Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 09, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | NOBLE ROMANS INC | ||
Entity Central Index Key | 709005 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | Yes | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $16,300,000 | ||
Entity Common Stock, Shares Outstanding | 20,095,087 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash | $200,349 | $157,787 |
Accounts receivable - net | 1,687,954 | 1,268,788 |
Inventories | 381,400 | 337,822 |
Prepaid expenses | 467,721 | 472,065 |
Deferred tax asset - current portion | 1,675,000 | 1,250,000 |
Total current assets | 4,412,424 | 3,486,462 |
Property and equipment: | ||
Equipment | 1,383,380 | 1,361,205 |
Leasehold improvements | 88,718 | 88,718 |
Total | 1,472,098 | 1,449,923 |
Less accumulated depreciation and amortization | 1,041,951 | 962,502 |
Net property and equipment | 430,147 | 487,421 |
Deferred tax asset (net of current portion) | 7,899,497 | 9,332,024 |
Other assets including long-term portion of notes receivable - net | 5,015,931 | 3,067,754 |
Total assets | 17,757,999 | 16,373,661 |
Current liabilities: | ||
Current portion of long-term notes payable to bank | 1,469,028 | 1,216,250 |
Accounts payable and accrued expenses | 676,386 | 818,803 |
Total current liabilities | 2,145,414 | 2,035,053 |
Long-term obligations: | ||
Notes payable to bank (net of current portion) | 1,846,736 | 2,635,208 |
Total long-term liabilities | 1,846,736 | 2,635,208 |
Stockholders' equity: | ||
Common stock - no par value (25,000,000 shares authorized, 19,585,089 issued and outstanding as of December 31, 2013 and 20,095,087 as of December 31, 2014) | 23,970,654 | 23,498,401 |
Accumulated deficit | -10,204,805 | -11,795,001 |
Total stockholders' equity | 13,765,849 | 11,703,400 |
Total liabilities and stockholders' equity | $17,757,999 | $16,373,661 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders' equity: | ||
Common stock, par value | $0 | $0 |
Common stock, authorized shares | 25,000,000 | 25,000,000 |
Common stock, issued shares | 20,095,087 | 19,585,089 |
Common stock, outstanding shares | 20,095,087 | 19,585,089 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | |||
Royalties and fees | $7,479,334 | $7,082,548 | $6,823,811 |
Administrative fees and other | 72,541 | 24,138 | 19,872 |
Restaurant revenue | 363,340 | 420,753 | 456,449 |
Total revenue | 7,915,215 | 7,527,439 | 7,300,132 |
Operating expenses: | |||
Salaries and wages | 1,063,076 | 1,056,790 | 979,447 |
Trade show expense | 541,385 | 514,570 | 498,951 |
Travel expense | 235,127 | 207,572 | 183,316 |
Other operating expenses | 876,162 | 747,914 | 685,836 |
Restaurant expenses | 402,281 | 390,507 | 427,127 |
Depreciation and amortization | 111,750 | 113,607 | 116,287 |
General and administrative | 1,646,502 | 1,646,993 | 1,593,646 |
Total expenses | 4,876,283 | 4,677,953 | 4,484,610 |
Operating income | 3,038,932 | 2,849,486 | 2,815,522 |
Interest and other expense | 190,382 | 201,381 | 413,334 |
Adjust valuation of receivables - Heyser Case | 1,208,162 | 500,000 | |
Income before income taxes from continuing operations | 2,848,550 | 1,439,943 | 1,902,188 |
Income tax expense | 1,104,809 | 568,406 | 753,457 |
Net income from continuing operations | 1,743,741 | 871,537 | 1,148,731 |
Loss from discontinued operations net of tax benefit of $344,079 for 2012, $511,893 for 2013 and $97,284 for 2014 | -153,545 | -780,440 | -524,588 |
Net income | 1,590,196 | 91,097 | 624,143 |
Cumulative preferred dividends | 99,000 | 99,271 | |
Net income (loss) available to common stockholders | $1,590,196 | ($7,903) | $524,872 |
Earnings per share - basic: | |||
Net income from continuing operations | $0.09 | $0.05 | $0.06 |
Net loss from discontinued operations net of tax benefit | ($0.01) | ($0.04) | ($0.03) |
Net income | $0.08 | $0.01 | $0.03 |
Net income available to common stockholders | $0.08 | $0 | $0.03 |
Weighted average number of common shares outstanding | 19,870,904 | 19,533,201 | 19,497,638 |
Diluted earnings per share: | |||
Net income from continuing operations | $0.08 | $0.05 | $0.06 |
Net loss from discontinued operations net of tax benefit | ($0.01) | ($0.04) | ($0.03) |
Net income | $0.07 | $0.01 | $0.03 |
Weighted average number of common shares outstanding | 21,204,439 | 20,472,908 | 20,077,910 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Preferred Stock | Common Stock | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2011 | $800,250 | $23,239,976 | ($12,311,970) | $11,728,256 |
Beginning Balance, Shares at Dec. 31, 2011 | 19,469,317 | |||
Cumulative preferred dividends | -99,271 | -99,271 | ||
Amortization of value of employee stock options | 107,882 | 107,882 | ||
Net income | 624,143 | 624,143 | ||
Exercise of employee stock options, Amount | 18,200 | 18,200 | ||
Exercise of employee stock options, Shares | 47,272 | |||
Ending Balance, Amount at Dec. 31, 2012 | 800,250 | 23,366,058 | -11,787,098 | 12,379,210 |
Ending Balance, Shares at Dec. 31, 2012 | 19,516,589 | |||
Cumulative preferred dividends | -99,000 | -99,000 | ||
Amortization of value of employee stock options | 117,118 | 117,118 | ||
Net income | 91,097 | 91,097 | ||
Redeemed preferred stock | -800,250 | -800,250 | ||
Exercise of employee stock options, Amount | 39,975 | 39,975 | ||
Exercise of employee stock options, Shares | 68,500 | |||
Issurance cost of preferred stock | -24,750 | -24,750 | ||
Ending Balance, Amount at Dec. 31, 2013 | 23,498,401 | -11,795,001 | 11,703,400 | |
Ending Balance, Shares at Dec. 31, 2013 | 19,585,089 | |||
Amortization of value of employee stock options | 48,815 | 48,815 | ||
Net income | 1,590,196 | 1,590,196 | ||
Exercise of employee stock options, Amount | 105,230 | 105,230 | ||
Exercise of employee stock options, Shares | 115,000 | |||
Cashless exercise of employee stock options | 214,998 | |||
Stock issued in exchange for payables, amount | 318,208 | 318,208 | ||
Stock issued in exchange for payables, shares | 180,000 | |||
Ending Balance, Amount at Dec. 31, 2014 | $23,970,654 | ($10,204,805) | $13,765,849 | |
Ending Balance, Shares at Dec. 31, 2014 | 20,095,087 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
OPERATING ACTIVITIES | |||
Net income | $1,590,196 | $91,097 | $624,143 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 128,265 | 174,241 | 192,012 |
Non-cash expense from reducing valuation of receivables | 0 | 1,208,162 | 0 |
Deferred income taxes | 1,007,526 | 568,406 | 753,457 |
(Increase) decrease in: | |||
Accounts receivable | -419,166 | -288,425 | -195,553 |
Inventories | -43,578 | 123,018 | -122,392 |
Prepaid expenses | 4,344 | -92,397 | -100,950 |
Other assets including long-term portion of accounts receivable | -1,861,460 | -370,133 | 147,902 |
Increase in: | |||
Accounts payable and accrued expenses | 263,622 | 308,093 | 205,946 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 669,749 | 1,722,062 | 1,504,565 |
INVESTING ACTIVITIES | |||
Purchase of property and equipment | -22,176 | -11,958 | -18,994 |
Assets held for resale | 0 | 0 | -7,027 |
NET CASH USED BY INVESTING ACTIVITIES | -22,176 | -11,958 | -26,021 |
FINANCING ACTIVITIES | |||
Payment of cumulative preferred dividends | 0 | -99,000 | -99,271 |
Payment of principal on outstanding under prior bank loan | 0 | 0 | -3,575,000 |
Payment of principal officer loan | 0 | 0 | -1,255,821 |
Payment of principal outstanding on bank loans | -1,235,694 | -1,244,375 | -729,167 |
Redemption of all preferred stock outstanding | 0 | -825,000 | 0 |
Payment of alternative minimum tax | 0 | 0 | -34,515 |
Proceeds from new bank loan net of closing costs | 697,704 | 821,454 | 4,812,457 |
Proceeds from the exercise of stock options | 105,230 | 39,975 | 18,200 |
NET CASH USED BY FINANCING ACTIVITIES | -432,760 | -1,306,946 | -863,117 |
DISCONTINUED OPERATIONS | |||
Payment of obligations from discontinued operations | -172,251 | -389,725 | -704,369 |
Increase (decrease) in cash | 42,562 | 13,433 | -88,942 |
Cash at beginning of year | 157,787 | 144,354 | 233,296 |
Cash at end of year | $200,349 | $157,787 | $144,354 |
1_Summary_of_Significant_Accou
1. Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Note 1 - Summary of Significant Accounting Policies | Organization: The Company sells and services franchises and/or licenses for non-traditional foodservice operations and stand-alone retail outlets under the trade names “Noble Roman’s Pizza,” “Tuscano’s Italian Style Subs and” “Noble Roman’s Take-N-Pizza”. Unless the context otherwise indicates, reference to the “Company” are to Noble Roman’s, Inc. and its wholly-owned subsidiaries. | ||||||||||||
Principles of Consolidation: The consolidated financial statements include the accounts of Noble Roman’s, Inc. and its wholly-owned subsidiaries, Pizzaco, Inc. and N.R. Realty, Inc. Inter-company balances and transactions have been eliminated in consolidation. | |||||||||||||
Inventories: Inventories consist of food, beverage, restaurant supplies, restaurant equipment and marketing materials and are stated at the lower of cost (first-in, first-out) or market. | |||||||||||||
Property and Equipment: Equipment and leasehold improvements are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives ranging from five years to 12 years. Leasehold improvements are amortized over the shorter of estimated useful life or the term of the lease. | |||||||||||||
Cash and Cash Equivalents: Includes actual cash balance. The cash is not pledged nor are there any withdrawal restrictions. | |||||||||||||
Advertising Costs: The Company records advertising costs consistent with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Other Expense topic and Advertising Costs subtopic. This statement requires the Company to expense advertising production costs the first time the production material is used. | |||||||||||||
Use of Estimates: The preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company records a valuation allowance in a sufficient amount to adjust the accounts receivables value, in its best judgment, to reflect the amount that the Company estimates will be collected from its total receivables. As any accounts are determined to be permanently impaired (bankruptcy, lack of contact, age of account balance, etc.), they are charged off against the valuation allowance. The Company evaluates its property and equipment and related costs periodically to assess whether any impairment indications are present, including recurring operating losses and significant adverse changes in legal factors or business climate that affect the recovery of recorded value. If any impairment of an individual asset is evident, a loss would be provided to reduce the carrying value to its estimated fair value. | |||||||||||||
Intangible Assets: Debt issue costs are amortized to interest expense ratably over the term of the applicable debt. The debt issue cost being amortized is $162,833 with accumulated amortization at December 31, 2014 of $93,707. | |||||||||||||
Royalties, Administrative and Franchise Fees: Royalties are generally recognized as income monthly based on a percentage of monthly sales of franchised or licensed restaurants and from audits and other inspections as they come due and payable by the franchisee. Fees from the retail products in grocery stores are recognized monthly based on the distributors’ sale of those retail products to the grocery stores or grocery store distributors. Administrative fees are recognized as income monthly as earned. Initial franchise fees are recognized as income when the services for the franchised restaurant are substantially completed. | |||||||||||||
Exit or Disposal Activities Related to Discontinued Operations: The Company records exit or disposal activity for discontinued operations when management commits to an exit or disposal plan and includes those charges under results of discontinued operations, as required by the ASC “Exit or Disposal Cost Obligations” topic. | |||||||||||||
Income Taxes: The Company provides for current and deferred income tax liabilities and assets utilizing an asset and liability approach along with a valuation allowance as appropriate. The Company concluded that no valuation allowance was necessary because it is more likely than not that the Company will earn sufficient income before the expiration of its net operating loss carry-forwards to fully realize the value of the recorded deferred tax asset. As of December 31, 2014, the net operating loss carry-forward was approximately $22.6 million which expires between the years 2018 and 2033. Management made the determination that no valuation allowance was necessary after reviewing the Company’s business plans, relevant known facts to date, recent trends, current performance and analysis of the backlog of franchises sold but not yet open. | |||||||||||||
U.S. generally accepted accounting principles require the Company to examine its tax positions for uncertain positions. Management is not aware of any tax positions that are more likely than not to change in the next 12 months, or that would not sustain an examination by applicable taxing authorities. The Company’s policy is to recognize penalties and interest as incurred in its Consolidated Statements of Operations. None were included for the years ended December 31, 2012, 2013 and 2014. The Company’s federal and various state income tax returns for 2011 through 2014 are subject to examination by the applicable tax authorities, generally for three years after the later of the original or extended due date. | |||||||||||||
Basic and Diluted Net Income Per Share: Net income per share is based on the weighted average number of common shares outstanding during the respective year. When dilutive, stock options and warrants are included as share equivalents using the treasury stock method. | |||||||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2012: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Net income | $ | 624,143 | |||||||||||
Less preferred stock dividends | (99,271 | ) | |||||||||||
Earnings per share – basic | 524,872 | 19,497,638 | $ | 0.03 | |||||||||
Income available to common stockholders | |||||||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 213,606 | |||||||||||
Convertible preferred stock | 99,271 | 366,666 | |||||||||||
Diluted earnings per share | |||||||||||||
Income available to common stockholders and assumed conversions | $ | 624,143 | 20,077,910 | $ | 0.03 | ||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2013: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Net income | $ | 91,097 | |||||||||||
Less preferred stock dividends | (99,000 | ) | |||||||||||
Earnings per share – basic | (7,903 | ) | 19,533,201 | $ | - | ||||||||
Loss available to common stockholders | |||||||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 939,707 | |||||||||||
Convertible preferred stock | 99,000 | - | |||||||||||
Diluted earnings per share | |||||||||||||
Income available to common stockholders and assumed conversions | $ | 91,097 | 20,472,908 | $ | 0.01 | ||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2014: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Earnings per share – basic | |||||||||||||
Net income | 1,590,196 | 19,870,904 | $ | 0.08 | |||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 1,333,535 | |||||||||||
Diluted earnings per share | |||||||||||||
Net income | $ | 1,590,196 | 21,204,439 | $ | 0.07 | ||||||||
Subsequent Events: The Company evaluated subsequent events through the date the consolidated statements were issued and filed with Form 10-K. No subsequent event required recognition or disclosure. | |||||||||||||
2_Accounts_Receivable
2. Accounts Receivable | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 2 - Accounts Receivable | At December 31, 2013 and 2014, the carrying value of the Company’s accounts receivable has been reduced to anticipated realizable value. As a result of this reduction of carrying value, the Company anticipates that substantially all of its net receivables reflected on the Consolidated Balance Sheets as of December 31, 2013 and 2014 will be collected. The allowance to reduce the receivables to anticipated net realizable value at December 31, 2014 was $2.25 million. |
In 2012, the Company dismissed its counterclaims against certain plaintiffs in the lawsuit related to the operations discontinued in 2008 and reduced the net realizable value by $500,000 related to the Company’s counterclaims against the plaintiffs in the lawsuit referenced above. In 2013, based on a judgment that was entered on February 13, 2014 in the lawsuit, the Company reduced the carrying value of the receivables subject to the counterlaims by $1.1 million. Since the right to receive passive income in the form of royalties is not a part of the discontinued operations, the adjustments to reflect these two charges were made to continuing operations. |
3_Notes_Payable
3. Notes Payable | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Note 3 - Notes Payable | In May 15, 2012, the Company entered into a Credit Agreement with BMO Harris Bank, N.A. (the”Bank”) for a term loan in the amount of $5.0 million which was repayable in 48 equal monthly principal installments of approximately $104,000 plus interest with a final payment due in May, 2016. Interest on the unpaid principal balance is payable at a rate per annum of LIBOR plus 4%. The proceeds from the term loan, net of certain fees and expenses associated with obtaining the term loan, were used to repay then-existing bank indebtedness and borrowing from an officer of the Company. In October, 2013, the Company entered into a First Amendment to the Credit Agreement (the “FirstAmendment”) with the Bank. The First Amendment maintains the terms of the term loan, as described above, except for reducing the monthly principal payments from $104,000 to approximately $80,700 and extending the maturity to February, 2017. All other terms and conditions of the term loan remain the same including interest on the unpaid principal at a rate per annum of LIBOR plus 4%. The First Amendment also provided for a new term loan in the original amount of $825,000 requiring monthly principal payments of approximately $20,600 per month commencing in November, 2013 and continuing thereafter until the final payment in February, 2017. The term loan provides for interest on the unpaid principal balance to be paid monthly at a rate per annum of LIBOR plus 6.08%. Proceeds from term loan were used to redeem the Series B Preferred Stock. In October, 2014, the Company entered into a Second Amendment to its Credit Agreement (the “Second Amendment”) with the Bank. Pursuant to the Second Amendment, the Company borrowed $700,000 in the form of a term loan repayable in 36 equal monthly installments of principal in the amount of $19,444 plus interest on the unpaid balance of LIBOR plus 6% per annum. The terms and conditions of the Credit Agreement were otherwise unchanged. The Company used the proceeds from the loan for additional working capital, as a result of the recent growth in the grocery store take-n-bake venue. Interest paid on the term loans in 2014 was $156,468. The Company’s obligations under the term loans are secured by the grant of a security interest in essentially all assets of the Company and a personal guaranty of an officer of up to $2.78 million of the loans and certain restrictions apply to the Company such as a prohibition on the payment of dividends on common stock, as set forth in the Credit Agreement. |
4_Royalties_and_Fees
4. Royalties and Fees | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Note 4 - Royalties and Fees | Approximately $294,000, $788,000 and $313,000 are included in the 2012, 2013 and 2014, respectively, royalties and fees in the Consolidated Statements of Operations for initial franchise fees. Also included in royalties and fees were approximately $81,000, $95,000 and $80,000 in 2012, 2013 and 2014, respectively, for equipment commissions. 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 contractual liability for the franchisee. For the most part, the Company’s ongoing royalty income is paid electronically by the Company initiating a draft on the franchisee’s account by electronic withdrawal. |
In conjunction with the development of Noble Roman’s Pizza and Tuscano’s Italian Style Subs, the Company has devised its own recipes for many of the ingredients that go into the making of its products (“Proprietary Products”). The Company contracts with various manufacturers to manufacture its Proprietary Products in accordance with the Company’s recipes and formulas and to sell those products to authorized distributors at a contract price which includes an allowance for use of the Company’s recipes. The manufacturing contracts also require the manufacturers to remit those allowances to the Company on a periodic basis, usually monthly. The Company recognizes those allowances in revenue as earned based on sales reports from the distributors. | |
There were 2,029 franchised or licensed outlets in operation on December 31, 2013 and 2,215 on December 31, 2014. During the 12-month period ended December 31, 2014, there were 242 new franchised or licensed outlets opened and 56 franchised or licensed outlets left the system. Grocery stores are accustomed to adding products for a period of time, removing them for a period of time and possibly reoffering them. Therefore, it is unknown of the 1,409 included in the December 31, 2014 count, how many grocery store licenses were actually operating. | |
5_Contingent_Liabilities_for_L
5. Contingent Liabilities for Leased Facilities | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 5 - Contingent Liabilities for Leased Facilities | The Company leased its former restaurant facilities under non-cancelable lease agreements which generally had initial terms ranging from five to 20 years with extended renewal terms. These leases have been terminated or assigned to franchisees who operate them pursuant to a Noble Roman’s, Inc. Franchise Agreement. The assignment passes all liability for future lease payments to the assignees, however, the Company remains contingently liable on two of the leases to the landlords in the event of default by the assignees. The leases generally required the Company or its assignees to pay all real estate taxes, insurance and maintenance costs. At December 31, 2014, contingent obligations under non-cancelable operating leases for 2015, 2016 and 2017, were approximately $71,343, $24,675 and none, respectively. |
The Company has future obligations of $202,785 under current operating leases as follows: due in less than one year $143,770 and due in one to three years $59,014. |
6_Income_Taxes
6. Income Taxes | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Note 6 - Income Taxes | The Company had a deferred tax asset, as a result of prior operating losses, of $10.58 million at December 31, 2013 and $9.57 million at December 31, 2014, which expires between the years 2018 and 2033. In 2012, 2013 and 2014, the Company used deferred benefits to offset its tax expense of $753,000, $568,000 and $1.1 million, respectively, and tax benefits from loss on discontinued operations of $344,000 in 2012, $512,000 in 2013 and $97,000 in 2014. As a result of the tax credits, the Company did not pay any income taxes in 2012, 2013 and 2014. There are no material differences between reported income tax expense or benefit and the income tax expense or benefit that would result from applying the Federal and state statutory tax rates. |
7_Common_Stock
7. Common Stock | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Equity [Abstract] | |||||||
Note 7 - Common Stock | On January 13, 2014, employees exercised options for a total of 215,000 shares of common stock at a price $.36, 20,000 shares of common stock at a price of $.83 and 40,000 shares of common stock at a price of $.95 in a cashless exercises and were issued a total of 214,998 shares of common stock. On February 27, 2014, an employee exercised an option for 1,000 shares of common stock at a price of $.83 per share. On September 11, 2014, an employee exercised an option for 50,000 shares of common stock at a price of $.95 per share and an option for 30,000 shares of common stock at a price of $.90 per share. On October 20, 2014, an employee exercised an option for 4,000 shares of common stock at a price of $.90 per share. On October 29, 2014, an employee exercised an option for 10,000 shares of common stock at a price of $.83 per share. On December 1, 2014, an employee exercised an option for 20,000 shares of common stock at a price of $.90 per share. On four different dates in 2014, the Company issued a total of 180,000 shares of common stock as payment of certain payables at an average issuance price of $1.77 per share. | ||||||
The Company has an incentive stock option plan for key employees, officers and directors. The options are generally exercisable three years after the date of grant and expire ten years after the date of grant. The option prices are the fair market value of the stock at the date of grant. At December 31, 2014, the Company had the following employee stock options outstanding: | |||||||
# Common Shares | Exercise Price | ||||||
Represented | |||||||
57,500 | $ | 2.3 | |||||
120,000 | 0.36 | ||||||
325,000 | 0.95 | ||||||
1,800,000 | 1.05 | ||||||
101,000 | 0.9 | ||||||
351,000 | 0.58 | ||||||
40,000 | 0.68 | ||||||
270,500 | 1.3 | ||||||
330,000 | 1.55 | ||||||
40,000 | 1.65 | ||||||
As of December 31, 2014, options for 2,403,500 shares were exercisable. | |||||||
The Company adopted the modified prospective method to account for stock option grants, which does not require restatement of prior periods. Under the modified prospective method, the Company is required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption, net of an estimate of expected forfeitures. Compensation expense is based on the estimated fair values of stock options determined on the date of grant and is recognized over the related vesting period, net of an estimate of expected forfeitures. | |||||||
The Company estimates the fair value of its option awards on the date of grant using the Black-Scholes option pricing model. The risk-free interest rate is based on external data while all other assumptions are determined based on the Company’s historical experience with stock options. The following assumptions were used for grants in 2012, 2013 and 2014: | |||||||
Expected volatility | 30% | ||||||
Expected dividend yield | None | ||||||
Expected term (in years) | 5 | ||||||
Risk-free interest rate | 1.62% to 2.64% | ||||||
The following table sets forth the number of options outstanding as of December 31, 2011, 2012, 2013 and 2014 and the number of options granted, exercised or forfeited during the years ended December 31, 2012, December 31, 2013 and December 31, 2014: | |||||||
Balance of employee stock options outstanding as of 12/31/11 | 3,000,500 | ||||||
Stock options granted during the year ended 12/31/12 | 401,000 | ||||||
Stock options exercised during the year ended 12/31/12 | (60,000 | ) | |||||
Stock options forfeited during the year ended 12/31/12 | (75,000 | ) | |||||
Balance of employee stock options outstanding as of 12/31/12 | 3,266,500 | ||||||
Stock options granted during the year ended 12/31/13 | 273,000 | ||||||
Stock options exercised during the year ended 12/31/13 | 68,500 | ||||||
Stock options forfeited during the year ended 12/31/13 | 13,500 | ||||||
Balance of employee stock options outstanding as of 12/31/13 | 3,457,500 | ||||||
Stock options granted during the year ended 12/31/14 | 370,000 | ||||||
Stock options exercised during the year ended 12/31/14 | (390,000 | ) | |||||
Stock options forfeited during the year ended 12/31/14 | (2,500 | ) | |||||
Balance of employee stock options outstanding as of 12/31/14 | 3,435,000 | ||||||
The following table sets forth the number of non-vested options outstanding as of December 31, 2011, 2012, 2013 and 2014, and the number of stock options granted, vested and forfeited during the years ended December 31, 2012, 2013 and 2014. | |||||||
Balance of employee non-vested stock options outstanding as of 12/31/11 | 2,461,000 | ||||||
Stock options granted during the year ended 12/31/12 | 401,000 | ||||||
Stock options vested during the year ended 12/31/12 | (600,000 | ) | |||||
Stock options forfeited during the year ended 12/31/12 | (75,000 | ) | |||||
Balance of employee non-vested stock options outstanding as of 12/31/12 | 2,187,000 | ||||||
Stock options granted during the year ended 12/31/13 | 273,000 | ||||||
Stock options vested during the year ended 12/31/13 | (1,031,000 | ) | |||||
Stock options forfeited during the year ended 12/31/13 | (12,500 | ) | |||||
Balance of employee non-vested stock options outstanding as of 12/31/13 | 1,416,500 | ||||||
Stock options granted during the year ended 12/31/14 | 370,000 | ||||||
Stock options vested during the year ended 12/31/14 | (755,000 | ) | |||||
Stock options forfeited during the year ended 12/31/14 | - | ||||||
Balance of employee non-vested stock options outstanding as of 12/31/14 | 1,031,500 | ||||||
During 2014, employee stock options were granted for 370,000 shares, options for 390,000 shares were exercised and options for 2,500 shares were forfeited. At December 31, 2014, the weighted average grant date fair value of non-vested options was $1.12 per share and the weighted average grant date fair value of vested options was $1.03 per share. The weighted average grant date fair value of employee stock options granted during 2012 was $.59, during 2013 was $1.30 and during 2014 was $1.56. Total compensation cost recognized for share-based payment arrangements was $107,882 with a tax benefit of $42,732 in 2012, $117,118 with a tax benefit of $46,390 in 2013, and $48,815 with a tax benefit of $18,935 in 2014. As of December 31, 2014, total compensation cost related to non-vested options was $122,000, which will be recognized as compensation cost over the next six to 30 months. No cash was used to settle equity instruments under share-based payment arrangements. | |||||||
8_Statements_of_Financial_Acco
8. Statements of Financial Accounting Standards | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Note 8 - Statements of Financial Accounting Standards | The Company does not believe that the recently issued Statements of Financial Accounting Standards will have any material impact on the Company’s Consolidated Statements of Operations or its Consolidated Balance Sheets. |
9_Loss_from_Discontinued_Opera
9. Loss from Discontinued Operations | 12 Months Ended |
Dec. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Note 9 - Loss from Discontinued Operations | The Company made the decision in 1999 to discontinue operations of its full-service restaurants and made the decision in late 2008 to discontinue the business of operating traditional quick service restaurants, which had been acquired from struggling franchisees and later sold to new franchisees. As a result, the Company charged off or dramatically lowered the carrying value of all receivables related to the traditional restaurants and accrued future estimated expenses related to the estimated cost to prosecute a lawsuit related to those discontinued operations. The ongoing right to receive passive income in the form of royalties is not a part of the discontinued segment. |
A full-service restaurant that was closed in conjunction with the business activity discontinued in 1999 was sublet to an unrelated party. In late 2008, the Company lost that sub-tenant and the building was severely damaged by a tornado. As a result, the Company incurred additional cost related to the 1999 discontiniued operations as well as the ones that were discontinued in 2008. | |
The Company reported a net loss from discontinued operations of $525,000 in 2012. This consisted of $110,000 in legal and other costs relating to the restaurant that was closed in conjunction with the business activity discontinued in 1999 discussed above. The primary reason for this additional loss was the insurance company’s denial of all except a small portion of the Company’s claim for damages from the tornado. In addition, the Company accrued an additional loss of $415,000 for legal and other costs of a lawsuit related to the operations discontinued in 2008. | |
The Company reported a net loss on discontinued operations of $780,000 in 2013. This consisted of $178,000 in legal and settlement costs through the expiration of the lease relating to the restaurant that was closed in conjunction with the business activity discontinued in 1999 discussed above. In addition, the Company incurred $147,000 for legal and other costs of its lawsuit related to the operations discontinued in 2008, and wrote off $257,000 in receivables of which $123,000 were from various distributors and $199,000 in obsolete support materials and other costs, all related to the operations discontinued in 2008. | |
The Company reported a net loss on discontinued operations of $154,000 in 2014. This consisted of $9,600 in legal and settlement costs through the expiration of the lease relating to the restaurant that was closed in conjunction with the business activity discontinued in 1999 discussed above. In addition, the Company incurred $139,600 for legal and other costs related to the operations discontinued in 2008, and wrote off $4,300 in receivables related to the operations discontinued in 2008. |
10_Contingencies
10. Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 10 - Contingencies | The Company, from time to time, is or may become involved in various litigation or regulatory proceedings arising out of its normal business operations. |
Currently, there are no such pending proceedings which the Company considers to be material. | |
11_Certain_Relationships_and_R
11. Certain Relationships and Related Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Note 11 - Certain Relationships and Related Transactions | The following is a summary of transactions to which the Company and certain officers and directors of the Company are a party or have a financial interest. The Board of Directors of the Company has adopted a policy that all transactions between the Company and its officers, directors, principal shareholders and other affiliates must be approved by a majority of the Company's disinterested directors, and be conducted on terms no less favorable to the Company than could be obtained from unaffiliated third parties. |
Jeffrey R. Gaither, a Director, is Managing Partner of Bose McKinney & Evans, LLP, a law firm that performs legal services for the Company. The Company paid Bose McKinney for services rendered in the approximate amount of $382,000, $200,000 and $320,000 in 2012, 2013 and 2014, respectively. |
12_Unaudited_Quarterly_Financi
12. Unaudited Quarterly Financial Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Note 12 - Unaudited Quarterly Financial Information | |||||||||||||||||
Quarter Ended | |||||||||||||||||
2014 | 31-Dec | September 30 | June 30 | March 31 | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Total revenue | $ | 1,807 | $ | 2,107 | $ | 2,089 | $ | 1,912 | |||||||||
Operating income | 550 | 857 | 855 | 777 | |||||||||||||
Net income before income taxes from | 501 | 813 | 808 | 727 | |||||||||||||
continuing operations | |||||||||||||||||
Net income from continuing operations | 303 | 499 | 503 | 439 | |||||||||||||
Loss from discontinued operations | 154 | - | - | - | |||||||||||||
Net income | 149 | 499 | 503 | 439 | |||||||||||||
Net income from continuing operations | |||||||||||||||||
per common share | |||||||||||||||||
Basic | 0.02 | 0.03 | 0.03 | 0.02 | |||||||||||||
Diluted | 0.01 | 0.02 | 0.02 | 0.02 | |||||||||||||
Net income per common share | |||||||||||||||||
Basic | 0.01 | 0.03 | 0.03 | 0.02 | |||||||||||||
Diluted | 0.01 | 0.02 | 0.02 | 0.02 | |||||||||||||
Quarter Ended | |||||||||||||||||
2013 | 31-Dec | 30-Sep | June 30 | 31-Mar | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Total revenue | $ | 1,717 | $ | 1,933 | $ | 1,987 | $ | 1,891 | |||||||||
Operating income | 547 | 752 | 805 | 746 | |||||||||||||
Net income (loss) before income taxes from | (712 | ) | 705 | 754 | 693 | ||||||||||||
continuing operations | |||||||||||||||||
Net income (loss) from continuing operations | (430 | ) | 427 | 456 | 418 | ||||||||||||
Loss from discontinued operations | 780 | - | - | - | |||||||||||||
Net income (loss) | (1,210 | ) | 427 | 456 | 418 | ||||||||||||
Net income (loss) from continuing operations | |||||||||||||||||
per common share | |||||||||||||||||
Basic | (.02 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
Diluted | (.02 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
Net income (loss) per common share | |||||||||||||||||
Basic | (.06 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
Diluted | (.06 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
1_Summary_of_Significant_Accou1
1. Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary Of Significant Accounting Policies Policies | |||||||||||||
Organization | The Company sells and services franchises and/or licenses for non-traditional foodservice operations and stand-alone retail outlets under the trade names “Noble Roman’s Pizza,” “Tuscano’s Italian Style Subs and” “Noble Roman’s Take-N-Pizza”. Unless the context otherwise indicates, reference to the “Company” are to Noble Roman’s, Inc. and its wholly-owned subsidiaries. | ||||||||||||
Principles of Consolidation | The consolidated financial statements include the accounts of Noble Roman’s, Inc. and its wholly-owned subsidiaries, Pizzaco, Inc. and N.R. Realty, Inc. Inter-company balances and transactions have been eliminated in consolidation. | ||||||||||||
Inventories | Inventories consist of food, beverage, restaurant supplies, restaurant equipment and marketing materials and are stated at the lower of cost (first-in, first-out) or market. | ||||||||||||
Property and Equipment | Equipment and leasehold improvements are stated at cost. Depreciation and amortization are computed on the straight-line method over the estimated useful lives ranging from five years to 12 years. Leasehold improvements are amortized over the shorter of estimated useful life or the term of the lease. | ||||||||||||
Cash and Cash Equivalents | Includes actual cash balance. The cash is not pledged nor are there any withdrawal restrictions. | ||||||||||||
Advertising Costs | The Company records advertising costs consistent with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Other Expense topic and Advertising Costs subtopic. This statement requires the Company to expense advertising production costs the first time the production material is used. | ||||||||||||
Use of Estimates | The preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The Company records a valuation allowance in a sufficient amount to adjust the accounts receivables value, in its best judgment, to reflect the amount that the Company estimates will be collected from its total receivables. As any accounts are determined to be permanently impaired (bankruptcy, lack of contact, age of account balance, etc.), they are charged off against the valuation allowance. The Company evaluates its property and equipment and related costs periodically to assess whether any impairment indications are present, including recurring operating losses and significant adverse changes in legal factors or business climate that affect the recovery of recorded value. If any impairment of an individual asset is evident, a loss would be provided to reduce the carrying value to its estimated fair value. | ||||||||||||
Intangible Assets | Debt issue costs are amortized to interest expense ratably over the term of the applicable debt. The debt issue cost being amortized is $162,833 with accumulated amortization at December 31, 2014 of $93,707. | ||||||||||||
Royalties, Administrative and Franchise Fees: Royalties are generally recognized as income monthly based on a percentage of monthly sales of franchised or licensed restaurants and from audits and other inspections as they come due and payable by the franchisee. Fees from the retail products in grocery stores are recognized monthly based on the distributors’ sale of those retail products to the grocery stores or grocery store distributors. Administrative fees are recognized as income monthly as earned. Initial franchise fees are recognized as income when the services for the franchised restaurant are substantially completed. | |||||||||||||
Exit or Disposal Activities Related to Discontinued Operations: The Company records exit or disposal activity for discontinued operations when management commits to an exit or disposal plan and includes those charges under results of discontinued operations, as required by the ASC “Exit or Disposal Cost Obligations” topic. | |||||||||||||
Income Taxes | The Company provides for current and deferred income tax liabilities and assets utilizing an asset and liability approach along with a valuation allowance as appropriate. The Company concluded that no valuation allowance was necessary because it is more likely than not that the Company will earn sufficient income before the expiration of its net operating loss carry-forwards to fully realize the value of the recorded deferred tax asset. As of December 31, 2014, the net operating loss carry-forward was approximately $22.6 million which expires between the years 2018 and 2033. Management made the determination that no valuation allowance was necessary after reviewing the Company’s business plans, relevant known facts to date, recent trends, current performance and analysis of the backlog of franchises sold but not yet open. | ||||||||||||
U.S. generally accepted accounting principles require the Company to examine its tax positions for uncertain positions. Management is not aware of any tax positions that are more likely than not to change in the next 12 months, or that would not sustain an examination by applicable taxing authorities. The Company’s policy is to recognize penalties and interest as incurred in its Consolidated Statements of Operations. None were included for the years ended December 31, 2012, 2013 and 2014. The Company’s federal and various state income tax returns for 2011 through 2014 are subject to examination by the applicable tax authorities, generally for three years after the later of the original or extended due date. | |||||||||||||
Basic and Diluted Net Income Per Share | Net income per share is based on the weighted average number of common shares outstanding during the respective year. When dilutive, stock options and warrants are included as share equivalents using the treasury stock method. | ||||||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2012: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Net income | $ | 624,143 | |||||||||||
Less preferred stock dividends | (99,271 | ) | |||||||||||
Earnings per share – basic | 524,872 | 19,497,638 | $ | 0.03 | |||||||||
Income available to common stockholders | |||||||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 213,606 | |||||||||||
Convertible preferred stock | 99,271 | 366,666 | |||||||||||
Diluted earnings per share | |||||||||||||
Income available to common stockholders and assumed conversions | $ | 624,143 | 20,077,910 | $ | 0.03 | ||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2013: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Net income | $ | 91,097 | |||||||||||
Less preferred stock dividends | (99,000 | ) | |||||||||||
Earnings per share – basic | (7,903 | ) | 19,533,201 | $ | - | ||||||||
Loss available to common stockholders | |||||||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 939,707 | |||||||||||
Convertible preferred stock | 99,000 | - | |||||||||||
Diluted earnings per share | |||||||||||||
Income available to common stockholders and assumed conversions | $ | 91,097 | 20,472,908 | $ | 0.01 | ||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2014: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Earnings per share – basic | |||||||||||||
Net income | 1,590,196 | 19,870,904 | $ | 0.08 | |||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 1,333,535 | |||||||||||
Diluted earnings per share | |||||||||||||
Net income | $ | 1,590,196 | 21,204,439 | $ | 0.07 | ||||||||
Subsequent Events: The Company evaluated subsequent events through the date the consolidated statements were issued and filed with Form 10-K. No subsequent event required recognition or disclosure. |
1_Summary_of_Significant_Accou2
1. Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary Of Significant Accounting Policies Tables | |||||||||||||
Basic and diluted earnings per share | The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2012: | ||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Net income | $ | 624,143 | |||||||||||
Less preferred stock dividends | (99,271 | ) | |||||||||||
Earnings per share – basic | 524,872 | 19,497,638 | $ | 0.03 | |||||||||
Income available to common stockholders | |||||||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 213,606 | |||||||||||
Convertible preferred stock | 99,271 | 366,666 | |||||||||||
Diluted earnings per share | |||||||||||||
Income available to common stockholders and assumed conversions | $ | 624,143 | 20,077,910 | $ | 0.03 | ||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2013: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Net income | $ | 91,097 | |||||||||||
Less preferred stock dividends | (99,000 | ) | |||||||||||
Earnings per share – basic | (7,903 | ) | 19,533,201 | $ | - | ||||||||
Loss available to common stockholders | |||||||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 939,707 | |||||||||||
Convertible preferred stock | 99,000 | - | |||||||||||
Diluted earnings per share | |||||||||||||
Income available to common stockholders and assumed conversions | $ | 91,097 | 20,472,908 | $ | 0.01 | ||||||||
The following table sets forth the calculation of basic and diluted earnings per share for the year ended December 31, 2014: | |||||||||||||
Income | Shares | Per Share | |||||||||||
(Numerator) | (Denominator) | Amount | |||||||||||
Earnings per share – basic | |||||||||||||
Net income | 1,590,196 | 19,870,904 | $ | 0.08 | |||||||||
Effect of dilutive securities | |||||||||||||
Options | - | 1,333,535 | |||||||||||
Diluted earnings per share | |||||||||||||
Net income | $ | 1,590,196 | 21,204,439 | $ | 0.07 |
7_Common_Stock_Tables
7. Common Stock (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Common Stock Tables | |||||||
Employee stock options outstanding | # Common Shares | Exercise Price | |||||
Represented | |||||||
57,500 | $ | 2.3 | |||||
120,000 | 0.36 | ||||||
325,000 | 0.95 | ||||||
1,800,000 | 1.05 | ||||||
101,000 | 0.9 | ||||||
351,000 | 0.58 | ||||||
40,000 | 0.68 | ||||||
270,500 | 1.3 | ||||||
330,000 | 1.55 | ||||||
40,000 | 1.65 | ||||||
Assumptions for grants | Expected volatility | 30% | |||||
Expected dividend yield | None | ||||||
Expected term (in years) | 5 | ||||||
Risk-free interest rate | 1.62% to 2.64% | ||||||
Options outstanding | Balance of employee stock options outstanding as of 12/31/11 | 3,000,500 | |||||
Stock options granted during the year ended 12/31/12 | 401,000 | ||||||
Stock options exercised during the year ended 12/31/12 | (60,000 | ) | |||||
Stock options forfeited during the year ended 12/31/12 | (75,000 | ) | |||||
Balance of employee stock options outstanding as of 12/31/12 | 3,266,500 | ||||||
Stock options granted during the year ended 12/31/13 | 273,000 | ||||||
Stock options exercised during the year ended 12/31/13 | 68,500 | ||||||
Stock options forfeited during the year ended 12/31/13 | 13,500 | ||||||
Balance of employee stock options outstanding as of 12/31/13 | 3,457,500 | ||||||
Stock options granted during the year ended 12/31/14 | 370,000 | ||||||
Stock options exercised during the year ended 12/31/14 | (390,000 | ) | |||||
Stock options forfeited during the year ended 12/31/14 | (2,500 | ) | |||||
Balance of employee stock options outstanding as of 12/31/14 | 3,435,000 | ||||||
Number of non-vested options outstanding | Balance of employee non-vested stock options outstanding as of 12/31/11 | 2,461,000 | |||||
Stock options granted during the year ended 12/31/12 | 401,000 | ||||||
Stock options vested during the year ended 12/31/12 | (600,000 | ) | |||||
Stock options forfeited during the year ended 12/31/12 | (75,000 | ) | |||||
Balance of employee non-vested stock options outstanding as of 12/31/12 | 2,187,000 | ||||||
Stock options granted during the year ended 12/31/13 | 273,000 | ||||||
Stock options vested during the year ended 12/31/13 | (1,031,000 | ) | |||||
Stock options forfeited during the year ended 12/31/13 | (12,500 | ) | |||||
Balance of employee non-vested stock options outstanding as of 12/31/13 | 1,416,500 | ||||||
Stock options granted during the year ended 12/31/14 | 370,000 | ||||||
Stock options vested during the year ended 12/31/14 | (755,000 | ) | |||||
Stock options forfeited during the year ended 12/31/14 | - | ||||||
Balance of employee non-vested stock options outstanding as of 12/31/14 | 1,031,500 |
12_Unaudited_Quarterly_Financi1
12. Unaudited Quarterly Financial Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Unaudited Quarterly Financial Information Tables | |||||||||||||||||
Unaudited Quarterly Financial Information | Quarter Ended | ||||||||||||||||
2014 | 31-Dec | September 30 | June 30 | March 31 | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Total revenue | $ | 1,807 | $ | 2,107 | $ | 2,089 | $ | 1,912 | |||||||||
Operating income | 550 | 857 | 855 | 777 | |||||||||||||
Net income before income taxes from | 501 | 813 | 808 | 727 | |||||||||||||
continuing operations | |||||||||||||||||
Net income from continuing operations | 303 | 499 | 503 | 439 | |||||||||||||
Loss from discontinued operations | 154 | - | - | - | |||||||||||||
Net income | 149 | 499 | 503 | 439 | |||||||||||||
Net income from continuing operations | |||||||||||||||||
per common share | |||||||||||||||||
Basic | 0.02 | 0.03 | 0.03 | 0.02 | |||||||||||||
Diluted | 0.01 | 0.02 | 0.02 | 0.02 | |||||||||||||
Net income per common share | |||||||||||||||||
Basic | 0.01 | 0.03 | 0.03 | 0.02 | |||||||||||||
Diluted | 0.01 | 0.02 | 0.02 | 0.02 | |||||||||||||
Quarter Ended | |||||||||||||||||
2013 | 31-Dec | 30-Sep | June 30 | 31-Mar | |||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Total revenue | $ | 1,717 | $ | 1,933 | $ | 1,987 | $ | 1,891 | |||||||||
Operating income | 547 | 752 | 805 | 746 | |||||||||||||
Net income (loss) before income taxes from | (712 | ) | 705 | 754 | 693 | ||||||||||||
continuing operations | |||||||||||||||||
Net income (loss) from continuing operations | (430 | ) | 427 | 456 | 418 | ||||||||||||
Loss from discontinued operations | 780 | - | - | - | |||||||||||||
Net income (loss) | (1,210 | ) | 427 | 456 | 418 | ||||||||||||
Net income (loss) from continuing operations | |||||||||||||||||
per common share | |||||||||||||||||
Basic | (.02 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
Diluted | (.02 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
Net income (loss) per common share | |||||||||||||||||
Basic | (.06 | ) | 0.02 | 0.02 | 0.02 | ||||||||||||
Diluted | (.06 | ) | 0.02 | 0.02 | 0.02 |
1_Summary_of_Significant_Accou3
1. Summary of Significant Accounting Policies (Details) (USD $) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income (Numerator) | |||||||||||
Net income | $149 | $499 | $503 | $439 | ($1,210) | $427 | $456 | $418 | $1,590,196 | $91,097 | $624,143 |
Less preferred stock dividends | -99,000 | -99,271 | |||||||||
Income available to common stockholders | 1,590,196 | -7,903 | 524,872 | ||||||||
Effect of dilutive securities: convertible preferred stock | 99,000 | 99,271 | |||||||||
Income available to common stockholders and assumed conversions | $91,097 | $624,143 | |||||||||
Shares (Denominator) | |||||||||||
Income available to common stockholders | 19,870,904 | 19,533,201 | 19,497,638 | ||||||||
Effect of dilutive securities: options | 1,333,535 | 93,707 | 213,606 | ||||||||
Effect of dilutive securities: convertible preferred stock | 366,666 | ||||||||||
Income available to common stockholders and assumed conversions | 21,204,439 | 20,472,908 | 20,077,910 | ||||||||
Earnings per share basic | |||||||||||
Income available to common stockholders | $0.08 | $0 | $0.03 | ||||||||
Diluted earnings per share | |||||||||||
Income available to common stockholders and assumed conversions | $0.07 | $0.01 | $0.03 |
1_Summary_of_Significant_Accou4
1. Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Estimated useful lives | 5 years |
Estimated useful lives | 12 years |
Debt issue cost | $162,833 |
Accumulated amortization | 93,707 |
Net operating loss carry-forward | $22,600,000 |
4_Royalties_and_Fees_Details_N
4. Royalties and Fees (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Franchisee | 2,215 | 2,029 | |
Outlets opened | 242 | ||
Outlets closed | 56 | ||
InitialFranchiseeFees [Member] | |||
Royalties and Fees | $313,000 | $788,000 | $294,000 |
EquipmentCommission [Member] | |||
Royalties and Fees | $80,000 | $95,000 | $81,000 |
5_Contingent_Liabilities_for_L1
5. Contingent Liabilities for Leased Facilities (Details Narrative) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
Term of non-cancelable lease agreements minimum | 5 years |
Term of non-cancelable lease agreements maximum | 20 years |
2015 | $71,343 |
2016 | 24,675 |
2017 | 0 |
Future obligations operating leases | 202,785 |
Due in less than one year | 143,770 |
Due in one to three years | $59,014 |
6_Income_Taxes_Details_Narrati
6. Income Taxes (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax asset | $10,580,000 | $9,570,000 | |
Operating losses expiration year | 2018-2033 | 2018-2033 | |
Deferred benefits | 1,100,000 | 568,000 | 753,000 |
Tax benefits from loss on discontinued operations | $97,000 | $512,000 | $344,000 |
7_Common_Stock_Details
7. Common Stock (Details) (USD $) | Dec. 31, 2014 |
Employee Stock Option 1 [Member] | |
Common Shares Represented | 57,500 |
Exercise Price | $2.30 |
Employee Stock Option 2 [Member] | |
Common Shares Represented | 120,000 |
Exercise Price | $0.36 |
Employee Stock Option 3 [Member] | |
Common Shares Represented | 325,000 |
Exercise Price | $0.95 |
Employee Stock Option 4 [Member] | |
Common Shares Represented | 1,800,000 |
Exercise Price | $1.05 |
Employee Stock Option 5 [Member] | |
Common Shares Represented | 101,000 |
Exercise Price | $0.90 |
Employee Stock Option 6 [Member] | |
Common Shares Represented | 351,000 |
Exercise Price | $0.58 |
Employee Stock Option 8 [Member] | |
Common Shares Represented | 40,000 |
Exercise Price | $0.68 |
Employee Stock Option 7 [Member] | |
Common Shares Represented | 270,500 |
Exercise Price | $1.30 |
Employee Stock Option 9 [Member] | |
Common Shares Represented | 330,000 |
Exercise Price | $1.55 |
Employee Stock Option 10 [Member] | |
Common Shares Represented | 40,000 |
Exercise Price | $1.65 |
7_Common_Stock_Details_1
7. Common Stock (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equity [Abstract] | |||
Expected volatility, Minimum | 30.00% | 30.00% | 30.00% |
Expected dividend yield | $0 | $0 | $0 |
Expected term (in years) | 5 years | 5 years | 5 years |
Risk-free interest rate, Minimum | 1.62% | 1.62% | 1.62% |
Risk-free interest rate, Maximum | 2.64% | 2.64% | 2.64% |
7_Common_Stock_Details_2
7. Common Stock (Details 2) (Employee Stock Option [Member]) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Stock Option [Member] | |||
Balance of employee stock options outstanding | 3,457,500 | 3,266,500 | 3,000,500 |
Stock options granted | 370,000 | 273,000 | 401,000 |
Stock options exercised | -390,000 | 68,500 | -60,000 |
Stock options forfeited | -2,500 | 13,500 | -75,000 |
Balance of employee stock options outstanding | 3,435,000 | 3,457,500 | 3,266,500 |
7_Common_Stock_Details_3
7. Common Stock (Details 3) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Equity [Abstract] | |||
Balance of employee non-vested stock options outstanding | 1,416,500 | 2,187,000 | 2,461,000 |
Stock options granted | 370,000 | 273,000 | 401,000 |
Stock options vested | -755,000 | -1,031,000 | -600,000 |
Stock options forfeited | 0 | -12,500 | -75,000 |
Balance of employee non-vested stock options outstanding | 1,031,500 | 1,416,500 | 2,187,000 |
9_Loss_from_Discontinued_Opera1
9. Loss from Discontinued Operations (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Loss on discontinued operations | $154,000 | $780,000 | $525,000 |
Additional loss | $139,600 | $147,000 | $415,000 |
12_Unaudited_Quarterly_Financi2
12. Unaudited Quarterly Financial Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $1,807 | $2,107 | $2,089 | $1,912 | $1,717 | $1,933 | $1,987 | $1,891 | $7,915,215 | $7,527,439 | $7,300,132 |
Operating income | 550 | 857 | 855 | 777 | 547 | 752 | 805 | 746 | 3,038,932 | 2,849,486 | 2,815,522 |
Net income before income taxes from continuing operations | 501 | 813 | 808 | 727 | -712 | 705 | 754 | 693 | 2,848,550 | 1,439,943 | 1,902,188 |
Net income from continuing operations | 303 | 499 | 503 | 439 | -430 | 427 | 456 | 418 | 1,743,741 | 871,537 | 1,148,731 |
Loss from discontinued operations | 154 | 0 | 0 | 0 | 780 | 0 | 0 | 0 | -153,545 | -780,440 | -524,588 |
Net income | $149 | $499 | $503 | $439 | ($1,210) | $427 | $456 | $418 | $1,590,196 | $91,097 | $624,143 |
Net income from continuing operations per common share | |||||||||||
Basic | $0.02 | $0.03 | $0.03 | $0.02 | ($0.02) | $0.02 | $0.02 | $0.02 | $0.09 | $0.05 | $0.06 |
Diluted | $0.01 | $0.02 | $0.02 | $0.02 | ($0.02) | $0.02 | $0.02 | $0.02 | $0.08 | $0.05 | $0.06 |
Net income per common share | |||||||||||
Basic | $0.01 | $0.03 | $0.03 | $0.02 | ($0.06) | $0.02 | $0.02 | $0.02 | $0.08 | $0.01 | $0.03 |
Diluted | $0.01 | $0.02 | $0.02 | $0.02 | ($0.06) | $0.02 | $0.02 | $0.02 |