Noble Romans (NROM) 10-Q 13 Nov 24 2024 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2024	Nov. 11, 2024
Cover [Abstract]
Entity Registrant Name	NOBLE ROMAN’S, INC.
Entity Central Index Key	0000709005
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding		22,215,512
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-11104
Entity Incorporation State Country Code	IN
Entity Tax Identification Number	35-1281154
Entity Address Address Line 1	6612 E
Entity Address Address Line 2	75th Street
Entity Address Address Line 3	Suite 450
Entity Address City Or Town	Indianapolis
Entity Address State Or Province	IN
Entity Address Postal Zip Code	46250
City Area Code	317
Local Phone Number	634-3377
Entity Interactive Data Current	Yes

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash	$ 551,479	$ 872,335
Employee Retention Tax Credit Receivable	507,726	507,726
Accounts receivable - net	782,500	1,169,446
Inventories	966,285	965,819
Prepaid expenses	162,445	318,195
Total current assets	2,970,435	3,833,521
Property and equipment:
Equipment	4,443,018	4,386,430
Leasehold improvements	3,141,101	3,130,430
Leasehold improvements, net	7,584,119	7,516,860
Less accumulated depreciation and amortization	3,485,627	3,196,993
Net property and equipment	4,098,492	4,319,867
Deferred tax asset	3,374,841	3,374,841
Deferred contract cost	1,403,899	1,403,299
Goodwill	278,466	278,466
Operating lease right of use assets	4,354,294	4,930,014
Other assets including long-term portion of receivables-net	367,645	339,817
Total assets	16,848,072	18,479,825
Current liabilities:
Accounts payable and accrued expenses	458,811	1,284,210
Current portion of operating lease liability	852,428	799,165
Current portion of Corbel loan payable	6,756,267	1,000,000
Subordinated note payable	575,000	0
Warrant liability	538,822	540,650
Total current liabilities	9,181,328	3,624,025
Long-term obligations:
Term loan payable to Corbel net of current portion	0	6,133,691
Convertible notes payable	0	575,000
Operating lease liabilities - net of short-term portion	3,730,787	4,378,927
Deferred contract income	1,563,718	1,577,299
Total long-term liabilities	5,294,505	12,664,917
Total liabilities	14,475,833	16,288,942
Stockholders' equity:
Common stock - no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2023 and as of September 30, 2024)	24,857,787	24,840,126
Accumulated deficit	(22,485,548)	(22,649,243)
Total stockholders' equity	2,372,239	2,190,883
Total liabilities and stockholders' equity	$ 16,848,072	$ 18,479,825

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheets
Common Stock, Par Value	$ 0	$ 0
Common Stock, Authorized Shares	40,000,000	40,000,000
Common Stock, Issued Shares	22,215,512	22,215,512
Common Stock, Outstanding Shares	22,215,512	22,215,512

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Restaurant revenue - company-owned restaurants	$ 2,195,167	$ 2,175,219	$ 6,413,242	$ 6,639,213
Restaurant revenue - company-owned non-traditional	218,193	247,252	693,045	707,217
Franchising revenue	1,437,664	1,310,284	4,298,703	3,671,160
Administrative fees and other	29,142	6,657	45,959	22,068
Total revenue	3,880,166	3,739,412	11,450,949	11,039,658
Operating expenses:
Restaurant expenses - company-owned restaurants	2,021,828	1,974,635	5,831,544	5,914,648
Restaurant expenses - company-owned non-traditional	269,675	240,245	730,723	566,225
Franchising expenses	499,781	395,777	1,450,143	(36,255)
Total operating expenses	2,791,284	2,610,657	8,012,410	6,444,618
Depreciation and amortization	96,068	95,517	288,634	286,550
General and administrative expenses	566,275	519,291	1,713,691	1,564,433
Defense against activist shareholder	9,916	0	29,458	0
Total expenses	3,463,543	3,225,465	10,044,193	8,295,602
Operating income	416,623	513,947	1,406,756	2,744,056
Interest expense	415,524	359,431	1,244,889	1,121,505
(Decrease) in fair value of warrant	(192,215)	0	(1,828)	0
Income before income taxes	193,314	154,516	163,695	1,622,551
Income tax expense	0	0	0	274,190
Net income	$ 193,314	$ 154,516	$ 163,695	$ 1,348,361
Earnings per share - basic:
Net income before income tax basic	$ 0.01	$ 0.01	$ 0.01	$ 0.07
Net income basic	$ 0.01	$ 0.01	$ 0.01	$ 0.06
Weighted average number of common shares outstanding	22,215,512	22,215,512	22,215,512	22,215,512
Diluted earnings per share:
Net income before income tax diluted	$ 0.01	$ 0.01	$ 0.01	$ 0.07
Net income diluted	$ 0.01	$ 0.01	$ 0.01	$ 0.06
Weighted average number of common shares outstanding diluted	24,149,723	23,581,300	24,368,453	23,581,300

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($)	Total	Common Stock	Accumulated Deficit
Balance, shares at Dec. 31, 2022		22,215,512
Balance, amount at Dec. 31, 2022	$ 710,209	$ 24,819,736	$ (24,109,527)
Net income for nine months ended September 30, 2023	1,348,361		1,348,361
Amortization of value of employee stock options	17,869	$ 17,869
Balance, shares at Sep. 30, 2023		22,215,512
Balance, amount at Sep. 30, 2023	2,076,439	$ 24,837,605	(22,761,166)
Balance, shares at Jun. 30, 2023		22,215,512
Balance, amount at Jun. 30, 2023	1,916,845	$ 24,832,525	(22,915,680)
Net income for nine months ended September 30, 2023	154,514		154,514
Amortization of value of employee stock options	5,080	$ 5,080
Balance, shares at Sep. 30, 2023		22,215,512
Balance, amount at Sep. 30, 2023	2,076,439	$ 24,837,605	(22,761,166)
Balance, shares at Dec. 31, 2023		22,215,512
Balance, amount at Dec. 31, 2023	2,190,883	$ 24,840,126	(22,649,243)
Net income for nine months ended September 30, 2023	163,695		163,695
Amortization of value of employee stock options	17,661	$ 17,661
Balance, shares at Sep. 30, 2024		22,215,512
Balance, amount at Sep. 30, 2024	2,372,239	$ 24,857,787	(22,485,548)
Balance, shares at Jun. 30, 2024		22,215,512
Balance, amount at Jun. 30, 2024	2,167,247	$ 24,846,109	(22,678,862)
Net income for nine months ended September 30, 2023	193,314		193,314
Amortization of value of employee stock options	11,678	$ 11,678
Balance, shares at Sep. 30, 2024		22,215,512
Balance, amount at Sep. 30, 2024	$ 2,372,239	$ 24,857,787	$ (22,485,548)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Condensed Consolidated Statements of Cash Flows (Unaudited)
Net income	$ 163,695	$ 1,348,361
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of warrant	(1,828)	0
Depreciation and amortization	288,634	286,549
Interest paid-in-kind	195,351	192,758
Stock option expense	17,661	17,869
Amortization of loan cost	177,225	137,999
Non-cash lease expense	833,485	845,902
Deferred income taxes	0	274,190
(Increase) decrease in:
Employee Retention Tax Credit	0	(507,726)
Accounts receivable	386,946	14,284
Inventories	(466)	55,105
Prepaid expenses	155,750	(266,495)
Deferred contract income net of deferred contract cost	(14,181)
Other assets including long-term portion of receivables	(27,828)	(45,746)
(Decrease) in:
Accounts payable and accrued expenses	(825,399)	(458,143)
Lease liability	(852,642)	(838,492)
NET CASH PROVIDED BY OPERATING ACTIVITIES	496,403	1,056,415
INVESTING ACTIVITIES
Purchase of property and equipment	(67,259)	(29,781)
NET CASH USED IN INVESTING ACTIVITIES	(67,259)	(29,781)
FINANCING ACTIVITIES
Principal payment of convertible notes	0	(50,000)
Principal payments on Corbel term loan	(750,000)	(1,198,510)
Lease liabilities	0	0
NET CASH USED BY FINANCING ACTIVITIES	(750,000)	(1,248,510)
Decrease in cash	(320,856)	(221,876)
Cash at beginning of period	872,335	785,522
Cash at end of period	551,479	563,646
Supplemental schedule of investing and financing activities
Cash paid for interest	$ 901,357	793,692
Cash paid for income taxes		$ 0

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2024
Basis of Presentation and Summary of Significant Accounting Policies
Basis Of Presentation And Summary Of Significant Accounting Policies	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, 2023 (the “2023 Form 10-K”) 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 nine-month periods ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. Significant Accounting Policies There have been no significant changes in the Company’s accounting policies from those disclosed in the 2023 Form 10-K. During the first quarter of 2023, the Company determined that it is entitled to an Employee Retention Tax Credit (“ERTC”) of $1.718 million and has submitted amended Federal Form 941 returns claiming that refund. The ERTC refund is treated as a government grant reducing appropriate expenses for the $1.718 million less expenses for applying for the refund of $258,000, or a net of $1.46 million, which primarily affected the franchising venue as other operating expenses, a much smaller amount to general and administrative expenses and approximately $83,000 of the refund was to the Company’s subsidiary, RH Roanoke. This refund applied both to Noble Roman’s, Inc. and its subsidiary, RH Roanoke, Inc. Although the refund was recorded in the first quarter of 2023, it effectively reimbursed for expenses and lost revenue that occurred over several prior quarters which distorts the comparability of the nine months of 2024 with the nine months of 2023. To date the Company has received all five quarterly refunds for Roanoke, Inc. and three refunds for 2020 and one of the two quarterly refunds for 2021 for Noble Roman’s, Inc. In recent communications, the Internal Revenue Service (the “IRS”), indicated the final refund claim had been received and was in process, but the IRS was significantly behind in processing refunds and would get caught up as soon as possible. In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company will adopt ASU 2023-09 for fiscal year ending December 31, 2025. Management does not believe that there are any recently issued and effective or not yet effective accounting pronouncements as of September 30, 2024 that would have or are expected to have any significant effect on the Company’s financial position, cash flows or income statement.

Restatement of Previously Issue

Restatement of Previously Issued Consolidated Financial Statements	9 Months Ended
	Sep. 30, 2024
Restatement of Previously Issued Consolidated Financial Statements
Restatement of Previously Issued Consolidated Financial Statements	Note 2 – As discussed in Note 2 of the 2023 Form 10-K, accounts payable and other accrued expenses along with accumulated deficit were restated for the first half of 2023 to reflect the balances carried forward from the restated 2022 amounts.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2024
Inventory
Inventory	Note 3 – Inventory consists of ingredient inventory used to make products in the Company-owned restaurants, marketing materials to sell to franchisees and equipment inventory to be used in future locations. At September 30, 2024 and December 31, 2023 inventory consisted of the following: As of 12/31/23 As of 9/30/24 Ingredient inventory used to make products in company locations $ 157,861 $ 153,074 Marketing materials 27,086 32,339 Equipment inventory 780,872 780,872 Total $ 965,819 $ 966,285

Royalties and Fees

Royalties and Fees	9 Months Ended
	Sep. 30, 2024
Royalties and Fees
Royalties And Fees	Note 4 – Royalties and fees included initial franchise fees of $192,538 (after deferring initial fees of $180,000 and amortizing $164,538 of previously deferred fees and receiving $28,000 in transfer fees) for the nine-month period ended September 30, 2024, and $130,596 for the nine-month period ended September 30, 2023. Royalties and fees included equipment commissions of $104,456 for the nine-month period ended September 30, 2024, and $62,951 for the nine-month period ended September 30, 2023. Royalties and fees, including amortized initial franchise fees and equipment commissions, were $4.30 million for the nine-month period ended September 30, 2024, and $3.67 million for the nine-month period ended September 30, 2023. 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 deferred contract income was $1,563,718 and deferred costs were $1,403,899 as of September 30, 2024. The deferred contract income was $1,577,299 and deferred cost were $1,403,299 as of December 31, 2023. The deferred contract income and deferred costs were both $934,036 as of December 31, 2022. At December 31, 2023 and September 30, 2024, the carrying values of the Company’s franchise receivables have been reduced to anticipated realizable value. After considering this reduction of carrying value, the Company anticipates that substantially all of its accounts receivable reflected on the consolidated balance sheet as of September 30, 2024, will be collected. During the three-month and nine-month periods ended September 30, 2024 there were no Company-operated or franchised Craft Pizza & Pub restaurants opened or closed. There have been 51 new non-traditional locations opened thus far this year. The Company plans to open an additional 20 to 25 franchise locations prior to December 31, 2024.

Loans Payable

Loans Payable	9 Months Ended
	Sep. 30, 2024
Loans Payable
Loans Payable	Note 5 – As the Company reported previously, it is pursuing plans for new financing to repay the loan from Corbel Capital Partners SBIC, L.P. (the “Purchaser” or “Corbel”) and to repay the subordinated notes. There can be no assurance that the Company will be able to obtain the financing as planned on favorable terms or at all. However, based on its credit metrics, including its recent and forecasted earnings before interest, taxes and depreciation and amortization, the Company believes it will be able to complete the refinancing. Based on terms indicated in ongoing discussions between the Company and potential lenders, the Company currently expects the refinancing will result in some reduction in its effective interest rate and without any equity-dilutive provisions such as were present in its current financing arrangement with Corbel.

Earnings (Loss) per Share

Earnings (Loss) per Share	9 Months Ended
	Sep. 30, 2024
Earnings (Loss) per Share
Earnings (loss) Per Share	Note 6 - The following table sets forth the calculation of basic and diluted earnings per share for the nine-month period ended September 30, 2024. The comparability of results for the nine months ended September 30, 2024 and the nine months ended September 30, 2023 is limited because net income of $1,348,361 for the nine months ended September 30, 2023 included $1.46 million of expenses reimbursed by the ERTC refund which related to periods before the nine months ended September 30, 2023. Without that refund being recorded in the first quarter of 2023, the Company would have reported a net loss of approximately $110,000. The ERTC refund reflected excess costs and lost revenue incurred by the Company as a result of government restrictions in an attempt to prevent the spread of a novel strain of Coronavirus (“COVID”). The following table sets forth the calculation of basic and diluted earnings per share for the three-month periods ended September 30, 2024 and September 30, 2023: Three Months Ended September 30, 2024 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 193,314 22,215,512 $ 0.01 Effect of dilutive securities Stock option and warrant dilution 684,211 Convertible notes 14,375 1,250,000 Diluted earnings per share Net income $ 207,689 24,149,723 $ 0.01 Three Months Ended September 30, 2023 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 154,516 22,215,512 $ 0.01 Effect of dilutive securities Stock option and warrant dilution - 115,778 Convertible notes 14,375 1,250,000 Diluted earnings per share Net income $ 168,891 23,581,290 $ 0.01 The following table sets forth the calculation of basic and diluted earnings per share for the nine-month periods ended September 30, 2024 and September 30, 2023: Nine Months Ended September 30, 2024 Income (loss) (Numerator) Shares (Denominator) Per-Share Amount Net income $ 163,695 22,215,512 $ 0.01 Effect of dilutive securities Stock option and warrant dilution 902,941 Convertible notes 43,125 1,250,000 Diluted earnings per share Net income $ 206,820 24,368,453 $ 0.01 Nine Months Ended September 30, 2023 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 1,348,361 22,215,512 $ 0.06 Effect of dilutive securities Stock option and warrant dilution - 115,788 Convertible notes 44,375 1,250,000 Diluted earnings per share Net income $ 1,392,736 23,581,300 $ 0.06

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2024
Notes Payable
Notes Payable	Note 7 – On February 7, 2020, the Company entered into a Senior Secured Promissory Note and Warrant Purchase Agreement (as amended, the “Agreement”) with Corbel. Pursuant to the Agreement, the Company issued to the Purchaser a senior secured promissory note (as amended, the “Senior Note”) in the initial principal amount of $8.0 million. The Company used the net proceeds of the Agreement as follows: (i) $4.2 million was used to repay the Company’s then-existing bank debt which was in the original amount of $6.1 million; (ii) $1.275 million was used to repay the portion of the Company’s existing subordinated convertible debt the maturity date of which most had not previously been extended; (iii) to pay debt issuance costs; and (iv) the remaining net proceeds were used for working capital or other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations. The Senior Note bears cash interest of SOFR, as defined in the Agreement, plus 7.75% for an aggregate rate of 13.11% at September 30, 2024 and 13.16% at September 30, 2023. In addition, the Senior Note requires payment-in-kind interest (“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. Beginning in March 2023, the Senior Note requires principal payments of $83,333 per month continuing until maturity in February 2025, all payments were current as of September 30, 2024 and the Company was in compliance with the covenants in the Agreement. In conjunction with the borrowing under the Senior Note, the Company issued to the Purchaser a warrant (as amended, 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 $0.30 per share (“Tranche 1”), (ii) 900,000 shares of Common Stock at an exercise price of $0.30 per share (“Tranche 2”), and (iii) 150,000 shares of Common Stock at an exercise price of $0.30 per share (“Tranche 3”). 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, at the Company's discretion. The Corbel Warrant expires on the seventh anniversary of the date of its issuance. At September 30, 2024, the balance of the Senior Note was comprised of: Principal $ 6,958,692 Unamortized Warrant Discount and Loan Closing Cost (202,425 ) Carrying Value $ 6,756,267

Fair Value of Warrant Laibility

Fair Value of Warrant Laibility	9 Months Ended
	Sep. 30, 2024
Fair Value of Warrant Laibility
Fair Value of Warrant Laibility	Note 8 – Warrant liability of $540,650 using the Black-Scholes method of calculation was included in the balance sheet as of December 31, 2023 and $538,822 as of September 30, 2024. The following assumptions were used to arrive at the fair value of the warrant liability as of September 30, 2024: Expected volatility 143 % Expected term (in years) 2.35 Risk-free interest rate 3.66 %

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2024
Contingencies
Contingencies	Note 9 – The Company, from time to time, is or may become involved in 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. There are no commitments to any key executives or officers beyond an employment agreement with each of the Executive Chairman and Chief Financial Officer and the President and Chief Executive Officer.

Current and Deferred tax

Current and Deferred tax	9 Months Ended
	Sep. 30, 2024
Current and Deferred tax
Current and deferred tax	Note 10 - For the three months ended September 30, 2024, the Company recorded no current and deferred tax expense for an effective tax rate of 0% compared to no current and deferred tax expense for the three months ended September 30, 2023 for an effective tax rate of 0%. For the nine months ended September 30, 2024, the Company recorded no current and deferred tax expense for an effective tax rate of 0% compared to $274,190 of current and deferred tax expense for the nine months ended September 30, 2023 for an effective tax rate of 16.8%. The effective tax rates have differed from the statutory rate primarily due to changes in the valuation allowance.

Fair Value of Stock Option Awar

Fair Value of Stock Option Awards	9 Months Ended
	Sep. 30, 2024
Fair Value of Stock Option Awards
Fair Value of Stock Option Awards	Note 11 - 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 the issuance of 984,334 stock option grants during the quarter ended September 30, 2024: Expected volatility 143 % Expected dividend yield N/A Expected term (in years) 7 Risk-free interest rate 3.66 % Impact of COVID Pandemic In the first quarter of 2020, COVID emerged and spread throughout the United States. The World Health Organization recognized COVID as a pandemic in March 2020. In response to the pandemic, the U.S. federal government and various state and local governments, 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. 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 operations of dine-in restaurants and other businesses in light of COVID which negatively affected the Company’s operations. 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 sales of franchises. In addition locations in the entertainment segment were forced and, in most states, required them to be closed for two years. Most of those locations did not have the financial ability left after that closure to reopen. 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 some potential franchisees for both the Company’s Craft Pizza & Pub and non-traditional venues. As described in Note 1 above, the Company applied for and has received payments in respect of the ERTC provided by the Coronavirus Aid, Relief and Economic Security Act enacted to address the economic effects of the pandemic and related shut-down orders imposed on businesses. Although the refund was recorded in the first quarter of 2023, it reflected expenses and lost revenue incurred by the Company over several prior quarters which distorts the comparability of the results for first quarter and nine months of 2024 with the corresponding periods of 2023.

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2024
Basis of Presentation and Summary of Significant Accounting Policies
Significant Accounting Policies	There have been no significant changes in the Company’s accounting policies from those disclosed in the 2023 Form 10-K. During the first quarter of 2023, the Company determined that it is entitled to an Employee Retention Tax Credit (“ERTC”) of $1.718 million and has submitted amended Federal Form 941 returns claiming that refund. The ERTC refund is treated as a government grant reducing appropriate expenses for the $1.718 million less expenses for applying for the refund of $258,000, or a net of $1.46 million, which primarily affected the franchising venue as other operating expenses, a much smaller amount to general and administrative expenses and approximately $83,000 of the refund was to the Company’s subsidiary, RH Roanoke. This refund applied both to Noble Roman’s, Inc. and its subsidiary, RH Roanoke, Inc. Although the refund was recorded in the first quarter of 2023, it effectively reimbursed for expenses and lost revenue that occurred over several prior quarters which distorts the comparability of the nine months of 2024 with the nine months of 2023. To date the Company has received all five quarterly refunds for Roanoke, Inc. and three refunds for 2020 and one of the two quarterly refunds for 2021 for Noble Roman’s, Inc. In recent communications, the Internal Revenue Service (the “IRS”), indicated the final refund claim had been received and was in process, but the IRS was significantly behind in processing refunds and would get caught up as soon as possible. In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” which is intended to simplify various aspects related to accounting for income taxes. ASU 2023-09 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The amendments in ASU 2023-09 are effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company will adopt ASU 2023-09 for fiscal year ending December 31, 2025. Management does not believe that there are any recently issued and effective or not yet effective accounting pronouncements as of September 30, 2024 that would have or are expected to have any significant effect on the Company’s financial position, cash flows or income statement.

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2024
Inventory
Schedule of inventory	As of 12/31/23 As of 9/30/24 Ingredient inventory used to make products in company locations $ 157,861 $ 153,074 Marketing materials 27,086 32,339 Equipment inventory 780,872 780,872 Total $ 965,819 $ 966,285

Earnings (Loss) per Share (Tabl

Earnings (Loss) per Share (Tables)	9 Months Ended
	Sep. 30, 2024
Earnings (Loss) per Share
Basic And Diluted Earnings (loss) Per Share	Three Months Ended September 30, 2024 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 193,314 22,215,512 $ 0.01 Effect of dilutive securities Stock option and warrant dilution 684,211 Convertible notes 14,375 1,250,000 Diluted earnings per share Net income $ 207,689 24,149,723 $ 0.01 Three Months Ended September 30, 2023 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 154,516 22,215,512 $ 0.01 Effect of dilutive securities Stock option and warrant dilution - 115,778 Convertible notes 14,375 1,250,000 Diluted earnings per share Net income $ 168,891 23,581,290 $ 0.01 Nine Months Ended September 30, 2024 Income (loss) (Numerator) Shares (Denominator) Per-Share Amount Net income $ 163,695 22,215,512 $ 0.01 Effect of dilutive securities Stock option and warrant dilution 902,941 Convertible notes 43,125 1,250,000 Diluted earnings per share Net income $ 206,820 24,368,453 $ 0.01 Nine Months Ended September 30, 2023 Income (Numerator) Shares (Denominator) Per-Share Amount Net income $ 1,348,361 22,215,512 $ 0.06 Effect of dilutive securities Stock option and warrant dilution - 115,788 Convertible notes 44,375 1,250,000 Diluted earnings per share Net income $ 1,392,736 23,581,300 $ 0.06

Notes Payable (Tables)

Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2024
Notes Payable
Schedule ofCredit Facility	Principal $ 6,958,692 Unamortized Warrant Discount and Loan Closing Cost (202,425 ) Carrying Value $ 6,756,267

Fair Value of Warrant Laibili_2

Fair Value of Warrant Laibility (Tables)	9 Months Ended
	Sep. 30, 2024
Fair Value of Warrant Laibility
Schedule of Fair Value of Warrant Liability	Expected volatility 143 % Expected term (in years) 2.35 Risk-free interest rate 3.66 %

Fair Value of Stock Option (Tab

Fair Value of Stock Option (Tables)	9 Months Ended
	Sep. 30, 2024
Fair Value of Warrant Laibility
Schedule of Fair Value of Stock Option	Expected volatility 143 % Expected dividend yield N/A Expected term (in years) 7 Risk-free interest rate 3.66 %

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Basis of Presentation and Summary of Significant Accounting Policies
Net operating loss carry-forward	$ 1,718,000	$ 1,718,000
Net benefit or refund on Employee Retention Tax Credit	1,460,000
Deferred tax credits	258,000
General and administrative expenses	$ 83,000

Inventory (Details)

Inventory (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Inventory
Ingredient inventory used to make products in company locations	$ 153,074	$ 157,861
Marketing materials	32,339	27,086
Equipment inventory	780,872	780,872
Total	$ 966,285	$ 965,819

Royalties and Fees (Details Nar

Royalties and Fees (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Royalties And Fees	$ 192,538	$ 130,596
Deferred cost	1,403,899		$ 1,403,299	$ 934,036
Deferred contract income	$ 1,563,718		$ 1,577,299	$ 934,036
Description of royalty and fees	after deferring initial fees of $180,000 and amortizing $164,538 of previously deferred fees and receiving $28,000 in transfer fees
Amortized Initial Franchise Fees and Equipment Commissions
Royalties And Fees	$ 4,300,000	3,670,000
Equipment Commission
Royalties And Fees	$ 104,456	$ 62,951

Earnings (Loss) per Share (Deta

Earnings (Loss) per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net income (loss)	$ 193,314	$ 154,516	$ 163,695	$ 1,348,361
Weighted Average Number of Common Shares Outstanding, Basic	22,215,512	22,215,512	22,215,512	22,215,512
Earnings per Share, Basic	$ 0.01	$ 0.01	$ 0.01	$ 0.06
Stock and warrant dilution	684,211	115,778	902,941	115,788
Diluted Earnings Per Share Net Loss	$ 207,689	$ 168,891	$ 206,820	$ 1,392,736
Weighted Average Number of Diluted Shares Adjustment	24,149,723	23,581,290	24,368,453	23,581,300
Diluted Earnings per Share Net Income (loss)	$ 0.01	$ 0.01	$ 0.01	$ 0.06
Convertible Note Payable
Effect Of Dilutive Securities	$ 14,375	$ 14,375	$ 43,125	$ 44,375
Shares Denominator	1,250,000	1,250,000	1,250,000	1,250,000

Earnings (Loss) per Share (De_2

Earnings (Loss) per Share (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net income	$ 193,314	$ 154,514	$ 163,695	$ 1,348,361
Basic And Diluted Earnings [Member]
Reimbursement expenses by ERTC				$ 1,460,000
Description of first quarter				the Company would have reported a net loss of approximately $110,000
Net income				$ 1,348,361

Notes Payable (Details)

Notes Payable (Details)	Sep. 30, 2024 USD ($)
Notes Payable
Principal	$ 6,958,692
Unamortized Warrant Discount and Loan Closing Cost	(202,425)
Carrying value	$ 6,756,267

Note payable (Details Narrative

Note payable (Details Narrative) - USD ($)		9 Months Ended
	Feb. 07, 2020	Sep. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Convertible notes payable		$ 0	$ 575,000
Interest Rate	7.75%	13.11%		13.16%
Tranche 1 [Member]
Purchase Shares of Common Stock	1,200,000
Exercise Price	$ 0.30
Tranche 2 [Member]
Purchase Shares of Common Stock	900,000
Exercise Price	$ 0.30
Tranche 3 [Member]
Purchase Shares of Common Stock	150,000
Exercise Price	$ 0.30
Secured Promissory Note [Member]
Purchase Shares of Common Stock	2,250,000
Convertible notes payable		$ 83,333
Bank Loan	$ 8,000,000
Original Amount	$ 6,100,000
Desription of amendment to the Agreement changing	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 were used for working capital or other general corporate purposes, including development of new Company-owned Craft Pizza & Pub locations
Repayments of Senior Debt	$ 4,200,000
Convertible Debt	$ 1,275,000
Interest Rate per Annum	3%
Maturity Date		February 2025

Fair Value of Warrant Laibili_3

Fair Value of Warrant Laibility (Details)	9 Months Ended
	Sep. 30, 2024
Fair Value of Warrant Laibility
Expected volatility	143%
Expected term (in years)	2 years 4 months 6 days
Risk-free interest rate	3.66%

Fair Value of Warrant Laibili_4

Fair Value of Warrant Laibility (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Fair Value of Warrant Laibility
Warrant liability	$ 538,822	$ 540,650

Current and Deferred tax (Detai

Current and Deferred tax (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Current and Deferred tax
Current and deferred tax rate	0%	0%	0%	16.80%
Current and deferred tax expense			$ 0	$ 274,190

Fair Value of Stock Option Aw_2

Fair Value of Stock Option Awards (Details)	9 Months Ended
	Sep. 30, 2024
Expected volatility	143%
Expected term (in years)	2 years 4 months 6 days
Risk-free interest rate	3.66%
Equity Option [Member]
Expected volatility	143%
Expected dividend yield	0%
Expected term (in years)	7 years
Risk-free interest rate	3.66%

Fair Value of Stock Option Aw_3

Fair Value of Stock Option Awards (Details Narrative)	9 Months Ended
	Sep. 30, 2024 shares
Fair Value of Stock Option Awards
Number of shares granted	984,334