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

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. Yes ☒ 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 ☒ 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.

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~~company(as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August ~~5, 2022,~~4, 2023, there were 22,215,512 shares of Common Stock, no par value, outstanding.

The following unaudited condensed consolidated financial statements are included herein:

Assets	December 31, 2021			June 30, 2022			December 31, 2022			June 30, 2023
Current assets:
Cash	$	1,263,513		$	900,289		$	785,522		$	685,977
Accounts receivable – net		904,474			1,032,298
Employee Retention Tax Credit Receivable								-			1,460,444
Accounts receivable - net								824,091			805,924
Inventories		994,085			994,611			997,868			1,005,265
Prepaid expenses		415,309			450,606			424,822			410,710
Total current assets		3,577,381		$	3,377,804			3,032,303			4,368,320

Property and equipment:
Equipment		4,216,246			4,321,336			4,351,558			4,363,377
Leasehold improvements		3,065,644			3,113,898			3,116,030			3,127,880
Construction and equipment in progress		235,051			261,196			63,097			68,858
Property and equipment gross		7,516,941			7,696,430
								7,530,685			7,560,115
Less accumulated depreciation and amortization		2,366,927			2,592,367			2,817,477			3,008,510
Net property and equipment		5,150,014			5,104,063			4,713,208			4,551,605
Deferred tax asset		3,232,406			3,294,319			3,374,841			3,100,651
Deferred contract cost		810,044			864,590			934,036			943,109
Goodwill		278,466			278,466			278,466			278,466
Operating lease right of use assets		6,003,044			6,002,700			5,660,155			5,305,701
Other assets including long-term portion of receivables – net		324,402			398,497
Other assets including long-term portion of receivables-net								350,189			389,641
Total assets	$	19,375,757		$	19,320,439		$	18,343,198		$	18,937,493

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	919,157		$	739,858		$	650,582		$	572,081
Current portion of operating lease liability		656,146			685,306			799,164			799,164
Current portion of Corbel loan payable		0			166,665			866,667			1,000,000
Total current liabilities		1,575,303			1,591,829			2,316,413			2,371,245

Long-term obligations:
Term loan payable to Corbel – net of current portion		7,898,941			7,949,523
Term loan payable to Corbel								7,470,900			7,190,510
Corbel warrant value		29,037			29,037			29,037			29,037
Convertible notes payable		597,229			610,046			622,864			575,000
Operating lease liabilities – net of current portion		5,570,639			5,551,696
Operating lease liabilities - net of short-term portion								5,103,286			4,755,296
Deferred contract income		810,044			864,590			934,036			943,109
Total long-term liabilities		14,905,890			15,004,892			14,160,123			13,492,952

Stockholders’ equity:
Common stock – no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2021 and as of June 30, 2022)		24,791,568			24,807,679
Common stock – no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2022 and as of June 30, 2023)								24,819,736			24,832,525
Accumulated deficit		(21,897,004	)		(22,083,961	)		(22,953,074	)		(21,759,227	)
Total stockholders’ equity		2,894,564			2,723,718			1,866,662			3,073,298
Total liabilities and stockholders’ equity	$	19,375,757		$	19,320,439		$	18,343,198		$	18,937,495

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

	Three months ended June 30,					Six months ended June 30,					Three months ended June 30,					Six months ended June 30,
	2021		2022			2021		2022			2022			2023		2022			2023
Revenue:
Restaurant revenue – company-owned Craft Pizza & Pub	$	2,264,739	$	2,503,363		$	4,373,436	$	4,786,960		$	2,503,363		$	2,373,652	$	4,786,960		$	4,463,994
Restaurant revenue – company-owned non-traditional		117,197		177,115			233,301		310,244
Restaurant revenue –company-owned non-traditional												177,115			236,585		310,244			459,965
Franchising revenue		1,199,260		1,064,363			2,253,220		2,098,608			1,064,363			1,373,533		2,098,608			2,360,875
Administrative fees and other		3,513		5,051			7,069		19,267			5,051			8,674		19,267			15,413
Total revenue		3,584,709		3,749,892			6,867,026		7,215,079			3,749,892			3,992,444		7,215,079			7,300,247

Operating expenses:
Restaurant expenses – company-owned Craft Pizza & Pub		1,935,744		2,162,889			3,164,638		4,221,418			2,162,889			2,025,193		4,221,418			3,940,014
Restaurant expenses – company-owned non-traditional		118,659		169,750			207,813		302,626			169,750			204,150		302,626			325,980
Franchising expenses		482,309		483,240			821,674		944,595
Franchising expenses (benefit)												483,240			436,914		944,595			(432,031	)
Total operating expenses		2,536,712		2,815,879			4,194,125		5,468,639			2,815,879			2,666,257		5,468,639			3,833,963

Depreciation and amortization		142,133		112,687			306,849		225,439			112,687			95,517		225,439			191,033
General and administrative expenses		481,860		539,742			780,449		1,080,274			539,742			526,309		1,080,274			1,045,140
Total expenses		3,160,705		3,468,308			5,281,423		6,774,352			3,468,308			3,288,083		6,774,352			5,070,136
Operating income		424,004		281,584			1,585,603		440,727			281,584			704,361		440,727			2,230,111

Interest expense		338,839		347,717			673,030		689,597			347,717			378,785		689,597			762,074
Income (loss) before income taxes		85,165		(66,133	)		912,573		(248,870	)		(66,133	)		325,576		(248,870	)		1,468,037
Income tax benefit		0		(15,872	)		0		(61,913	)
Income tax (benefit)												(15,872	)		-		(61,913	)		274,190
Net income (loss)	$	85,165	$	(50,261	)	$	912,573	$	(186,957	)	$	(50,261	)	$	325,576	$	(186,957	)	$	1,193,847

Earnings per share – basic:
Net income (loss)	$	0.00	$	0.00		$	0.04	$	(0.01	)	$	0.00		$	0.02	$	(0.01	)	$	0.05
Weighted average number of common shares outstanding		22,215,512		22,215,512			22,215,512		22,215,512			22,215,512			22,215,512		22,215,512			22,215,512

Diluted earnings (loss) per share:

Net income (loss)	$	0.00	$	0.00		$	0.04	$	(0.01	)	$	0.00		$	0.01	$	(0.01	)	$	0.05
Weighted average number of common shares outstanding		23,465,512		23,579,118			23,465,512		23,579,118			23,579,118			23,498,764		23,579,118			23,498,764

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

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

See accompanying 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, ~~2021~~2022 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.

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, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

~~On February 5, 2021,~~The Employee Retention Tax Credit (“ERTC”) is a refundable tax credit that the Company ~~borrowed $940,734 under the Paycheck Protection Program (the “PPP”).~~was eligible to apply for based on qualified wages paid to employees. The ~~funds, according to the provision of~~program was introduced on March 27, 2020 in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”)~~, could be used for~~ to incentivize employers to keep their employees on their payroll ~~costs~~during the pandemic and economic shutdown. The credit applies to all qualified wages, including ~~payroll benefits, interest on mortgage obligations, rent under lease agreements and utilities. Since~~certain health plan expenses, paid during the period in which the operations were fully or partially suspended due to a government shutdown order or where there was significant decline in gross receipts.

During the first quarter of 2023 the Company ~~met all~~determined that it was entitled to an ERTC of $1.718 million and submitted amended federal Form 941 returns for the ~~eligibility requirements to participate~~last three quarters of 2020 and the first two quarters of 2021 for both Noble Roman’s, Inc. (“Noble Roman’s”) and RH Roanoke, Inc. (“Roanoke”) claiming those refunds. The Company recognized an ERTC refund of $1.460 million, net of related expense of $258,000 in the ~~PPP~~first quarter of 2023. During July 2023, the Company received refunds for Roanoke for all five quarters and Noble Roman’s received all three quarters of 2020 and the second quarter of 2021. In total, in July 2023 the Company received payments of $1.16 million plus interest. If the Company receives the amount applied for the first quarter of 2021 for Noble Roman’s, it ~~was probable from~~will have received $1.54 million net of commissions, or about $80,000 more than the ~~beginning that the Company’s PPP borrowing would be forgiven, the Company’s participation~~amount accounted for in the ~~PPP program was accounted for as a government grant. Since the entire amount~~first quarter of the PPP participation was used to pay qualified expenses prior to March 31, 2021, the qualifying expenses are presented herein as a reduction of those related expenses in the quarter ended March 31, 2021.2023.

There have been no other significant changes in the ~~Company's~~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, 2022 are not necessarily indicative of the results to be expected for the full year ending December 31, 2022, especially in light of recent volatility and uncertainty resulting from the coronavirus (“COVID-19) pandemic and the governmental response.

Note 2 – Royalties and fees included initial franchise fees of $237,000 for the three-month period ended June 30, 2023, and $60,000 for the three-month period ended June 30, ~~2022,~~2022. Royalties and ~~$97,000~~fees included equipment commissions of $28,904 for the three-month period ended June 30, ~~2021. Royalties~~2023, and ~~fees included equipment commissions of~~ $20,800 for the three-month period ended June 30, ~~2022, and $13,000 for the three-month period ended June 30, 2021.~~2022. Royalties and fees, including amortized initial franchise fees and equipment commissions, were $1.4 million for the three-month period ended June 30, 2023, and $1.1 million for the three-month period ended June 30, ~~2022, and $1.2 million for the three-month period ended June 30, 2021.~~2022. 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.

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 franchise fees and contract costs initially incurred and paid approximate the relative amortized franchise fees and contract costs for those same periods.

~~The deferred contract income and deferred costs were $864,590 on June 30, 2022.~~

At December 31, ~~2021~~2022 and June 30, ~~2022,~~2023, 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 anticipates that substantially all of its accounts receivables reflected on the consolidated balance sheets as of December 31, ~~2021~~2022 and June 30, ~~2022,~~2023, 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 uncollectability 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 3,069 franchises/licenses in operation on December 31, 2021 and 3,081 franchises/licenses were in operation on June 30, 2022.~~ During the six-month period ended June 30, ~~2022~~2023 there were 1622 new outlets opened and ~~four~~three outlets closed. In the ordinary course, grocery stores from time to time add our licensed products, remove them and may subsequently re-offer them. Therefore, it is unknown how many of the 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, ~~2022:~~2023:

	Three Months Ended June 30, 2022							Three Months Ended June 30, 2023
	Income (Numerator)			Shares (Denominator)		Per-Share Amount		Income		Shares		Per-Share
Net loss	$	(50,261	)		22,215,512	$	0.00
								(Numerator)		(Denominator)		Amount
Net income								$	325,576		22,215,512	$	0.02
Effect of dilutive securities
Convertible notes		15,625			1,250,000				14,375		1,150,000
Dilutive shares		-			113,606				-		133,252

Diluted earnings per share
Net loss (1)	$	(34,640	)		23,579,118	$	0.00
Net income								$	339,951		23,498,764	$	0.01

~~(1) Net loss per share is shown as basic loss per share because the underlying dilutive securities have an anti-dilutive effect.~~

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, ~~2021:~~2022:

	Three Months Ended June 30, 2021						Three Months Ended June 30, 2022
	Income (Numerator)		Shares (Denominator)		Per-Share Amount		Income			Shares		Per-Share
Net income	$	85,165		22,215,512	$	0.00
							(Numerator)			(Denominator)		Amount
Net loss							$	(50,261	)		22,215,512	$	0.00
Effect of dilutive securities
Convertible notes		15,625		1,250,000				15,625			1,250,000
Dilutive shares								-			113,606

Diluted earnings per share
Net income	$	100,790		23,465,510	$	0.00
Net loss (1)							$	(34,640	)		23,579,118	$	0.00

	Six Months Ended June 30, 2021						Six Months Ended June 30, 2022
	Income (Numerator)		Shares (Denominator)		Per-Share Amount		Income			Shares		Per-Share
Net income	$	912,573		22,215,512	$	0.04
							(Numerator)			(Denominator)		Amount
Net loss							$	(186,957	)		22,215,512	$	(0.01	)
Effect of dilutive securities
Convertible notes		31,250		1,250,000				31,250			1,250,000
Dilutive shares								-			113,606

Diluted earnings per share
Net income	$	943,823		23,465,512	$	0.04
Net loss (1)							$	(155,707	)		23,579,118	$	(0.01	)

(1) Net loss per share is shown as basic loss per share because the underlying dilutive securities have an anti-dilutive effect.

Note 4 ~~-On~~– On February 7, 2020, the Company entered into a Senior Secured Promissory Note and Warrant Purchase Agreement ~~(the~~(as amended, the “Agreement”) with Corbel Capital Partners SBIC, L.P. (the “Purchaser” or “Corbel”). 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 the net proceeds of the Agreement as follows: (i) $4.2 million to repay the Company’s then-existing bank debt which was in the original amount of $6.1 million; (ii) $1,275,000 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 for working capital and 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% ~~per annum.~~. In addition, the Senior Note requires payment-in-kind (“PIK”) interest ~~(“PIK Interest”)~~ of 3% per annum, which is 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~~At the end of the third quarter 2022, the Company entered into an amendment to the Agreement changing the required ~~monthly~~ payments of principal beginning in March 2023 from $33,333 per month to $83,333 per month in exchange for lowering the ~~amount of $33,333 begin~~financial covenants and ~~continue until maturity. The Senior Note requires~~eliminating the ~~Company to make additional payments on the principal balance of the Senior Note based on its consolidated~~ excess cash flow requirement. In addition, LIBOR will be replaced with SOFR, as defined in the Agreement. The Senior Note, as amended, requires principal payments of $33,333 in February 2023 and beginning in March 2023 payments of $83,333 per month continuing until maturity.

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 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 exercise 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 Agreement), at the ~~Company's~~Company’s discretion. The Corbel Warrant expires on the sixth anniversary of the date of its issuance.

Note 5- The Company evaluated subsequent events through the date the financial statements were issued and filed with SEC. There were no subsequent events that required recognition or disclosure beyond what is disclosed in this report.

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 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 had a significant adverse impact on the Company, due to, among other things, governmental restrictions, reduced customer traffic, staffing challenges and supply difficulties especially as a result of the emergence of the Omicron and other variants of COVID-19 in late 2021 and early in 2022. Many states and municipalities in the United States, including Indiana where all of the Company-owned Craft Pizza & Pub restaurants are located, have from time to time temporarily restricted travel and suspended the ~~operation~~operations of dine-in restaurants and other businesses in light of COVID-19 which negatively affected the Company’s operations. 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 of restrictions will have a positive effect on the Company’s business.

Host facilities for the Company’s non-traditional franchises were also affected by labor shortages which adversely impacted those developments and in turn slowed the ~~sale~~sales of franchises. 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 the ~~Company's~~Company’s Craft Pizza & Pub and non-traditional venues.

~~On February 5, 2021,~~As described in Note 1 above, the Company applied for and has received ~~an additional loan~~payments in respect 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 toERTC provided by the CARES ~~ACT. Because~~Act enacted to address the ~~$940,734 loan was applied against relevant expenses in~~economic effects of the ~~first quarter 2021, the results of operations for the six-month periods in 2021~~pandemic and ~~2022 are of limited comparability.~~ related shut-down orders imposed on businesses.

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

Noble Roman’s, Inc., an Indiana corporation incorporated in 1972, sells and services franchises and licenses and operates Company-owned ~~foodservice locations for~~ stand-alone restaurants and non-traditional foodservice operations under the trade names “Noble Roman’s Craft Pizza & Pub,” “Noble Roman’s Pizza,” “Noble Roman’s Take-N-Bake,” and “Tuscano’s Italian Style Subs.” References in this report to the “Company” are to Noble Roman’s, Inc. and its ~~two~~ wholly-owned subsidiaries, ~~Pizzaco, Inc. and RH Roanoke, Inc.,~~ unless the context requires otherwise. ~~Pizzaco, Inc. currently does not own any locations and has no income or expense.~~The Company’s only operating subsidiary is RH Roanoke, Inc., which 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 eight more Company-operated locations ~~with two additional locations now~~ in ~~the site procurement stage.~~2017, 2018, 2020 and 2021. The Company-operated locations serve as the base for ~~franchising which~~what it sees as a ~~strong~~significant potential future growth ~~driver.~~driver, including additional Company operated locations and franchising its full-service restaurant format to experienced, multi-unit restaurant operators with a track record of success. In 2019 the Company executed an agreement with the first ~~such~~franchise operator, Indiana’s largest Dairy Queen franchisee with 19 franchised Dairy Queen locations at ~~the~~that time. The franchisee opened the first franchised Craft Pizza ~~&Pub~~& Pub location in May 2019 and another location in November 2020. In November 2019, another franchisee, with an operations background in ~~McDonald's,~~McDonald’s, opened a Craft Pizza & Pub in Evansville, Indiana. In the second quarter of 2022 the Company completed planning and development for a new generation Craft Pizza & Pub which will be smaller, easier to operate and requiring less initial investment, factors which the Company believes could broaden the appeal of the concept to a greater franchising audience.

As discussed ~~above under “Impact of COVID-19 Pandemic”~~elsewhere in this report, the COVID-19 pandemic materially affected the Company’s business and its franchising strategy since the pandemic emerged during the first quarter of 2020.

The Noble Roman’s Craft Pizza & Pub ~~utilizes~~format incorporates many of the basic elements first introduced in 1972 but in a modern atmosphere with up-to-date ~~systems~~baking technology and equipment to maximize speed, enhance quality and perpetuate the taste customers love and expect from a Noble Roman’s.

The Noble Roman’s Craft Pizza & Pub provides for a selection of over 40 different toppings, cheeses and sauces from which to choose. Beer and wine also are featured, with 16 different beers on tap including both national and local craft selections. Wines include 16 affordably priced options by the bottle or glass in a range of varietals. Beer and wine service is provided at the bar and throughout the dining room.

The Company designed the system to enable fast cook times, with oven speeds running approximately 2.5 minutes for traditional pizzas and 5.75 minutes for Sicilian pizzas. ~~Traditional~~Popular pizza favorites such as pepperoni are options on the menu but also offered is a selection of Craft Pizza & Pub original ~~specialty~~ pizza creations. The menu also features a selection of contemporary and fresh, made-to-order salads ~~a salad bar~~ and fresh-cooked pasta. The menu also incorporates baked sub sandwiches, hand-sauced ~~boneless~~ wings and a selection of desserts, as well as Noble Roman’s famous Breadsticks with Spicy Cheese Sauce, most of which have been offered in its locations since 1972. In 2022, new salad bars were rolled out over time across all Company-operated restaurants.

Additional enhancements include a glass enclosed “Dough Room” where Noble Roman’s Dough Masters hand make all pizza and breadstick dough from scratch in customer view. Kids and adults enjoy Noble Roman’s self-serve root beer tap, which is also part of a special menu for customers 12 and younger. Throughout the dining room and the bar area there are many giant screen television monitors for sports and the nostalgic black and white shorts ~~historically~~ featured in Noble ~~Roman’s.~~Roman’s since 1972.

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

In 1997, the Company started franchising non-traditional locations (a Noble Roman’s pizza operation within some other host business or activity ~~that has~~with existing traffic) such as entertainment facilities, hospitals, convenience stores and other types of facilities. These locations utilize the two pizza styles the Company started with in 1972, along with its great tasting, high quality ingredients and menu extensions.

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

The Company is focused on revenue expansion while ~~continuing~~carefully managing corporate-level overhead expenses. The Company refocused its development plans toward selling more non-traditional franchises as a result of the pandemic coming to ~~minimize corporate-level overhead. To accomplish this~~an end and the owners of non-traditional locations becoming more willing to look at expansion options and to invest in their growth. With the sales efforts in the first six months of 2023, the Company ~~will continue developing, owning and operating Craft Pizza & Pub locations and franchising to qualified franchisees. At~~generated 43 new franchised units available for opening. During the ~~same time,~~first six months of 2023, the Company ~~will continue~~opened 22 new locations with the remaining balance of the locations sold not yet open in various stages of development to ~~focus on franchising/licensing~~be opened. In addition, the Company has a significant pipeline of leads and prospects for future non-traditional ~~locations by franchising primarily to convenience stores and entertainment centers.~~ franchise sales.

The initial franchise fees for a Noble Roman’s Pizza non-traditional location or a Craft Pizza & Pub location are as follows:

(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 ~~specifications,~~ recipes orand 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 in areas across the United ~~States.~~States where Company-owned and franchise operations are located. 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.

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

The Company has third-party distributors strategically located throughout the United States. The agreements require the distributors to maintain adequate inventories of all ingredients necessary to meet the needs of the Company’s franchisees and licensees in their distribution areas for weekly deliveries to the franchisee/~~licensee locations and to its grocery store distributors in their respective territories.~~licensee. Each of the primary distributors purchases the ingredients from the manufacturers at prices negotiated between the Company and the manufacturers, but under payment terms agreed upon by the manufacturers and the distributor, and distributes the ingredients to the franchisee/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.

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.present. If any impairment of an individual asset is evident, a charge will be provided to reduce the carrying value to its estimated fair value.

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

	Three months ended June 30,								Six months ended June 30,								Three months ended June 30,								Six months ended June 30,
Description	2021				2022				2021				2022				2022				2023				2022				2023
Revenue	$	2,264,739	100	%	$	2,503,363	100	%	$	4,373,436	100	%	$	4,786,960	100	%	$	2,503,363	100	%	$	2,373,652	100	%	$	4,786,960	100	%	$	4,463,994	100	%
Cost of sales		472,307	20.9			523,135	20.9			910,318	20.8			993,408	20.8			523,135	20.9			476,942	20.1			993,408	20.8			928,300	20.8
Salaries and wages		642,302	28.4			720,537	28.6			871,251	19.9			1,443,494	30.2			720,537	28.6			652,905	27.5			1,443,494	30.2			1,270,369	28.5
Facility cost including rent, common area and utilities		340,368	15.0			406,536	16.2			454,752	10.4			800,233	16.7			406,536	16.2			405,768	17.1			800,233	16.7			810,592	18.2
Packaging		57,702	2.5			85,005	3.4			114,399	2.6			165,743	3.5			85,005	3.4			77,080	3.2			165,743	3.5			149,108	3.3
Delivery fees		91,972	4.1			39,423	1.6			186,217	4.3			76,347	1.6			39,423	1.6			29,095	1.2			76,347	1.6			60,217	1.3
All other operating expenses		331,093	14.6			388,253	15.5			627,701	14.4			742,193	15.5			388,253	15.5			383,402	16.1			742,193	15.5			721,428	16.2
Total expenses		1,935,744	85.5			2,162,889	86.4			3,164,638	72.4			4,221,418	88.2			2,162,889	86.4			2,025,192	85.3			4,221,418	88.2			3,940,014	88.3
Margin contribution	$	328,995	14.5	%	$	340,474	13.6		$	1,208,798	27.6	%	$	565,542	11.8	%	$	340,474	13.6	%	$	348,460	14.7	%	$	565,542	11.8	%	$	523,980	11.7	%

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

	Three months ended June 30,								Six months ended June 30,								Three months ended June 30,								Six months ended June 30,
Description	2021				2022				2021				2022				2022				2023				2022				2023
Total royalties and fees revenue	$	1,199,260	100	%	$	1,064,363	100	%	$	2,253,220	100	%	$	2,098,607	100	%	$	1,064,363	100	%	$	1,373,533	100	%	$	2,098,607	100	%	$	2,360,876		100	%
Salaries and wages		208,305	17.4			216,658	20.4			296,551	13.2			410,254	19.6			216,658	20.4			207,604	15.1			410,254	19.6			430,062		18.2
Trade show expense		84,000	7.0			45,000	4.2			189,000	8.4			135,000	6.4			45,000	4.2			50,920	3.7			135,000	6.4			141,120		6.0
Insurance		89,408	7.5			99,431	9.3			151,806	6.7			195,281	9.3			99,431	9.3			78,711	5.7			195,281	9.3			169,886		7.2
Travel and auto		21,914	1.8			40,002	3.8			38,284	1.7			58,809	2.8			40,002	3.8			26,019	1.9			58,809	2.8			58,149		2.5
All other operating expenses		78,682	6.6			82,149	7.7			146,033	6.5			145,251	6.9
All other operating expenses (benefit)																		82,149	7.7			70,874	5.2			145,251	6.9			(1,234,035	)(1)	(52.3	)
Total expenses		482,309	40.2			483,240	45.4			821,674	36.5			944,595	45.0			483,240	45.4			434,128	31.6			944,595	45.0			(434,818	)	(18.4	)
Margin contribution	$	716,951	59.8	%	$	581,123	54.6	%	$	1,431,546	63.5	%	$	1,154,012	55.0	%	$	581,123	54.6	%	$	939,405	68.4	%	$	1,154,012	55.0	%	$	2,795,693		118.4	%

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

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

	Three months ended June 30,									Six months ended June 30,								Three months ended June 30,								Six months ended June 30,
Description	2021					2022				2021				2022				2022				2023				2022				2023
Revenue(1)	$	117,197		100	%	$	177,115	100	%	$	233,301	100	%	$	310,244	100	%	$	177,115	100	%	$	236,585	100	%	$	310,244	100	%	$	459,965		100	%
Cost of sales		42,328		36.1			71,076	40.1			86,357	37.0			120,945	39.0			71,076	40.1			87,078	36.8			120,945	39.0			172,580		37.5
Salaries and wages		48,301		41.2			60,167	34.0			65,682	28.2			112,541	36.3			60,167	34.0			72,892	30.8			112,541	36.3			145,378		31.6
Rent		11,542		9.8			17,075	9.6			22,858	9.8			29,884	9.6			17,075	9.6			22,760	9.6			29,884	9.6			44,501		9.7
Packaging		3,572		3.0			5,933	3.3			6,842	2.9			10,732	3.4			5,933	3.3			6,014	2.5			10,732	3.4			13,182		2.9
All other operating expenses		12,916		11.0			15,499	8.8			26,074	11.2			28,524	9.2
All other operating expenses (benefit)																			15,499	8.8			15,407	6.5			28,524	9.2			(49,661	)(2)	(10.8	)
Total expenses		118,659		101.2			169,750	95.8			207,813	89.1			302,626	97.5			169,750	95.8			204,150	86.3			302,626	97.5			325,980		70.9
Margin contribution	$	(1,462	)	(1.2	)%	$	7,365	4.2	%	$	25,488	10.9	%	$	7,618	2.5	%	$	7,365	4.2	%	$	32,434	13.7	%	$	7,618	2.5	%	$	133,985		29.1	%

The revenue from this venue ~~increased~~decreased from ~~$2.26~~$2.5 million to ~~$2.50~~$2.4 million and from ~~$4.37~~$4.8 million to ~~$4.79~~$4.5 million for the respective three-month and six-month periods ended June 30, ~~2022,~~2023, compared to the corresponding periods in ~~2021. Revenue~~2022. The revenue for the periods in 2022 reflected relatively high sales from a few of the locations that opened late in the previous year which the Company can experience immediately following the opening of ~~additional Craft Pizza & Pub restaurants in October~~a new location. Also, sales for April and ~~December 2021, respectively, but that increase was partially offset~~May were negatively impacted by the ~~impact of the Omicron variant of COVID-19 especially in January~~economic uncertainty and ~~February 2022.~~ inflation which affected some consumers’ willingness to dine out.

Cost of sales as a percentage of revenue from this venue ~~remained approximately the same at~~decreased from 20.9% ~~and 20.8%, respectively,~~to 20.1% for the three-month period and remained approximately constant at 20.8% for the six-month ~~periods~~period both ended June 30, ~~2022~~2023 compared to the corresponding periods in ~~2021.~~2022. The Company has incurred significant increases in general product ~~cost~~costs but was able to offset that with ~~menu price increases and~~ efficiency gained as staffing levels stabilized and employee experience levels increased. Additionally, the Company promoted a lower food cost item during the month of June, had reduced cheese prices in June and made minor improvements to portioning systems that were in place from late March.

Salaries and wages ~~were 28.6%~~percentage decreased to 27.5% and ~~30.2%~~28.5% for the respective three-month and six-month periods compared to ~~28.4%~~28.6% and ~~19.9%~~30.2% for the corresponding periods in ~~2021.~~2022. The cost of salaries and wages as a percentage of revenue for this venue ~~have increased~~has improved significantly due to the efficiencies gained and implemented and despite the highly competitive environment for ~~available labor caused by the general shortness of available labor~~both restaurant management and hourly workers has resulted in ~~2022, only partially offset by menu price increases. For the six months ended June 30, 2021 salaries~~measurable higher salary and ~~wages represented 19.9% of revenue which reflected the PPP loan/grant used in part to reimburse the Company $370,832 of payroll costs in the first quarter 2021.~~ wage rates.

Gross margin contribution as a percentage of revenue for this venue ~~was~~increased to 14.7% from 13.6% ~~and 11.8% compared to 14.5% and 27.6%~~ for the ~~three-month and six-month periods~~three-months ended June 30, ~~2022, respectfully, compared to the corresponding periods last year. The reduction in margin for the three-month period ended June 30, 2022~~2023 compared to the corresponding period in ~~2021 was primarily the result of general inflation increasing utility costs, packaging and other operating costs only partially offset by menu price increases. The 11.8% margin in~~2022. For the six-month period ~~ended June 30, 2022 reflected~~ the ~~significant decline~~gross margin remained approximately the same at 11.8%, as the corresponding period in ~~sales~~2022. Sales were under pressure during January and February 2023 due to several economic factors, including inflation, high gas prices and consumer concerns about the ~~rapid spread~~direction of the Omicron virus during the period December 2021 through February 2022. That margin also reflected the general inflationary pressures as described above in the three-month period. The margin of 27.6% in the six-month period ended 2021 reflected the expenses which were partially reimbursed from the PPP loan/grant in February 2021. overall economy.

Total revenue was ~~$1.06~~$1.4 million and ~~$2.10~~$2.4 million for the three-month and six-month periods ended June 30, ~~2022~~2023 compared to ~~$1.20~~$1.06 million and ~~$2.25~~$2.10 million for the comparable periods in ~~2021,~~2022, respectively. ~~Franchising had a significant loss of sales during~~This is primarily the ~~COVID pandemic primarily because of closures of many host locations in different parts~~result of the ~~country which closed due~~Company determining to ~~government regulations.~~redirect additional staff efforts on the sale of non-traditional franchises while still carefully managing corporate-level overhead expenses. The revenue has been gradually increasing again due to the opening of new locations and on a sequential quarter basis revenue from this venue increased from $1,013,000 in the three-month ended December 31, 2021, to $1,034,000 in the three-months ended March 31, 2022 and to $1,064,000 in the three-months ended June 30, 2022, respectively. That trend is expected to continue and increaseCompany refocused its development plans toward selling more non-traditional franchises as a result of the pandemic and its after effects coming to an end and the determination that owners of non-traditional locations would be more willing to look at expansion options and a willingness to invest in their growth. With the sales efforts in the first six month of this year the Company generated 43 new ~~openings in July 2022 and anticipated openings during~~franchised units available for opening. During the first six months of 2023, the Company opened 22 new locations with the remaining balance of ~~2022.~~ the locations sold and not yet open in various stages of development to be opened. In addition, the Company has a significant pipeline of leads and prospects for future non-traditional franchise sales. The Company believes this growth points to an attractive opportunity for the coming months as the remaining new units already sold opened and the number of interested prospects that the Company has identified.

Salaries, ~~and~~ wages, trade show expense, insurance and travel costs were all kept in line with past results and the Company continues to maintain good control over those dollar amounts. However, comparability of other costs and margins is difficult, because of the large reduction of other operating costs in the first quarter of 2023 as a ~~percentage~~result of ~~revenue from this venue were 45.4%~~recording the ERTC refund. See Note 1 of the Company’s condensed consolidated financial statements above.

The reported margin was 68.4% and ~~45.0%~~118.4% for the three-month and six-month periods ended June 30, ~~2022~~2023, compared to 40.2% and 36.5%, respectively, for the corresponding periods in 2021. The 36.5% for total expenses in the six-months ended June 30, 2021 reflected the reduction of payroll and other expenses partially reimbursed by the PPP loan/grant in February 2021, but which was partially offset in the six months ended June 30, 2022 by a reduction in trade show cost as a result of doing fewer trade shows.

~~Margin was~~ 54.6% and 55.0% for the ~~three-month and six-month periods ended June 30, 2022, compared to 59.8% and 63.5% for the~~ comparable periods in ~~2021,~~2022, respectively. The ~~decrease~~increase in margin in the three-month period was ~~largely~~ the result of new franchise locations and in the ~~decrease in revenue. As explained above~~six-month period it was the ~~revenue decreased due to the closure of locations throughout the country during the COVID-19 pandemic as a~~ result of ~~government regulations. That revenue decrease is gradually being overcome by the opening of~~those same new locations ~~as explained above.~~plus the benefit of the ERTC.

Gross revenue from this venue was ~~$177,000~~$237,000 and ~~$310,000~~$460,000 during the three-month and six-month periods ended June 30, ~~2022~~2023 compared to ~~$117,000~~$177,000 and ~~$233,000~~$310,000 for the comparable periods in ~~2021,~~2022, respectively. The primary reason for the significant increase in revenue during both periods was the withdrawal of certain restrictions placed on hospital locations as a result of the COVID-19 pandemic ~~as a result of which~~where hospitals were restricted from having outside visitors and staff inside the hospital 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 were ~~$170,000~~$204,000 and ~~$303,000~~$326,000 for the three-month and six-month periods ended June 30, ~~2022~~2023 compared to ~~$119,000~~$170,000 and ~~$208,000~~$303,000 for the comparable periods in ~~2021,~~2022, respectively. The ~~primary reason for the~~ increase in ~~both periods was~~expenses resulted from the significant increase in revenue, ~~as a result~~partially offset by the recording of ~~lifting restrictions on~~ the ~~hospital due to~~ERTC in the ~~COVID-19 pandemic, as explained above.~~ first quarter of 2023.

Depreciation and amortization expense were ~~$112,687~~$95,517 and ~~$225,439~~$191,033 for the three-month and six-month periods ended June 30, ~~2022~~2023 compared to ~~$142,133~~$112,687 and ~~$306,849~~$225,439 for the comparable periods in ~~2021,~~2022, respectively. The decrease in depreciation ~~decrease~~expense was the result of not opening any new corporate-owned locations to date in ~~2022.~~2023.

General and administrative expenses were ~~$540,000~~$526,000 and ~~$1.08 million~~$1,045,000 for the three-month and six-month periods ended June 30, ~~2022,~~2023, compared to ~~$482,000~~$540,000 and ~~$780,000~~$1,080,000 for the comparable periods in ~~2021,~~2022, respectively. ~~The primary reason for~~This reflects the ~~increase was a partial reimbursement of certain qualifying expenses~~Company’s focus on minimizing costs while growing revenue through ~~the February 2021 PPP loan/grant and the hiring of an outside investor relations consultant.~~franchising.

Operating income was ~~$282,000~~$704,361 and ~~$441,000~~$2,230,109 for the three-month and six-month periods ended June 30, ~~2022~~2023 compared to ~~$424,000~~$281,584 and ~~$1.6 million~~$440,727 for the comparable periods in ~~2021,~~2022, respectively. The ~~primary reason for~~increase in the ~~decrease~~second quarter of 2023 over 2022 was a result of growth in the ~~$940,000 PPP loan/grant~~franchising venue while maintaining Craft Pizza & Pub profitability while and keeping overall expenses under control. The six-month period results also benefited from the recognition of the ERTC of $1.46 million in ~~February 2021.~~ the first quarter of 2023.

Interest expense was ~~$348,000~~$379,000 and ~~$690,000~~$762,000 for the three-month and six-month periods ended June 30, ~~2022~~2023 compared to ~~$339,000~~$348,000 and ~~$673,000~~$690,000 for the comparable periods in ~~2021,~~2022, respectively. The primary reason for the increase in both periods was ~~a result of the~~ non-cash PIK interest which adds to the principal amount of the Corbel loan ~~outstanding.~~

Net loss was $50,000 and $187,000 for the three-month and six-month periods ended June 30, 2022, compared to net income$85,000 and $913,000 for the comparable periods in 2021, respectively. The primary reason for the decrease was the $940,000 PPP loan/grant in February 2021 which was partiallyoutstanding, however that is now being offset by a ~~decrease in revenue from franchising and~~principal payment each month of $83,333, plus an ~~increase in revenue from Company-owned Craft Pizza & Pub locations.~~application of a portion of the ERTC reimbursement received to the early retirement of a portion of the long-term debt.

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 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, March, October and December of 2020, and October and December of 2021.

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

~~The Company’s~~ current ratio was ~~2.12-to-1~~1.84-to-1 as of June 30, ~~2022,~~2023 compared to ~~2.3-to-1~~1.3-to-1 as of December 31, ~~2021.~~ 2022.

In January 2017, the Company completed the ~~private placement~~offering of $2.4 million principal amount of ~~the Notes~~promissory notes (the “Notes”) convertible to ~~common stock~~Common Stock at $0.50 per share and ~~Warrants~~warrants (the “Warrants”) to purchase up to 2.4 million shares of the Company’s ~~common stock~~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,~~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,~~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,~~Common Stock, leaving principal amounts of Notes of $1.9 million outstanding as of December 31, 2019. Holders of Notes in the principal amount of $775,000 extended their maturity date to January 31, 2023. In February 2020, $1,275,000 principal amount of the Notes were repaid in conjunction with a new financing leaving a principal balance of $625,000 of subordinated convertible notes outstanding due January 31, 2023. In April 2023, the holder of $50,000 principal amount of the subordinated convertible notes were repaid by the Company leaving $575,000 outstanding. These Notes bear interest at 10% per annum, including the Notes which have not been extended, paid quarterly and are convertible to ~~common stock~~Common Stock any time prior to maturity at the option of the holder at $0.50 per share. The ~~notes increased on the balance sheet due to the adding of PIK interest to the note balance. The~~ remaining Warrants to purchase ~~775,000~~725,000 shares were re-priced to $0.57 per share as a result of the financing completed in February 2020.

On February 7, 2020, the Company entered into the Agreement with Corbel, pursuant to which the Company issued to ~~the purchaser~~Corbel the Senior Note in the initial principal amount of $8.0 million. The Company ~~has~~ used the net proceeds of the Agreement as follows: (i) $4.2 million was used to repay the Company’s then-existing bank debt which 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 were 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 PIK Interest of 3% per annum, which 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~~as amended, requires principal payments of $33,333 in February 2023 and beginning in March 2023 principal payments of $83,333 per month continuing until ~~February 28, 2023, at which time~~maturity. At the end of the third quarter 2022, the Company entered into an amendment to the Agreement changing the required ~~monthly~~ payments of principal beginning in March 2023 from $33,333 per month to $83,333 per month in exchange for lowering the ~~amount of $33,333 begin~~financial covenants and ~~continue until maturity. The Senior Note requires~~eliminating 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.~~requirement. In addition, LIBOR will be replaced with SOFR.

~~On February 5, 2021,~~See Note 1 to the ~~Company~~Company’s condensed consolidated financial statements for discussion of funds 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. On November 19, 2021, the Company received formal notice~~ from the ~~SBA that the entire $940,734 loan was forgiven in accordance with the provisions of the CARES ACT. The Company had already treated the loan as a grant because forgiveness was probable.~~ ERTC.

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~~&Pub locations and pursuing a franchising program for Craft Pizza & Pub ~~restaurants.~~restaurants as market conditions allow. The Company intends to refinance its outstanding debt payable to Corbel before maturity in February 2025.

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

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~~ and ~~cost of hourly and management labor to adequately staff Company-operated and franchise operations,~~its aftermath, competitive factors and pricing ~~pressures, accelerating inflation~~ and ~~the~~ cost ~~of labor, food items and supplies,~~pressures, 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, the outcome of the election of directors at the Company’s 2023 annual meeting of shareholders (as discussed under “Part II-Other Information”), general economic conditions, changes in demand for the Company’s products or franchises, the Company’s ability to service its loans, the acceptance of the amended federal Form 941 returns relating to the ERTC, the impact of franchise regulation, the success or failure of individual franchisees and inflation, other changes in prices or supplies of food ingredients and labor and the resolution of litigation arising out of a dispute with a third party purporting to nominate a candidate for director at the 2023 annual meeting, as well as the factors discussed under “Risk ~~Factors "~~Factors” contained in ~~the~~this Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. If activist stockholder activities ensue, our business could be adversely impacted.

The Company’s exposure to interest rate risk relates primarily to its variable-rate debt. As of ~~June 30,~~December 31, 2022, the Company had outstanding variable interest-bearing debt in the aggregate principal amount of ~~$8.6~~$8.4 million. The Company’s current borrowings ~~are~~were at a variable rate tied to LIBOR plus ~~7.75%~~7.25% 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 ~~$87,000~~$85,000 over the succeeding 12-month period. At the end of the third quarter 2022, the Company entered into an amendment to the Senior Note agreement changing the required payments of principal beginning in March 2023 from $33,333 per month to $83,333 per month in exchange for lowering the financial covenants and eliminating the excess cash flow requirement. In addition, when LIBOR is phased out it will be replaced with SOFR.

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.

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

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.

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

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

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

Condensed consolidated balance sheets as of December 31, ~~2021~~2022 and June 30, ~~2022~~2023 (unaudited)		Page 4	3

Condensed consolidated statements of operations for the three-month and six-month periods ended June 30, ~~2021~~2022 and ~~2022~~2023 (unaudited)		Page 5	4

Condensed consolidated statements of changes in ~~stockholders'~~stockholders’ equity for the three-month periods ended June 30, 2023 and 2022 and ~~2021~~six-month periods ended June 30, 2023 and 2022 (unaudited)	Page 5

Condensed consolidated statements of cash flows for the three-month and six-month periods ended June 30, 2022 and ~~2021~~2023 (unaudited)		Page 6

~~Condensed consolidated statements of cash flows for the six-month periods ended June 30, 2021 and 2022 (unaudited)~~		~~Page 7~~

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

	Common Stock				Accumulated
	Shares		Amount		Deficit			Total

Six Months Ended June 30, 2023:

Balance at December 31, 2022		22,215,512	$	24,819,736	$	(22,953,074	)	$	1,866,662

Net income for the six months ended June 30, 2023						1,193,847			1,193,847

Amortization of value of employee stock options				12,789					12,789

Balance at June 30, 2023		22,215,512	$	24,832,525	$	(21,759,227)		$	3,073,298

	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

Large Accelerated Filer	☐	Accelerated Filer	☐
~~Non-accelerated~~Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

	Six months ended June 30,
OPERATING ACTIVITIES	2021			2022
Net income (loss)	$	912,573		$	(186,957	)
Adjustments to reconcile net income to net cash Provided by operating activities:
Depreciation and amortization		545,110			471,613
Amortization of lease costs in excess of cash paid		18,605			10,561
Deferred income taxes		0			(61,913	)
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable		(126,827	)		(127,824	)
Inventories		(17,106	)		(525	)
Prepaid expenses		(70,174	)		(35,297	)
Other assets		(31,726	)		(74,095	)
Increase (decrease) in:
Accounts payable and accrued expenses		(344,391	)		165,944
NET CASH PROVIDED BY OPERATING ACTIVITIES		886,064			161,507

INVESTING ACTIVITIES
Purchase of property and equipment		(63,750	)		(524,731	)
NET CASH USED IN INVESTING ACTIVITIES		(63,750	)		(524,731	)

FINANCING ACTIVITIES
Payment of principal on bank loans		0			0
Payment of principal on convertible notes		0			0
Proceeds of new loan - Corbel		0			0
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		0			0

Increase (decrease) in cash		822,314			(363,224	)
Cash at beginning of period		1,194,363			1,263,513
Cash at end of period	$	2,016,677		$	900,289

Supplemental schedule of investing and financing activities

Cash paid for interest	$	446,801		$	459,533

	Three-Months Ended June 30,						Six Months Ended June 30,
OPERATING ACTIVITIES	2022			2023			2022			2023
Net income (loss)	$	(50,261	)	$	325,576		$	(186,957	)	$	1,193,847
Adjustments to reconcile net income (loss) to net cash
Provided by operating activities:
Depreciation and amortization		236,802			211,530			471,613			425,568
Amortization of lease costs in excess of cash paid		4,462			2,997			10,561			6,464
Deferred (benefit) income taxes		(15,872	)		-			(61,913	)		274,190
Changes in operating assets and liabilities:
(Increase) decrease in:
Employee Retention Tax Credit		-			-			-			(1,460,444	)
Accounts receivable		(145,920	)		45,301			(127,824	)		18,167
Inventories		5,838			1,424			(525	)		(7,397	)
Prepaid expenses		(8,992	)		(9,341	)		(35,297	)		14,110
Other assets		(7,688	)		(12,030	)		(74,095	)		(39,452	)
Increase (decrease) in:
Accounts payable and accrued expenses		132,282			(26,668	)		165,944			(78,501	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		150,651			538,789			161,507			346,552
INVESTING ACTIVITIES
Purchase of property and equipment		(58,349	)		(16,094	)		(524,731	)		(29,430	)
NET CASH USED IN INVESTING ACTIVITIES		(58,349	)		(16,094	)		(524,731	)		(29,430	)

FINANCING ACTIVITIES
Payment of principal on convertible notes		-			(50,000	)		-			(50,000	)
Payment of principal on Corbel loan		-			(250,000	)		-			(366,667	)
NET CASH (USED) IN FINANCING ACTIVITIES		-			(300,000	)		-			(416,667	)

Increase (decrease) in cash		92,302			222,695			(363,224	)		(99,545	)
Cash at beginning of period		807,987			463,283			1,263,513			785,523
Cash at end of period	$	900,289		$	685,978		$	900,289		$	685,978

Supplemental schedule of investing and financing activities

Cash paid for interest	$	232,088		$	269,167		$	459,533		$	540,327

	Six Months Ended June 30, 2022
	Income (Numerator)			Shares (Denominator)		Per-Share Amount
Net loss	$	(186,957	)		22,215,512	$	(0.01	)
Effect of dilutive securities
Convertible notes		31,250			1,250,000
Dilutive shares		0			113,606

Diluted earnings per share
Net loss (1)	$	(155,707	)		23,579,118	$	(0.01	)

	Six Months Ended June 30, 2023
	Income		Shares		Per-Share
	(Numerator)		(Denominator)		Amount
Net income	$	1,193,845		22,215,512	$	0.05
Effect of dilutive securities
Convertible notes		30,000		1,150,000
Dilutive shares		-		133,252

Diluted earnings per share
Net income	$	1,223,845		23,498,764	$	0.05

	·	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 soy additives or extenders, a distinction compared to many pizza concepts.

	·	~~Vegetable~~Vegetables (like onions and ~~mushroom toppings~~green peppers) and mushrooms for pizzas are sliced and delivered fresh, never canned.

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

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

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

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		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		Description of Registered Securities, dated May 11, 2022, filed as Exhibit 4.1 to the Registrant’s Form 10-Q, is incorporated herein by reference.

4.2		Specimen Common Stock Certificates filed as an exhibit to the Registrant’s Registration Statement on Form S-18 filed October 22, 1982 and ordered effective on December 14, 1982 (SEC File No. 2-79963C), is incorporated herein by reference.

~~4.4~~
4.4		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.

4.5		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.

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		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.

10.4		Form of 10% Convertible Subordinated Unsecured note filed as Exhibit 10.16 to the ~~Registrant's~~Registrant’s Form 10-K filed on March 27, 2017, is incorporated herein by reference.

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

10.6		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.

10.7		Amendment to the Senior Secured Promissory Note and Warrant Purchase Agreement and Other Note Documents and Waiver, dated as of September 29, 2022, by and among Registrant and Corbel Capital Partners SBIC, L.P. dated September 29, 2022, filed herewith.

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		C.F.O. Certification under 18 U.S.C. Section 1350

101		Interactive Financial Data

	NOBLE ~~ROMAN'S,~~ROMAN’S, INC.

Date: August ~~10, 2022~~9, 2023	ByBy:	/s/ Paul W. Mobley
		Paul W. Mobley, Executive Chairman,
	Chief Financial Officer and Principal
	Accounting Officer (Authorized Officer and ~~and~~ Principal Financial Officer)