciation and amortization	76,446	98,279	170,045	164,226
General and administrative expenses	424,793	344,374	841,042	793,795
Total expenses	2,320,096	1,591,604	4,489,284	3,721,600
Operating income	800,709	1,018,905	1,554,270	1,608,171

Interest expense	220,268	323,165	347,171	1,249,454
Income before income taxes	580,441	695,740	1,207,099	358,717
Income tax expense (benefit)	139,305	-	289,703	(81,983)
Net income	$441,136	$695,740	$917,396	$440,700



Earnings per share – basic:
Net income before income tax	$.03	$.03	$.06	$.02
Net income	$.02	$.03	$.04	$.02
Weighted average number of common shares outstanding	21,742,291	22,215,512	21,707,300	22,215,512

Diluted earnings per share:

Net income before income tax	$.02	$.03	$.05	$.02
Net income	$.02	$.03	$.04	$.02
Weighted average number of common shares outstanding	25,663,140	23,465,512	25,633,674	23,465,512

	Common Stock Shares Amount		Accumulated Deficit	Total

Six Months Ended June 30, 2020::

Balance at December 31, 2019	22,215,512	$24,858,311	$(17,024,523)	$7,833,788

Net income for six months ended June 30, 2020			440,700	440,700

Unamortized loan origination cost attributable to the 500,000 notes converted to 1,000,000 shares		(116,400)		(116,400)

Amortization of value of employee stock options		10,624	_________	10,624

Balance at June 30, 2020	22,215,512	$24,752,535	$(15,583,823)	$8,168,712

	Three Months Ended June 30, 2019
	Income (Numerator)	Shares (Denominator)	Per-Share Amount
Net income	$441,136	21,742,291	$.02
Effect of dilutive securities
Options and warrants		20,849
Convertible notes	48,750	3,900,000
Diluted earnings per share
Net income	$489,886	25,663,140	$.02

	Six Months Ended June 30, 2019
	Income (Numerator)	Shares (Denominator)	Per-Share Amount
Net income	$917,396	21,707,300	$.04
Effect of dilutive securities
Options and warrants		20,849
Convertible notes	97,500	3,905,525
Diluted earnings per share
Net income	$1,014,896	25,633,674	$.04

Franchise Format	Non-Traditional, Except Hospitals	Hospitals	Craft Pizza & Pub
Noble Roman’s Pizza	$7,500	$10,000	$30,000(1)