Noble Roman’s, Inc. 2025 Annual Report: Key Highlights and Investor Analysis
Executive Summary
Noble Roman’s, Inc. (Nasdaq OTCQB: NROM) has released its Form 10-K for the fiscal year ended December 31, 2025. The report provides a comprehensive overview of the company’s operations, financial performance, capital structure, and key risks. Several items may be of particular interest to shareholders and may influence the company’s share price.
Key Financial Highlights
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Revenue and Profitability:
- Total revenues for 2025 were \$8,771,389, compared to the previous year’s \$8,802,650, reflecting a relatively stable top line.
- Net loss for 2025 was \$(3,174), indicating the company was near break-even for the year.
- Margin contribution for 2025 was \$886,395, or 10.1% of revenues, compared to \$783,350 (9.2%) in 2024, reflecting modest improvement in operating leverage.
- Interest expense decreased from \$1,637,398 in 2024 to \$1,336,773 in 2025, supported by reduced principal on the Senior Note and more favorable interest terms after an April 2025 amendment.
- The company recorded a positive change in fair value of warrants of \$417,472 in 2025, compared to a negative change of \$(157,358) in 2024.
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Balance Sheet and Liquidity:
- Total assets increased significantly from \$6,769,247 in 2024 to \$15,894,484 in 2025, mainly due to the recognition of right-of-use assets under ASC 842 and other asset increases.
- Current assets were \$3,246,631 at year end 2025, up from \$2,986,384 in 2024.
- Current liabilities surged to \$8,198,440 from \$3,285,888, reflecting upcoming debt maturities, especially the Senior Note due June 30, 2026.
- Stockholders’ equity increased to \$3,431,948 from \$2,215,361 the prior year.
- The company’s current ratio fell to 0.40-to-1 from 0.91-to-1, highlighting a more pressured liquidity position as key debt maturities approach.
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Capital Structure and Debt:
- As of December 31, 2025, the company had \$5.5 million in outstanding variable-rate debt, with interest at SOFR + 9.0% (with a SOFR floor of 4.25%).
- The Senior Note matures on June 30, 2026. Both the Senior Note and subordinated convertible notes are classified as current liabilities.
- Every 1% increase in SOFR would increase annual interest expense by approximately \$57,000.
- The company has not declared or paid dividends, and its loan agreement prohibits dividends on common stock.
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Share Data:
- Common shares outstanding as of May 14, 2026: 22,215,512
- Public float (market value of shares held by non-affiliates) as of June 30, 2025: ~\$4.04 million
- Approximately 200 holders of record as of April 7, 2026.
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Equity Compensation:
- The company maintains an employee stock option plan with no maximum number of shares issuable. As of December 31, 2025, 3,973,834 options were outstanding under plans not approved by shareholders, with a weighted-average exercise price of \$0.38.
Key Risks and Price-Sensitive Issues
- Debt Maturities and Refinancing Risk: The Senior Note, a significant component of the company’s capital structure, matures on June 30, 2026. The company’s ability to service and refinance this debt is uncertain. Failure to refinance or repay could result in substantial financial distress or dilution for shareholders.
- Liquidity Concerns: The current ratio has declined to 0.40, indicating that short-term obligations (including the upcoming Senior Note maturity) far exceed current assets. This is a material risk for the company and may impact its ability to continue as a going concern unless addressed.
- Variable Interest Rate Exposure: With \$5.5 million in variable-rate debt, further increases in SOFR will directly increase interest costs, reducing profitability and cash flow.
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Corporate Governance and Shareholder Risks:
- The company is not subject to the corporate governance requirements of a national exchange. For example, it does not have a majority of independent directors or a separate, independent audit committee. This exposes shareholders to higher governance risks.
- The stock trades on the OTCQB and is thinly traded, making it illiquid and potentially volatile. Large transactions could move the share price substantially.
- In 2023, activist investor BT Brands, Inc. and CEO Gary Copperud led an unsuccessful proxy contest. They, along with their group, own 1.8 million shares. Any renewed activist campaign could result in additional costs, board disruption, or strategic changes.
- Dividend Restrictions: The company’s loan agreements prohibit dividend payments, and none have been paid historically. This may affect investor returns, especially for income-focused shareholders.
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Legal and Regulatory Risks:
- The company is not currently involved in any material litigation but is subject to the risks of future proceedings.
- Indiana law contains provisions that could make it difficult for a third party to acquire control, potentially reducing takeover premiums for shareholders.
- Cybersecurity: Noble Roman’s is dependent on computer systems for sales, royalty collection, and ACH transactions with franchisees. While the company discloses risk management processes, any significant cyber incident could disrupt operations, damage reputation, and incur costs.
- Franchise Performance and Market Demand: The company’s success is tied to franchisee performance, market demand for its brands, and economic conditions. Non-renewal of franchise agreements or shifts in demand could materially impact results.
- Human Capital: The company is highly dependent on key executives—Paul W. Mobley (Executive Chairman & CFO) and A. Scott Mobley (President & CEO). The loss of either could materially adversely affect operations.
Other Notable Information
- No Dividend History: Noble Roman’s has never declared or paid dividends, and its loan agreements prohibit them.
- No Unregistered Sales or Repurchases: During the reporting period, there were no sales of unregistered securities or repurchases of equity securities.
- Access to Reports: The company makes its SEC filings available on its investor relations website, but the website information is not incorporated into the 10-K.
- No Material Legal Proceedings: As of the report date, the company is not involved in any legal proceedings considered material.
- No Mine Safety Disclosures: Not applicable to the company.
Potential Share Price Drivers
- The upcoming maturity of the Senior Note in June 2026 and the company’s ability (or inability) to refinance or pay down the debt could have a material impact on the share price.
- Changes in interest rates (SOFR) will directly impact interest expense and thus profitability.
- Any renewed activism by BT Brands, Inc. or similar investors could drive volatility.
- Deterioration in liquidity or failure to improve the current ratio could lead to concerns about financial viability.
- Any material cybersecurity incident, legal proceeding, or regulatory change could impact operations and market perception.
- Thin trading and lack of exchange listing make the share price susceptible to large swings on relatively small volumes.
Disclaimer
The information provided in this article is a summary interpretation of Noble Roman’s, Inc.’s 2025 Annual Report and is intended for informational purposes only. It does not constitute investment advice. Investors are encouraged to review the full SEC filings and consult with their financial advisors before making investment decisions. The company’s operations involve significant risks, including those related to liquidity, debt, governance, and market demand, which may result in volatility or loss of investment.
